More on Ratios – A Real Life Example

Early last year I was working with one of our largest and best clients, a Fortune 100 international. At the lunch break served buffet style in the meeting room the Senior VP strolled in to chat. After a few minutes he went to the white board and wrote down- 3 PER WEEK. I noticed that as he did this he looked directly at a group of three representatives. Their demeanor changed instantly. They became very quiet and didn’t want to make eye contact with him. I quickly asked him about what he had written. He told me that the division he was referring to was behind quota and to catch up. They needed to open 3 new accounts every week for the rest of the year. I asked the reps if this was possible. Before they could answer he said it had to be.

I turned directly to the reps and asked them what it would take to open 3 new accounts per week. They gave me a lot of vague answers like a lot of late nights, many days on the road, one even said luck-lots of luck! I replied that I was thinking of something more specific. How many approaches do you have to make to talk to one decision maker? How many decision makers do you have to talk to get one appointment? How many first appointments turn into second and third appointments? And finally how many sales will you ultimately get? They didn’t have a clue!

I turned back to the VP and asked him where he got 3 per week from. He said that this is the correct number to hit the target. I pointed out that since his reps didn’t know what it took to get a sale likely his managers didn’t know either. He immediately asked the closest manager if that was true and got a “well”. (Some of you will know from previous articles that “well” is usually followed by a lot of run around!). I then asked him if it was possible that the real number of new accounts they could open per week might be 4. Or 6. Or 2. Or 9. He started to get my point. I explained that if the number came from the bottom up and was based on previous results two things would happen. First it could be counted on and repeated. Second it could be improved on. Also if everyone knew what it took to get the sale additional resources could be allocated to get more sales. The final benefit is that the people tasked with doing the work and rewarded (or not) for the results would have ownership of the process and there would be a much greater chance for success.
They agreed as a group that they would start to track these “new” numbers and see if it would help. When last I talked to them they were still slightly behind quota gut were making up ground fast.

I can’t stress enough the value of knowing what it takes to actually make a sale. Start with the most basic data. It will make a big difference down the road.


More on Ratios – A Real Life Example - To learn more about this author, visit Don Mersereau's Website.

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