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| This is a weekly column transcribed from my Radio Show. The "Top Story" is the major discussion each week in which I address in great depth and detail, aspects of selling that are pertinent to your job everyday. |
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If you're in sales you might be wondering how do you measure what you're supposed to be keeping track of in sales. How do I organize myself? How do I know what to keep track of? How do I know where I'm supposed to put everything? These are questions that a lot of people ask me.
I've looked at a lot of books. There are a lot of great books on what most people call time management. How to Get Control of your Time and Your Life by Alan Lakein is probably the classic book on how to be organized. Even Peter Drucker, the great management expert, one of his early books was all about time management. It was called The Effective Executive. Then there's Charles Hobbs, the guy who invented the Day-Timer. His book is called Time Power. There's another great guy, Alec MacKenzie, who wrote a book called Managing Your Goals . I've spent a lot of time studying this, and what I've noticed is something I've noticed about sales as well, and that is that a lot of people make the subject very complicated. What I try to do is simplify it, just like I've done for the sales process. That's why I wrote the book The Six Steps to Excellence in Selling, trying to take something that seems complicated and non-linear, and put it into a step-by-step process that helps people to get from where they are today to where they want to be tomorrow.
My ideas on sales metrics follow a similar vein. So let's look at my ideas. The first thing is we have to remember that activity leads to productivity. That's one of the very important themes. Activity leads to productivity. As far as what we measure as salespeople, too many times we focus on the productivity side without understanding the accompanying statistics or activities that we have to track.
For example, I've got many of my clients, including myself - I am my own client. (I don't really pay myself though.) I have a lot of my clients working towards breaking out of some the patterns that have developed. Starting in 1998 we were in a go-go economy. Actually we were in an expansion from 1991 onwards. By the time we got to 1998 it was dizzying how much business was growing. Basically if you could breathe you could be successful. That's only partly tongue in cheek.
By the end of 1999 into the early part if 2000 the economy was already showing signs of slowing down. A lot of my clients were lazy. They had forgotten how to go out and build business. As the economy turned south, and especially with what happened to our country on September 11, a lot of people are finding that business is not coming in the door. People are sitting on their pocket books, even though as I say that the consumer numbers that came out for the month of October showed a 7.1 increase in spending, which is the highest monthly increase ever on record. So I think Americans are buying again. (I'm rambling today. Why is that? Maybe because I'm so happy.)
What you end up having to do is get back to the fundamentals, which I call tracking activities. What I have my clients to, and what I've been doing myself is take out a 4x6 card and write across the top the words day or date, dial or dials, contacts, appointments, and outcomes. Then all I do is keep track of the statistics that I make happen, the metrics, during the day.
So let's take today for example, November 14. I write 11/14 on the top left-hand corner of my 4x6 card. Under dials I would simply make little hash marks every time I completed a dial. One, two, three, four, cross the five. Then every time I make contact I put a little hash mark in the contact column. Today it was completely unusual to make ten dials and get ten contacts. I should save that card because it's never happened to me before, and it'll probably never happen to me again. Dials is an activity that you can track. Contacts is an activity that you can track.
The next thing I track when I'm looking to make outbound appointments is just that: appointments. Now this only works if you're making phone-to-phone contacts or face-to-face contacts in a geographic area. I always like to find out when I'm building business how many new people I'm getting in front of and that's why I tract appointments.
The last column, outcomes, is a subjective measurement of how the day is going. You might write in there, "Found two great opportunities. Generated X number of dollars in sales or revenue. Asked for and received a referral. This is a terrible list. I'm not getting through to anybody." You can give yourself subjective comments on the final, right-hand column of the card.
What I'm showing you is that sales can be reduced to its elements simply by looking at the statistics. In fact, I'll give you one of the sales metrics that is very common in the sales business. If you make 100 outbound approaches or dials to an unqualified list, to people who are not already customers - it's not a hugely qualified list where someone has already called up and asked who the decision maker is, how much do you buy of my product, who is your incumbent supplier, how long have you been working with them, what do you look for in a new vendor - I'm just talking about suspects that may have a predisposed inclination to buy from you and that's all you know. If you call on hundred of those people, you're going to find ten of that list who might show some passive interest in what you have to offer. If you talk to those ten people that have some passive in what you offer, you're going to find three people who are seriously enough interested that they'll talk further, or they'll agree to meet with you face-to-face. And of those three, if you're average, you're going to get one of those companies to buy from you. So what's the metric? 100-10-3-1. One hundred outreaches to warmed-up but not hot prospects lead to ten serious opportunities lead to three further discussions lead to one order or one relationship.
I've given you a formula now, so you can find out if you're going to be above or below the average. If you're making ten dials and only getting through to two people, then you have to work on using your telephone either to talk to receptionists or assistants or to get with people's calendars or not be offended or intimidated by voice mail. If you're making ten approaches and getting through to six people, but you have no appointments and no positive outcomes, then I'm wondering what you're saying. You're not getting anybody's attention. So you can use this as a diagnostic tool as well as a sales tool.
