Study and Know Your Selling Ratios

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**Note: This is the third part in a five-part series entitled, “The Five Principles of Sales Team Leadership.”

Previous articles in the series:

• The Five Principles of Sales Team Leadership.
• Know Your People.
• Spend Time with Your People in the Field.

Here at Salesteamtools.com we target our message at sales managers and professionals in high activity selling industries. Particularly in high activity selling, selling percentages and averages matter. You may not think they matter, but they do. We call them ratios.

Ratios tell you the objective story behind the emotional one you tell yourself, or you tell your sales manager. So, they’re the real story behind the story you get or the story you tell yourself.

If you track the right numbers, ratios tell you where you’re bogging down–or flat-out failing–in your sales process. As your sales calls and appointments increase, you make the ratios rules in and of themselves; they’re a constant reality check. If you never track them, you will forever be a slave to the simplistic guidance to “make more calls” or “work harder” or the increasingly trite, “work smarter.” The sales professional who tracks her numbers knows what specific skill-aspect of the process she needs to develop. The sales representative who doesn’t is subject to the quotes in this paragraph.

They key, then, is collecting the right data over time, benchmarking and publishing across your team and organization, and in conducting one-on-one coaching sessions with reps. Many companies require their sales representatives to report some of these numbers, most do not publicize the “best of…” numbers across their organizations. For the life of me, I can’t figure out why this is.

New Business Metrics & Ratios

In tracking your new business development, it’s important to track these telephone skill activity and skill ratios at a minimum:

1. Average cold calls (face-to-face).
2. Average phone cold calls.
3. Phone contact ratio (percent of cold calls resulting in live decision-maker contact).
4. Phone appointment ratio (percent of contacts that result in new appointments set).

Then, when it comes to face-to-face selling, it’s a good idea to track these:

1. Average first appointments completed weekly.
2. Average presentations weekly.
3. Average closes weekly.
4. Presentation ratio (percent of first appointments that result in presentations).
5. Closing ratio (percent of presentations that result in closes).
6. Average closing size (average revenue per close).

There are obviously many more you could track, but you’ve got to be careful about overanalyzing your numbers to the detriment of time spent in the field with reps and asking them questions to get more details.

Again, it’s the trendline and the objectivity you’re seeking. The ratios tell you volumes more than the stories you tell yourself by just looking at results or guessing about a sales professional’s weaknesses. Add the dimension of benchmarking across your team or organization, and you can see with no difficulty who your best performers are in the various skills involved in selling.

As you sit down and discuss performance and pipelines with your individual sales professionals, you can zero in on specific areas where things just aren’t going right. And referencing your benchmarks and standards as a company and you’ve got a self-contained training system. Meanwhile, if you’re an individual performer tracking your own ratios, you have the perfect self-management tool to help you get to the next level.

Register for our free downloads and you’ll gain immediate access to a very clean, professional reporting tool you can use for yourself or with your sales team.
Other Resources: Sales Activity Management, Inc., Mr. Cold Call tracking sheet, Stephan Schiffman’s High Efficiency Selling.