This Year, Watch the Numbers…Manage the Behavior
Many sales managers attempt to manage their salespeople by “managing” their numbers. They track the number of opportunities in the pipeline, the number of appointments booked, the number of proposals generated, the number of presentations scheduled, and the number of sales completed; then they hold the salespeople accountable for maintaining some predetermined levels.
You can track numbers, but you can’t actually “manage” them any more than you can manage the weather. And like the weather, all you can do is observe and analyze. But, it is from the observation and analysis (of the numbers, not the weather) that you can identify pathways for improved performance.
Here’s an example:
Jay sells life, health, and disability insurance to owners of automotive service centers and gasoline stations. He has a large geographic territory. His company’s recommended (numbers-driven) selling strategy is to get in front of as many owners as possible each day and give a sales pitch. Just drop in, ask for five minutes, give the pitch, and try to get them to sign on the dotted line.
Jay followed that strategy for quite some time and did surprisingly well, but at a price. He would often leave his house at 5:00 a.m. so he could catch a business owner opening his doors at 6:00 a.m. And, it was not unusual for him to still be making presentations at 8:00 p.m. He was driving hundreds of miles a day to drop in on unsuspecting prospects.
Jay’s sales figures were rather good. He was the top salesperson in the region for several years. But, he was working hard. He didn’t know how hard until he analyzed his numbers and the associated activities. He found that he spent most of his time:
- Driving to see people who didn’t have time to see him
- Presenting to people who had no interest in what he had to sell
The least amount of time was spent with real prospects.
Why? Because he was trying to manage numbers—three sales per week. So, he would see anybody and everybody until he closed three sales, even if that meant working on Saturday.
His analysis revealed that his closing ratio—completed sales vs. presentations given—was very low. After all, he would present to anyone who would grant him five minutes. By his own admission, many people let him make his presentation only so that they could get rid of him.
Additionally, his analysis revealed that his ratio of presentations to drop-ins was also very low. Jay would often drive for 30 or 40 minutes to call on someone who couldn’t see him.
Finally, his analysis revealed that he closed sales with about 25% of the people who had real concerns about their insurance coverage. Here’s how the numbers broke down:
- 50% of the prospects were not willing to either change carriers or make the necessary investment.
- Another 25% were ineligible for coverage for one reason or another.
- The remaining 25% would buy.
Jay reckoned that if he could identify and present to 12 people who had real concerns about their insurance coverage, he could close the necessary three sales—and do so in a lot less time and with a lot less effort.
So, he shifted his focus from trying to manage the numbers—three sales—to managing his behavior—identifying twelve people with concerns about their coverage. He traded travel time for telephone time to contact, qualify, and set appointments with prospects who had a genuine interest (even though that approach ran counter to his company’s established procedure).
Did his strategy pay off? Let’s look at his current “numbers”: working half as many hours, he is closing more than twice as many sales. What do you think?