Written by Sean McPheat |
11 February, 2008
Yes, success in professional selling does indeed rely on a little luck!
That luck however, stands for Labour Under Correct Knowledge!
Selling is a profession and as in any profession it takes skill, education, practice and expert knowledge. A true professional sales person does not rely on the roll of the dice or hope and wish he or she has a good week.
A true professional depends on the knowledge and understanding of facts; on scientific data and laws all applied with learned skill.
If you will learn the facts, the scientific data and the laws that govern your business, and practice and study to learn how to apply this science to your everyday activities; then you will make as money as you want, write your own paycheck and completely eliminate any risk.
In fact, you can work on a commission (even a 100% commission) and make it more dependable and consistent than if your worked on a set hourly wage!
S.O.S. = The Science of Selling
The Science of Selling, or SOS, is exactly what it sounds like.
It is about understanding the science; the numbers and the data about selling. What follows is a brief explanation of SOS and some tips on how to apply it to your particular sales situation.
However, for more detailed information on SOS you will find in other MTD training material.
The first step to develop an understanding of your SOS is to find out all of the numbers.
You need to assess all of the statistical data that surrounds your selling situation: your product, sales process, turn around time and your company or ndustry. You must find out your sales averages, all the averages: your closing average, the average sales amount, the average sales commissions
paid, the average length of time to close a sale, the average number of appointments to make one sale, the average number of calls to set one appointment, the average number of dials to make a call to set an appointment. You need data.
This information should not be too difficult to get as your sales management should have such readily available. If you have a history with the company you are now with, then you should be able to get most of this information from your own records.
If you are new to the company or to selling, then your company should have records and statistics of sales people with the firm in general. The key is that you MUST NOT invent, create or assume these numbers. You must base these figures on facts.
Selling is the most subjective business in the world and you cannot rely on what you think or feel. The amount of prospects you think you saw last week and what you feel is your closing average, will more likely be a lot different the amount of prospects you actually saw and your true closing average.
Once you have this real data then you can begin.
To best explain SOS and how you can apply it to your personal situation, let’s use a hypothetical sales person we will call Judith Rains.
Judith works for ABC Widgets and after looking over her history, she has gathered all of the information on her actual past performance.
Judith has found that her closing average is 20% or one out of five.
That is, when she counted all of the sales she closed versus all of the prospects she attempted to close, she closed 20% or one out of every five. It took her five sales presentations or demonstrations to make every one sale.
Now we know that there were times when Judith made three or four sales in a row and times when she lost a few sales in a row.
However, over a length of time, Judith knows that her average is 20%.
Judith also knows that when she makes a sale she earns a commission of £400 on the average. Once again, this is her average as sometimes she makes a big sale and earns £1,000 or more and sometimes she only earns £150, but her average is £400.
It therefore, takes Judith FIVE presentations or closing attempts to make one sale, in which she earns £400.
Now, here is an important question: If Judith makes one sale for every five closing attempts, and she makes £400 for that one sale, then how much does Judith make for every presentation, every attempt to close?
That is how much does Judith makes for every closing attempt even when the prospect did NOT buy?
Judith effectively EARNS ONE FIFTH of the £400 on every closing attempt whether she makes the sale or not. Every time Judith asks for an order, she earns 1/5 or 20% of the total £400 or £80.
So, Judith makes £80 every time he closes for the sale, no matter what the outcome!
Don’t’ Fight The Law!
The Law of Averages is no different than the Law of Gravity—they are LAWS and they will be true! What you need to do is find out all of your numbers; your closing average and the average sale amount and figure out how much you earn per closing attempt.
It is imperative to understand that this is actually how you are paid.
You must understand that every action, every sales activity has its own value.
You must understand that you get paid when you perform each one of these sales activities no matter what the outcome of each individual sale.
Judith must understand that at that critical juncture of closing the sale, £400 is not at stake, not at risk. When she is attempting to close the sale, NOTHING is at risk. If the prospect says, “No” Judith STILL makes £80!
If the prospect throws Judith out the door, Judith still made £80.
Equally as important, Judith must realize that if the prospect says, “Yes,” and buys the product, she still made £80 and NOT £400.
Usually, sales people go only as far as to get some vague idea of their overall closing average and they stop there. They then use this closing average to set their goals and base their work.
The problem with this is that the closing average is the end result of an entire sales process. However, to achieve consistent outcomes, you must have consistent input.
Your work ethic: the number of sales calls, the number or closes, the number of appointments, all sales activities must all be equally consistent.
When sales people go up and down and rich one week and broke the next, it is not due to bad luck, it is the result of an inconsistent work ethic.
Typically sales people set their goals based solely on the number of sales as per their closing average. Therefore the sales person usually pays no
attention to the work ethic behind each sale.
As an example, a sales person with a closing average of 20% sets a goal to make five sales. He goes out and during the week he achieves his goal of the five sales and he did it by only making 12 presentations.
The sales person closed 5 sales out of 12 closing attempts.
When this happens the sales person jumps up and down feeling grateful for having such a good week.
However, the truth is that this sales person’s averages say that he must make five closing presentations for every one sale earned.
Therefore, if he wants to make five sales, he should make at least 25 closing attempts. You see, 5 out of 12 is a 41.66% closing average and though it may feel good, his closing average can not support that.
In fact, since this salesman should have done 25 and only did 12, he is in-the-hole 13 closing attempts. He is behind on the law of averages by 13 closing attempts. Now, what do you think will happen to this sales person over the following week or two?
Those 13 closes are going to catch up with him to bring his closing average back to 20%.
That means he must go through a period of no sales and when that happens the sales person believes he is in a slump or he is just
having bad luck. But it is not a slump and it has nothing to do with luck.
It is the result of his own action (rather inaction) and is exactly why the under-trained sales person lives on a mediocre rollercoaster ride of fluctuating income.
It’s Science, Not Sorcery
Rise up above the level of the wishful thinker and learn your SOS.
Figure out what you earn for every sales activity in your sales process.
Then use those numbers as goals. With our sales person Judith for example, we know that she earns £400 for every sale she makes.
When she sets a goal to make £2,000 does she set out to just make five sales? (£400 x 5 = £2,000) NO. No.
If Judith is a true professional who understand SOS, she knows that she actually earns £80 for every closing attempt regardless of the outcome. Judith forgets about the number of sales and sets out to make 25 closing presentations (£2,000 / £80 = 25).
She makes sure she completes 25 closing attempts regardless of what happens. Judith realizes that she will make her goal of £2,000 as long as she
completes the 25 attempts. Judith knows that if she completes those 25 attempts every week, week in and week out, that she will consistently earn close to £2,000 earn
She does not worry about who says yes or who says no.
She does not worry about the small sales or the big sale.
She does not have anything to worry about or to wish for and she does not depend on luck. Judith understands that she has nothing to lose and nothing to risk. Judith is a sales scientist!
Until the next time, take care of yourself and happy