Every REAL salesperson knows the sun rises and sets on one thing: hitting quota. Every month, you have a number hanging over your head that you have to meet. For the majority of my adult life, I’ve worked for a commission, and I think it’s served me very, very well because I’m not afraid of work – it’s always been my key advantage, my “ace in the hole,” so to speak. I also have a great fondness for selling because it was the one job where I controlled my income, not my age, status, background or education (or lack thereof). My raise became effective the minute I did.
Of course, ALL business owners should wake up with a number hanging over their head too – a quota they set for themselves to hit for their business. I’ve been at this for so long that I’m no longer surprised many don’t, but it still leaves me shaking my head when I talk to a self-proclaimed entrepreneur who is clueless about where they stand and how their business is performing year-to-date or over the last few years, who don’t know key metrics such as number of clients, close rate, cost per lead, etc., AND who has no quota for growth, sales, profit targets, etc.
You CAN’T hit a target you don’t see, much less one you don’t know about. Nobody “stumbles” upon success, and nothing truly good in business happens by accident. You have to consciously CHOOSE the direction you want to go, make a decision to put your full effort behind obtaining it, then wake up every day to align your activities, life, business decisions to the attainment of that overriding goal.
So, what I wanted to write about this month is what “aligning your activities” means toward the obtainment of a sales goal. Many don’t know what that entails. So, whether you are a salesperson reading this, or a business owner, it applies.
1. Get crystal clear on your goal.
“Generate more MRR” or “Get my close rate up” are NOT good goals because they aren’t specific. It’s critical that you get very specific and clear on what you’re trying to achieve. In sales, it’s usually based on money collected, but if not, be clear on what the measurement of success is. If you’re managing salespeople, YOU need to communicate to them exactly what “success” means, and it has to be measurable, not subjective. For example, don’t tell a rep, “You need to close $10,000 a month in new MRR,” but then not clarify whether that is in FIRST-MONTH contracts or the lifetime of a contract. Is that with NEW clients or existing? The best way to do this is to give an example: “Close and collect at least $10,000 per month in MRR every month with new clients to obtain a quarterly goal of $30,000 in MRR collected.” That $30,000 may represent over $1 million in revenue in total contract value, so another way you could present this goal is: “Sign at least $1 million in total contract value in Q2 of this year.” What’s MOST important is clarity – what exactly do they need to do to succeed?
2. Do backwards planning to make sure your activities are sufficient to hit your goal.
Going with the above example, if the average client contract is $2,000 per month, that means you need five clients to hit a goal of $10,000 collected in one month (first month’s contract payment). If your close rate is 50% of the INITIAL opportunities (first-time appointments), that means you need to have 10 NEW opportunities OPENED EVERY MONTH. If 10% of the people you prospect turn into an opportunity, you need to prospect at LEAST 100 people EVERY MONTH, or 25 per week.
The above is purely an example, and each rep needs to do their own “backwards planning” to know what they need to do to hit quota. If the above was true, a salesperson that only prospects 50 people in a month won’t hit quota UNLESS they start closing at a higher percentage or get more than a 10% opportunity rate by being smarter about who they target, working referrals or improving their prospecting strategy, etc.
If you’re a sales manager, this is the type of planning you need to do with your reps – and then watch their activities to know if they are on track or off track. Occasionally, they might be ahead of their quota, and you’ll need to push them to keep their prospecting activity UP or they’ll slide into a comfort zone that slides them backwards. If they are behind, you’ll need to work on their skills AND increase their activity to ensure they actually hit goal.
3. Stick to your plan and keep your activity UP.
The single biggest reason salespeople fail is they don’t prospect enough. Sometimes this is combined with poor sales skills, which makes everything harder and more difficult – but as Zig always said, you need to make up in activity what you lack in skills.
Another BIG reason for failure tied to this: wasting too much time on “meandering” through the day, in and out of distractions and attention to trivia. We’ve found that the average rep in our office can comfortably make 25 dials in an hour IF they are not pausing to take a break, check e-mail, etc. Therefore, if they make five block hours of power dialing, they can hit 100 to 125 dials a day, possibly more. That still gives them three hours to check e-mail, be in meetings, put together Shock-And-Awe boxes, watch training and do other necessities of their job…yet we’ll see reps who make 20 dials in a day and say they are productive; how is that possible? That usually represents LESS than an hour of work. What the hell else are they doing during the other SEVEN HOURS?
I’ll leave you with one final thought: if you are NOT hitting your quota, you’re not doing enough, period. People get frustrated and will blame everything but their own activity for failure. The leads aren’t good…“everyone” is in lockdown…“nobody” is answering the phone…it’s the holidays. There’s ALWAYS some reason why they can’t. But the reality is, if you are not getting results, you’re not doing enough. Can’t lose weight? You’re not doing enough in the diet or the exercise part. Not making progress on your financial goals? You’re not doing enough to make more money or cut your costs and invest more. Not hitting your quota? You’re not doing enough. Sorry, Charlie, that’s it. And please don’t tell me you’ve “tried everything,” because you haven’t. Did you work past 5:00 p.m. every night? Come in early every day? Take fewer breaks? Eliminate all distractions by shutting off your cell phone and social media? Did you work on your attitude and skills? Then you haven’t tried everything.
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