It’s All About the Ratios

Dave Brock is one smart guy. You should follow him and read his articles. His book, “Sales Manager Survival Guide”, is the best I have read on that subject matter. I’m a fairly voracious reader but I can’t read books. I read every word of his. His discussion of ratios is of particular interest to me.

Recently Dave published a couple of articles on prospecting where he shared that, when sales are low, the answer that most sales managers have is … “We need to fill the pipelines! We need to prospect more!”

Really? Really?! I’m shocked since I have focused on my ratios since I was a B2B sales newbie back in 1977. Even then I knew that if …

I made thirty cold calls, I would get five demos.
If I did five demos, I’d sell at least one calculator.
If I sold twenty calculators, my sales for the month would be at least $10,000.

Now, try knocking on 30 doors a day in the middle of the summer in a three-piece wool suit and tie. We didn’t do telemarketing in those days. There was no internet or email. No social media. Not smartphones or texting. It was damn near impossible to make more than 30 calls per day.

Ratios and skills, and both are intertwined, were the only way to win. If I could increase my calls to demos ratios, my sales would rise dramatically. If I could increase my demo to close ratios, same result. If I could do both, watch out.

These all come with increased selling skills. Now let’s take those a few steps further. What if, instead of one calculator, I could sell them two? Why not ten? A larger company, how about an annual contract? Let’s add on an extended maintenance agreement.

Why are they using an old pegboard accounting system when I could sell them a $10,000 posting machine? Can I get a referral? All of these actions are tied to ratios. I am increasing my efficiency with every sales call. I’m not making more calls. I’m making better calls. This seems to be pretty obvious to me.

Maybe increasing the pipeline is the answer. But, before you come to that conclusion, you need to find out why it is too low. If the sales rep is not making the calls, that’s an activity issue. If they are making the calls and their pipeline is skinny, that would be a training issue. Their ratios are too low. They lack the skills to increase those.

There is something wonderful about understanding and increasing your sales ratios. You know what you need to do to generate X dollars in sales. X dollars in sales will equal Y dollars in income. Your income remains steady vs. the roller coaster paychecks that most salespeople experience.

Do you want to make more? You know what you need to do in terms of your activities. Getter better at what you do and increase those ratios!

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Craig M. Jamieson

Managing Member at Adaptive Business Services

Craig M. Jamieson is a lifelong B2B salesperson, manager, owner, and a networking enthusiast. Adaptive Business Services provides solutions related to the sales professional. We are a Nimble CRM Solution Partner. Craig also conducts training and workshops primarily in social selling and communication skills. Craig is also the author of "The Small Business' Guide to Social CRM", now available on Amazon!