For managers, what is the value of knowing our cold calling or appointment setting metrics?
Knowing the five key metrics of sales can keep us from setting our Sales Professionals up for failure without even knowing it.
First of all, what do I mean by metrics? There are only five metrics that can influence how well we bring home the bacon as the old saying goes. They are:
1. Average size of our sales – how do I measure it and what are the ways that I can influence it;
2. Closing Ratio – we measure it from Initial Appointment to closure;
3. Dials – the number of times I dial the phone to attempt to set an Initial Appointment;
4. Conversation Ratio – the percentage of those dials that result in an actual appointment setting conversation with the person I want to meet with; and
5. Appointment Ratio – the percentage of conversations with those Targets that result in an Initial Appointment;
What we do with each of these individual metrics is the subject for a future blog perhaps. But at a macro level, it is important to note that numbers 3 through 5 obviously relate directly to appointment setting. However, surprisingly enough though, so do numbers 1 and 2. Let me explain the importance to us managers of knowing these metrics.
The key is that when coupled with the revenue goal for the year, knowing all five metrics will provide me with the understanding of the daily or weekly activity necessary to hit that goal. Sometimes these numbers bring the cold reality of life to the forefront.
For instance, in the example below, let’s assume that our boss has handed down the new business goal for the year that we, as the head of sales, must meet. When we divide it by the number of new business Sales Professionals we have, we come up with an individual goal of $1,000,000. We also know historically the value of a new customer over a twelve month period (how we measure first year revenue for commission purposes) is $12,000. That means each of our intrepid Sales Professionals must close 83 new customers over the course of the year. To do that based on our other current metrics (see first column on the left), our metrics indicate that each Sales Professional needs to generate 105 appointment making dials per day. Not gonna happen for an outside selling person.
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