Do you know what your individual sales conversion data is and what it means? Most salespeople don’t, and it is a shame. Understanding conversion data and how to shape your sales funnel will help you identify training needs, and set realistic goals with a solid plan for achievement. This knowledge could if used correctly give you a HUGE boost in income. In this article, I will explain how to use your conversion data to share your sales funnel and ensure you continue to grow your income year after year.
What sales conversion data will help you do is go from saying I am trying to close X deals this month and taking a WAG (Wild Ass Guess) to explain how; to using the best information available to estimate a SWAG (Scientific Wild Ass Guess). It’s not a perfect system but it is far better than just tossing out a number and saying “I’ll close 20 deals this quarter” and having no idea how! Before I raise anyone’s hackles this is not a simple increase A input to get B outcome, but that may be part of what’s required! Here is how it works.
First, you need to break down your sales process into logical steps. That should look something like this: Lead – Attempts to Contact (ATC) – Contacts – Scheduled – Appointment – Applications – Closed Deals. Your individual process may have more or fewer steps, what is important is that you understand your process and are able to measure what goes in the front and what comes out the other end.
Next, you should record your sales data for each stage for several weeks. In the previous model that data would probably look something like this:
So from this sales conversion data model, I can immediately extrapolate that for this sales rep 125-166 leads will on average net me 3-4 deals under contract. I can use this to help each individual rep forecast, or I can put my entire sales teams data into the same chart to get team averages and track performance to the mean. What else could we do with it? For me, it is a powerful coaching tool. The next step is to divide each step into the next and see what percentage moves forward in the process. That data for week one looks like this:
Lead to Contact: 14.67% Contact to Scheduled: 63.64% Scheduled to Appointment: 42.86% Appointment to Application: 66.67% Proposal to Closed Deal: 75%
I have purposely left Dials to contact out of my model because I think on many levels it is a fake number. I have seen reps pound out 1000 dials a week and get nothing and others do 150 and sell 50% more than anyone else on the team. It’s a sign of effort… possibly, but it is easy to call a number you know doesn’t work over and over or one ring hang up and make it “look good” without really accomplishing anything. I only say this because I have seen it.
Now is the fun part. I built my conversion model to auto calculate so as you can start to manipulate these numbers in front of the sales rep and show them how little changes in the sales funnel can have a tremendous impact so I might say hey Joe, let’s look at a month instead of a week and put 600 leads in here. See the number of closed deals? watch what happens if we can increase your contact to scheduled appointments 5%? That’s pretty impressive, right? So, let’s talk about some strategies we can employ to get there. Would you like to listen to a couple calls with me and see what we can do?
These conversation rates show reps how they can achieve gains by training to improve your conversion in some specific areas. I will also create separate charts where I track conversion of referral leads only to demonstrate their value and as a forecasting tool where I will put in my predicted leads for each rep and my team and use historical averages to get to a realistic number.
I want to caution you against just telling everyone look if you just do this you will get this… You have to take a strategic approach to manage your sales conversion data and make sure you understand your team’s sales funnel and how each stage of the funnel affects the next. Some people will set a million appointments with a very low close rate, others will set very few and close them all. neither is “wrong” the goal is to manage the end result and get it trending where you want it based on the strengths of each rep. The primary function of this tool is to find training opportunities, and set manageable realistic goals with a solid plan for achievement.
Please feel free to contact me with an e-mail or comment and I will be happy to aid you in building your model and coaching you on its implementation.