The main thing to remember in sales, in outbound prospecting, in building a business is to measure consistently and measure persistently what you're doing. I would usually do it on a two-week basis. Monday through Friday times two weeks, ten different days. Make calls; keep track of the results. And over time that would give you a really good average as to what your business is like. If you wanted to increase sales, you would know exactly how many more dials to make based on your own understanding of your sales metrics.
One other point about this is keep score and make it fun. I always challenge myself to see if I can increase my ratios of dials to contacts or contacts to appointments or appointments to outcomes. There's something about putting those little hash marks on a piece of paper. I know we could all organize this on a PC and we could have really nice reports and forms. In fact, most of the software programs out there will do that. But there's still something to be said for taking out a pen and committing some type of ink to the paper. As the Chinese say, the palest ink is better than the best memory.
The second thing I want to talk about as far as sales metrics and how to keep organized is to understand what it is you're keeping track of and how to go about organizing it. There have been books and books written about this topic. I'm going to make it really, really simple. All you need to manage is two types of information. We all need to manage what information and when information.
For example, what information is alphabetical. It's A-Z. It's setting up file folders or recipe card books or boxes or notebooks with twenty-six tabs, A-Z. And within your alphabetical file, within you're A-Z file, within your what file, you keep track of clients, prospects, company information, competitors, product information, etc. So if you're selling toasters and you're on the phone with someone and they say, "What does the Sunbeam toaster look like, or what are the features of the Sunbeam toaster?" you can either go to "S" if you track things by company or "T" if you track things by product. The point is all the information that you manage has to be organized in an alphabetical file. If I'm calling Health South Corporation and I have no idea where to gather the information on Health South, shame on me. Well, you all know it's behind the tab known as "H".
In my office I've got hanging file folders with tabs A-Z, and then I have regular 8 1/2 x 11 manila folders that are around a box of four for a hundred of them [?]. And every time I open a new file on a potential prospect or a customer, I write their name on the top of the file folder and keep all my notes inside. That's called managing what.
The second aspect is called managing when. When is a chronological way to look at the information. It's January to December. It's eight in the morning till five in the afternoon. It's February 3rd; it's April 8th. It's keeping track of all those ticks of the clock and what you're supposed to be doing on any given tick. This is where we keep track of appointments, we keep track of phone calls, we keep track of meetings, and we keep track of all those to-do's, all those action items on our task lists.
Now, the interesting thing about managing what and when is that you have to remember that there has to be a double-entry bookkeeping type of system in your what and when systems. For example, let's say I want to schedule an appointment with myself to call Health South Corporation. If I just wrote that in the file known as Health South and then folded the file folder up and put it away behind "H", what's wrong with that picture? What's wrong with that picture is that unless I go through every one of my file folders every day looking for chronological updates I'm not going to know when I'm supposed to call Health South and whether or not I'm going to miss that appointment with myself to make that call.
That means that every time you take out a what folder, whether it's a company or a prospect, you don't put the file away until you've made a corresponding entry in your when file, that is to say in your Day-Timer, your Franklin Planner, your computer program, your Microsoft calendar, etc. And where a lot of people fail is they keep what information in their when files, or when information in their what files. There has to be a corresponding entry on both sides of the equation.
I'll give you three last ideas on how to stay organized and how to measure yourself, and how to track and what to track. One is a saying that I've used to the point where I probably use it too much. It's called scheduled activities drive out unscheduled activities. If you want to make more sales you know you need to make more calls. But what happens to most of us is we get hung up on all these other things like paperwork, proposals, returning phone calls, taking care of problems, you name it. And then at the end of the day we realize we've contacted no new people.
In order to force ourselves to do the right activities, I have to tell you that scheduled activities drive out unscheduled is the most powerful thing you can do. This means that when you wake up in the morning if you want to start making calls at eight o'clock, make an appointment with yourself. Pencil it into your when file, into your calendar, that from eight to ten you're going to make outbound calls. That's the first idea.
The second idea is similar. It's called time blocking. If you block out time, it's like we say, the palest ink is better than the best memory. So if you block out time to do things, if you have projects you have to do, block out the time. Make an appointment with yourself.
Then the final thing is always have at your disposal a prioritized action list, not just a list written on a legal pad, but a prioritized action list that you've taken the time to think about before you get to wherever it is - your job, your car, your appointment. Then when you get a break, when someone's late, when you're done with a phone call, or when you're back from lunch, you don't have whiplash looking up and down the list looking for something to do. You go to the highest unchecked priority, and that's what you work on.
OK, I've given you a lot of information about sales metrics, about how to organize yourself, how to keep track, what to keep track of, and how to do it. I could spend an entire day talking about these things, but what I've shared with you today are the fundamentals of how to be successful in this endeavor.
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– Warren
Wechsler |
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