“Put the coffee back. Coffee is for people who close deals.”
The film “Glengarry Glen Ross,” featuring a cast of high-caliber actors, revolves around real estate salespeople who are under pressure from the corporate management due to their low sales. At this point, I recommend watching Alec Baldwin’s 8-minute speech on YouTube, which is full of sales wisdom, from AIDA to ABC (Always be closing) to leads, funnels, and quotas.
But now, let’s be honest. Which salesperson actually knows their success rates and still believes in the truth of quotas?
Which salesperson actually utilises the significance of success rates to increase their sales?
Many salespeople know their closing ratio and calculate it regularly.
Some salespeople also know how many phone calls lead to an appointment.
Well, that’s where the belief in quotas ends for many sales professionals.
Wouldn’t it be nice if a salesperson knew at the beginning of the year how many phone calls they need to make to active customers and potential customers in order to achieve their desired commission at the end of the year? This, too, is calculable.
So, what are these quotas and metrics in sales good for?
Quotas serve as a tool for the salesperson, documenting their current performance through the following metrics:
How many phone calls do I need to make to get an appointment?
How many appointments do I need to get a sale?
What is the average revenue per customer?
How many new customers and repeat customers do I have and need this year/quarter/month?
How many phone calls do I need to make to customers and potential customers this year to achieve my desired commission of X euros?
But quotas are not only used to document current performance. They also serve as so-called “adjustment screws” for successful salespeople.
Because if I know my quotas and I’m falling behind my sales plan, I can turn the quota screws to still reach my forecast.
Here are some examples of adjustments to the quantity and quality screws:
The quantity screw:
If my “appointment vs. sale” ratio is good, I may need to improve my “phone call to appointment” ratio so that I can have even more appointments. If I can schedule more appointments over the phone, I will be able to land more sales.
Perhaps I need to increase the average revenue per customer through upselling or cross-selling.
The quality screw (because without it, the quantity screw won’t turn):
Do I need to sharpen my phone arguments by emphasising the benefits of my offer more strongly to the customer and thus get more appointments?
Do I need to provide clearer and more explicit benefits to my customer so that they will consider a budget increase?
Do I need to regularly bring a colleague or sales manager to customer appointments to define the points of improvement in the conversation or proposal through post-sales maneuver critique?
How can I improve the needs analysis to ensure that the potential customer truly benefits from my offer and whether they can afford it? After all, who likes to invest time in the likelihood of failure?
Both screws work in direct correlation with each other and solely serve to improve your sales quotas. Along with a salesperson’s healthy mindset, quotas are among the most important parameters for personal development in sales.
The correct qualification of the right potential customers always comes at the beginning of the sales process. Only with a solid foundation of potentials in the pipeline can the adjustment screws be strategically used to improve quotas.
However, if the database consists of potentials that don’t qualify for my offer, then the foundation for further quota improvements is missing. If someone doesn’t need or can’t afford an offer, even the best handling of objections won’t help.