Hi, and thank you for checking in on my posts!

In my article series Next Level Intentionality – 5 Ways You’re Missing the Opportunity to Close – I outline five areas salespeople should avoid:

We covered #1 in my last post HERE if you missed it.

1. Plan to Win the Year
2. Don’t Spray and Pray
3. Follow Up…Now (no, seriously)
4. A Win is Just the Beginning

In this post, we are going to get into the math behind how to move from hope to a data driven sales plan which, if followed, will greatly improve your chances of success.

#2 – Plan to win the year one day at a time!

You don’t go on vacation without a plan.  Where do I want to go, what should I do while there, who do I want to bring with me, what clothes should I bring, and so on.  With sales, you must do the same by first understanding where you want to go through examining where you’ve been.  

Data you should always keep current and at your fingertips includes your quota, revenue won this year, the average contract size in your division/company, the average win rate for your team (if you don’t know your own close rate), how many deals need to be won to hit your number, how big should your sales pipeline be for the best chance to win, how many average prospects are needed to win, and what is the average number of sales activities needed to win?   Questions like this help set the foundation as you develop your book of business.

Once complete (which shouldn’t take more than an hour if you have access to the right data) you are ready to begin to get into the weeds.  An example of how to evaluate this data is below:

How many deals do I have to sell to win? If your annual sales quota is $1.1MM, and the average contract size is $75K, then you will need to sell about 15 deals in the year to hit your number.  That is only about four deals a quarter or 1.25 a month.  Breaking these numbers down to smaller sizes helps measure and plan near-term success, while also making the impossible a little more digestible.

How do I know if I have enough in my pipeline? The important metric Win Rate is the percentage of opportunities you win vs the total number of opportunities closed in the same period.  The national average win rate is 47%.  This means if you pitch 10 deals, you can expect to win 4.7 of them.  So, if your annual quota is $1.1MM, you should have a minimum of $2.34MM in your pipeline at any given time if your close rate is at the national average. This translates to about 31 active opportunities per year.

It is best practice to strive for at least 3-4X your quota in your ongoing sales pipeline to ensure success. This may seem extreme, but most sales commission plans include incentives to overachieve.  A 3-4X to quota pipeline will help you crush your numbers on your way to Rain-Maker status.

Who’s Who in the Zoo?  There is a difference between contacts and prospects.  Contacts are random people in your CRM platform who may or may not be associated with a specific account.  Converting them to prospects is another key to success.  A prospect is anyone who is directly or indirectly involved in the decision making or buying process for what you are selling.  There is rarely one prospect per opportunity, and the number often correlates to the price, complexity, and strategic importance of what you are selling.  

You should know how many prospects have historically been involved with deals at your organization.  This will help you better understand if you are serving the right team for each opportunity in your pipeline.  In my opinion, an opportunity is not “real” if it lacks at least one prospect who is receiving quality engagement from the seller.  We will talk about the quality of engagement later in this series.

If the historical average number of prospects per won opportunity is 3, and you know you need at least 31 active opportunities at any given time to succeed (see above), then you need to be actively engaging with about 94 prospects at a time.  This may sound like a lot, but know that sales activity includes emails, conference calls, one-on-one calls, in-person meetings, group presentations, and more.  Many, if not all, these prospects will be included in the same activity which makes the number a bit easier to swallow.

Remember my issue with hope as a sales strategy?  We can’t sit around and hope all the right people will get the information they need to award you the business.  You must ensure this happens with the right amount, quality, and frequency of sales activities!  Don’t rely on your BDRs, marketing, sales engineers, or your boss to win your deals for you.  

To finalize your data driven sales plan, look at the average number of sales activities per won deal over the same period used for the previous analyses.  If the average win included 10 sales activities, and there are 3 prospects per opportunity, you need to plan for 30 total activities per opportunity.  Therefore, your 30 total active opportunities should generate over 900 sales activities to help you sleep better at night knowing you are getting the job done right.  This equates to about 12 activities a day which might make the pillow a bit softer.

Your success will depend on having the discipline to follow these numbers every day.  If you fall short one day due to travel, you will have to make it up on the next.  Yet rest assured that if you are providing the right people with the right information, you will get the win more often.

Thank you for your interest in this series and I truly hope (there’s that word again) you find it useful.  My next post, Don’t Spray and Pray, dives deeper into the quality of sales activities needed to win.  Don’t miss it!