Written by Sean McPheat |
3 February, 2012
We hear this terminology all the time in the world of professional selling. However, just what is a sales slump anyway?
Most sales people refer to a sales slump as that time when sales slow down, and business slips into a quagmire. The main thing is that most sales people relate a sales slump and its cause to unfortunate circumstances, usually beyond the sales person’s control. It’s not their fault. I mean, no one gets into a slump deliberately, right?
To that common definition of a sales slump, I say…
THERE IS NO SUCH THING AS A SALES SLUMP.
Are there times when your sales may drop off? Yes. However, it is not due to unfortunate or even unforeseen circumstances.
#1 – You Reap What You Sow
The primary reason you see sales fall off in what sales people commonly call a slump, is due to an inconsistency in work ethic and a lack of understanding the science of selling.
As an example, a sales person sets a goal to earn £1,000 in commissions for the week. He has a 20% closing average. However, since he earns an average of £200 per sale; he sets a goal to close 5 sales, and here is a sample of what happens that coming week:
Monday – Sales person does three presentations and closes two. Earns a total £500
Tuesday – With referrals from Monday, he does two presentations and closes both! Earns £350
Wednesday – He does four presentations and closes two of those! Makes £450
Thursday – He does two closes and sells none, but having already reached his goal, he takes off early and hits the local pub.
Friday – He runs another strong referral: one presentation, one sale. £250. He then takes the rest of the day off for a well-deserved early weekend.
Our sales hero closed 7 sales instead of 5 and earned £1,550 instead of £1,000. He is ecstatic and feels he has a great month and career ahead.
What’s the Problem?
The problem is that this sales person performed only 10 sales presentations and he closed 7 sales. The problem with that is that 7 out of 10 is a 70% closing average. His average is only 20% or 1 out of 5. With a 20% closing average, he should have done 25 presentations in order to make 5 sales. He should have done 25, but he only did 10. He owes the “street” 15 sales presentations. What do you think is going to happen next week?
I Fought The Law and The Law Won
The “law of averages,” is a LAW, it will come true. If you flip a coin 100 times, it may land on heads 15 times in a row, but when it is all over, it will come out very near to 50 heads and 50 tails. Our sales person’s 20% closing average is going to come back with a vengeance!
The Following Week…
Still riding on the high of last week, our hero sets a goal to make £1,500 again this week with 7 sales.
Monday – Does 4 presentations, sells one. £185
Tuesday – Does 3 presentations, no sale.
Wednesday – Works very hard and gets in 5 presentations and sells one. £200.
Thursday – Getting desperate, he gets out and does 5 more and sells one. £225.
Friday – He begins to feel that he is doing something wrong, different from the previous week. So he alters his sales presentation on the next 4 calls, and sells none!
This sales person now begins to say, “I’m in a sales slump!”
The fact is that he is exactly where he put himself. He is in the exact situation he created. This is not a slump. For this sales person to earn £1,000 per week, he needs to do 25 sales presentations every week, week in and week out, regardless of how many sales he closes. Instead, he is experiencing the results of the sales process for which he invested.
#2 – You Reap What You Sow – Again
Just as the lack of work ethic will come back to haunt you, so will a consistent input of positive sales activity. When you consistently do the proper number of sales closes, phone calls and other sales actions, you will still occasionally have a period of a few “no-sales” in a row. However, that too is part of the process and not a slump, as you can count on closing several sales in row to even up the law.
Be consistent with the number of sales calls, sales interactions and other foundational sales activities and erase the word slump from your vocabulary. Watch your averages and do not allow your work ethic to lag when you have a good selling week.
My associate John Landrine in the U.S. has a saying…
“If the street owes you, it will pay you back with bonuses and rewards. However, if you owe the street, it will collect with interest and penalties!”