There is a scene in Apollo 13 where Kevin Bacon and Tom Hanks are having a contentious conversation. Essentially, Kevin Bacon thinks that NASA isn’t sending them a proper reentry plan because NASA doesn’t know how to get them back and according to HIS calculations, they are going to skip off the atmosphere and never get home. Tom Hanks asks, “how do you know this”. Bacon yells, “because I can add!!”
Now if simple math can get three stranded astronauts back home, from a wounded trash can running on a commodore 64, you can certainly use math to be a better salesperson. I know it’s a stretch to compare the two, but I just love that story and the way he delivers that line.
People will tell you, there is no magic bullet when it comes to sales. I believe they are wrong and there absolutely is a magic bullet to sales and it has to do with a simple equation. Sales is nothing more than big data that you have to reverse engineer.
When I was first interviewed to sell insurance, the guy told me, that in order to be successful you have to be able to sell 30 policies a month. One a day.
It may take some time, but the first thing you have to do is establish your closing ratio. How many sales divided by how many quotes, or prospects or opportunities you have had to sell. I determine my closing ratio to how many policies I have sold divided by how many quotes I have done. When I first started, I was new at everything and was still learning my product and sales strategies so I assumed my closing ratio would probably be lower than industry average. I set it at 20% to give me a base.
If I wanted to write 30 polices, I needed to quote 150 policies. 30/.2 is the equation you are looking for. That looks like a lot of quotes! My company counts each car as one policy, and one house as another policy and the average household has 2.5 policies which means, I need to quote 60 households. If I close 20% of 60 households, I’ll write 18 households with 2.5 polices per household and get to my 30 policies.
Is 60 households per household per month a lot? NO! Break it down by week, and then by day. In 20 business days in a month you have to quote three a day. Can you quote three households in a day? EVERY DAY? Two in the morning and one in the afternoon. You have 8-10 entire hours every day to do this. It’s the EVERY DAY part that causes people to fail.
That’s it people. This equation is scalable. Do you want to write 100 policies in a month? OK, 100 (policy goal)/.2 (closing ratio)/2.5 (policies per household)= 200 households. 200 households divided by 20 days= 10 households a day. As you get better and your closing ratio rises, you have to quote less. Let’s stay with the 100 policy goal and a 25% closing ratio. 100/.25/2.5= 160 households or 8 per day. 4 in the morning, 4 in the afternoon. ONE QUOTE PER HOUR. Can you get one quote per hour??
There is your magic bullet for sales. So why do so many people fail at sales? They don’t fail at sales, they fail at marketing. They fail at getting their x number of quotes per day. Quotes are the engine that drive the entire machine and without quotes, there are no sales.
I have given you the answer to HOW to get to your number but that is just the start. Are you prepared to be rejected 80% of the time? Are you prepared to learn your product so you can answer any question asked about it? Are you learning the language and psychology of sales? Do you believe in your product? Do you have a plan on how to generate you x number of quotes per day, EVERY DAY?
Marketing is something I will write about in a future post. It is an entirely different skill set that requires a short term and a long term plan. In the meantime, do some simple math. It should be the base for your entire sales strategy and give you the direction you need to start moving towards success.