How many Initial Appointments do we need this year (and this week in particular) and why is it important to know that?
It is important to know how many Initial Appointments we need each year, month, and week, in order to make our “2009 new revenue” quota. Why? Because it is the easiest activity based goal that can be monitored, measured and managed on a weekly and even daily, basis. Don’t have enough Initial Appointments on your calendar for next week? Get on the phone and fix it today before you get too far behind the proverbial ‘8’ ball.
We suggest that this is the most important question we have to answer each year and it takes four quick steps to calculate it.
- First, take the revenue that must come from new customer sales in 2009 and divide it by the average size of those sales – that will give us the number of new sales we will need.
- Next, we need to estimate our Close Ratio. We do that by measuring the sales we make divided by the number of Initial Appointments we need to go on in order to close those new sales.
- Now, take the number of new customers needed (answer from question number 1) and divide it by the Close Ratio we got from answering question number 2. That will give us the number of actual Initial Appointments we need to go on this year.
- Lastly, we’ll take that number and divide it by the number of selling weeks we have available to us this year (44 in most cases).
For example, if my quota of $240,000 is divided by $12,000 (Step 1), it equals 20 new customers. When 20 is divided by a 25% Close Ratio (Step 2), the result is that I need 80 Initial Appointments. If there are 44 full selling weeks in a year (typical selling calendar believe it or not), I need to average 2 per week (actually 1.8 to be precise).
It’s much easier to manage to that number than to keep looking at that $240,000 quota and wonder where it will come from.
If you’d like a calculator to help you with these calculations (as well as a few more), send Barry an email at barry@coldcalling101.com. It’s free and the newest version has just been released for those of you who’ve used it before!
The new calculator can now help us figure out the number of leads we need from various sources (next week’s Blog topic, by the way), so we can work in an empirical manner to reduce the number of ‘Cold Calls’ we’ve got to make in order to hit our specific goal of Initial Appointments.
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