that average, divide the average commission per sale into the target income goal I would like to earn the first year.
It is usually unreasonable to expect brand new salesperson to sell as much the first month he starts with the company. Sales should build every month as his prospecting begins to produce results, and as he learns how to best demonstrate and sell the company’s product. To that end, you will need to spread the sales needed to achieve the annual goal on an escalating basis, with fewer sales expected in the earlier months, and more each month until the average or better is reached.
Determine how many presentations, on average, existing salespeople make in order to close one sale, and then try to determine an average for new salespeople, if possible. If the average is one sale out of four presentations, then simple math tells you that you must do one of two things in the first month. You must either make sixteen presentations to close four sales, or you must make somewhere between twelve to sixteen presentations and achieve a higher-than-average closing ratio. I’d pick sixteen presentations as the goal. Worst case scenario then is you sell more than expected—not a bad thing.
Ask yourself what a salesperson has to do on a daily, hourly basis to secure enough appointments to make sixteen presentations the first month. The quickest way for a new salesperson to get started is cold-calling? I made cold calls on businesses when I sold cash registers, chemicals, and security systems. To me, cold-calling was the fastest way to secure opportunities to present my product. No doubt it is harder work and requires that the salesperson have a thick skin to be able to handle the rejection inherent in this method, but the results, in my estimation, greatly outweigh the pain of rejection.
How about using bird dogs to secure leads? Bird dogs are an excellent way to generate leads in the security business. How about referrals from existing customers your company already does business with? Do you often make sales as a result of referrals? What about personal direct mail? Determines, with management guidance, residences and businesses that are more likely to purchase your product, and then send personal direct mail to those prospects to arrange for an opportunity to present the product. Can leads be developed that way?
Does the company provide any leads? If so, how many on average can you plug into the calculation? Not to belabor the point here (I’ll cover how to develop leads in another chapter), part of the action planner has to include the daily activity needed in order for you to develop enough leads to make sixteen presentations, which will result in four closed sales, which will result in achieving the goal.
If you do all of these calculations, and put them on a spreadsheet for the first year with an escalating number of presentations and sales, resulting in the achievement of the goal, you can then plan the achievement of your desired income goal. Remember, this is your goal—to help you make enough sales in order for you to drive your new car next year, if that is what you want.
An example of what that road map/action planner could look like follows.
4. Prospecting: Lead Development
“Give a man a fish and he’ll have food for a day.
Teach a man to fish and he’ll have food for a lifetime.”
I know companies that have ruined their sales force by hand-feeding all leads to them while at the same time complaining that their salespeople have become lead junkies. If you continue giving a man fish, he has no need to learn how to catch fish. The same is true with leads. In a perfect sales world a company would generate enough company leads to reward salespeople for generating their own leads. A one-to-two ratio would be satisfactory. Here, the company provides one lead for every two leads the salesperson produces for himself.
You should invest time in training learning how to develop your own lead sources.
Developing methods to continually find prospects is of paramount importance. A company can start with a team of better-than-average salespeople, give them leads every day for a year or two, and before you know it they’ve created “lead junkies,” salespeople who no longer know how to fend for themselves, how to feed themselves.
Don’t get me wrong, I’m not against giving salespeople help in the way of a lead. However, the leads the company provides should not be enough for them to feed their families on. The leads the company provides should be the bonus given for finding prospects on their own.
In top sales organizations, it is the sales manager’s job to teach the salespeople to prospect for leads. However, at the end of the day, your financial future is still in your hands. Every chance you get you should go to sales seminars, and buy books and CDs on the topic of lead generation. The fact is that you can’t sell unless you have someone to sell to.
The following paragraphs will cover numerous methods of finding people to sell to. However, let me give you a few words of caution first. First, no one method listed here will work by itself often enough to make a big difference. Second, there is no way you can utilize all lead-generating methods simultaneously. Pick three, or four of your favorite methods, and then work them consistently and hard. Just as important, you must manage the process.
The 15 + 15 + 15 rule.
Let’s start by talking about the 15 + 15 + 15 rule. It begins by you sending fifteen pieces of mail to fifteen targeted prospects every day.
In my home, and I’m sure yours, direct mail has a name: junk mail. I wouldn’t want to suggest your salespeople send fifteen pieces of junk mail to anyone, because the prospect will likely do what I do, and what 75 percent of the people who receive junk mail do—throw it away, trash it without even opening the envelope, file it in the circular file.
The national average for direct mail response rate is approximately half of one percent, pretty dismal. If one sends direct mail by the thousands and hundreds of thousands, it works. However salespeople can’t and won’t do that. So, how can we make the mail you send more effective? First, let’s ask ourselves how we know mail is junk mail before opening it? How can we feel so confident throwing it away without first finding out what’s inside?
Here’s how. The envelope says “You Have Won!” on the front. Or it features Ed McMahon’s picture, “Special offer inside,” and other such phrases. The envelope has a postage meter stamp, or it has a bulk-rate stamp. The envelope has a return address or name I don’t recognize. All of this causes me to make a fast decision that it is junk, and that I can throw it away.
My friends don’t use a permit mail machine or a bulk rate stamp to send me letters. My friends usually use a real peal and stick stamp. My friends usually don’t have my name on mailing labels. And my friends don’t preprint messages all over the envelope. They usually use the paper inside to tell me what they want to say.
Given all that, there are three basic rules for direct mail to be effective:
The prospect must open the mail.
The prospect must read the mail.
The prospect must take action.
If the prospect doesn’t open your mail, all else is worthless. You could’ve placed a cashier’s check for a million dollars inside, and no one would benefit. Therefore, the first thing you must concentrate on is getting someone to open the letter you send. Here’s how you can be sure the prospect will do that. And I guarantee that if you do exactly as I say, 90 percent or
