Written by Sean McPheat |
2 February, 2012
Most sales people have aspirations of being the best in their field. Most have a desire to excel beyond their peers and rise to the top of their industry. One of the most frequent questions I get is, “How do I become a top sales person?”
Well, let’s relate the selling profession to other professions. In many areas, one way to recognise someone who is a qualified expert in their field, who has an abundance of knowledge on a particular topic, is someone who holds a PhD in that field.
The abbreviation PhD stands for “Philosophiae Doctor,” which is Latin for Doctor of Philosophy. Of course, I would say that term could not be any more appropriate to describe a master sales expert! If you want to become the best, then get a PhD, a doctorate in sales!
On average, earning a PhD or Doctorate’s Degree requires 8 to 12 years of study or at least 4 years after earning a Master’s Degree. However, one of the most appealing aspects of the sales profession is that time is not the issue. In the sales business, it is all about merit. Like a car, it is the mileage, not the age that counts. In sales, it is not about time; it’s about productive activity.
How Many Prospects Have You Seen?
In sales, the true test of knowledge and experience eventually comes down to how many qualified prospects you have seen and how may closing attempts you have made. The challenge then is to figure out how many closing attempts you need to perform in your business to be able to compare your knowledge to the level of a PhD. Well, of course, there is no available science for this, but I believe below is a very sound idea on how to earn a PhD in sales.
How Many Closing Attempts Earns You a PhD?
Remember, the goal is to come up with a number of closing attempts, sales presentations, or interactions that demonstrate a doctorates level of knowledge and experience. In addition, the method must take into account the vast differences in products, services, commission structures and sales processes.
My idea is to figure out what is the top annual income in your sales profession, determine how many closing attempts (on average) it takes to earn that earn income, and then multiply that number by three.
In other words, find out how many closes it takes to earn the top annual income, and then close three times that amount. Why three times the yearly amount? I think it demands more consistency in work ethic, which is an integral part of achieving any successful sales career.
Use These Steps
You want to find out how many sales presentations it takes to earn the top annual income in your business. Multiply that number by three and you have the goal to earn your PhD. Here are the steps you can use to go about this.
#1 – Top Income
First, find the top earning sales person in your profession or industry. That does not mean just in your firm, but in your industry. Find a top-level sales person or consider what the highest level of sales achievement is in your company. In either case, get a number in terms of annual income that the big dogs make.
#2 – Average Sale and Commission
Now, find out what is the average sale in your business, and the average commission for that sale.
#3 – Divide the Average Commission into the Top Annual Income
Next, take the average commission earned on the average sale and divide that into the top annual income. This will give you the number of sales needed to earn the top income.
#4 – Times the Closing Average
Multiply the number of sales needed by the closing average to get the number of closing attempts needed to earn the top income for one year.
#5 – Times Three
Finally, multiply that number by three.
The resulting number is the amount of closing attempts you need to earn a PhD.
Let us assume that in your field the top sales people earn £100,000 a year. You then find that the average sale commission is £250. Therefore, on average, it will take 400 sales to earn the £100,000. (£100,000 / £250 = 400)
Of course, the top sales people may have a much higher average sale. However, use your personal current average or the company average, not that of the top sales person.
Now, with 400 sales, consider the closing average. Again, this is your average or the company closing average and not that of the top producers. The closing average we will assume is 20%, or one out of five. Therefore, we will say that it will take 2,000 closing attempts to close 400 sales. (400 x 5= 2,000)
Finally, take that 2,000 and multiply it by three and you get 6,000.
If the above numbers represented your business, and you put yourself in position to close, to ask for the order 6,000 times, you would have earned a PhD!
You see; prospecting skills, setting appointments, closing skills, knowing your business, understanding the competition, account management, referrals, everything must come into play for you to be able to perform the required number of sales interactions.
How Long Does it Take?
How long it will take to achieve a sales PhD in the above example, is completely up to the sales person. The goal is to do 6,000 sales interactions. That may take one sales person three years, doing an average of 2,000 per year. However, another, harder working sales person, may see 2,400 people per year and get it done in two and a half years. Yet still, a sales person with exceptional cold calling and appointment setting skills, may see 3,000 people per year and earn a PhD in just two years!
Alternatively, for a less organised sales person with a lackluster and inconsistent work ethic, it may take six years to get there. Figure out how many closes you need to get your doctorates.
Then earn your PhD in selling your product or service and you are sure to become a tenured member of the sales elite in your industry!