As we start thinking about the new year, most agencies are (hopefully) starting to new set goals. The cornerstone goal is likely the amount of new business they need to write as an agency, followed closely by the allocated goal for each producer.“Next year, we will grow by 15%; each producer will write at least $125,000 in new business.”
Seems like a logical approach to defining success for the new year, right? Well, let me ask, “How’s that been working out for you?” Probably not well.
- First, the goal has no immediate sense of urgency.
- Next, because the goal set seldom has any real basis, nobody really believes in it.
- Then, because nobody really believes in it, there is no real accountability or any consequences when it isn’t hit.
- And, because there is no accountability or any consequences, the goal is really nothing more than a suggestion.
Sound familiar? And do you really wonder why you aren’t hitting your growth goals?
The problem with this approach to goal setting and sales activity is that it’s primarily focused on the finish line and pays little attention to the activities that lead to new sales. When you aren’t hitting a goal, you have to take a step back and make your primary focus the activity that allows the final goal to be achieved in the first place.
Sales isn’t the job, marketing and prospecting are the job
Any good salesperson can close deals. The difference between good sales people/organizations and great sales people/organizations has little to do with closing techniques. The difference-maker is the ability to open doors. With enough quality leads (defined as “ideal” prospect), the sales numbers take care of themselves.
As a sales organization, your primary goal and definition of success must shift to focusing on opportunities created, both quality and quantity.
Two sources, two goals
Leads come from two basic sources: Those generated from the agency’s marketing efforts and those generated by the salespeople (aka “prospecting”). It’s time to establish goals for each source.
Now, I’m not suggesting a growth number doesn’t factor in, it does. But that growth goal is nothing more than the starting point and shouldn’t be the primary focus.
You have to know some important numbers to get to the core focus
- Growth goal - Let’s assume the agency goal is $500,000.
- Average account size – Let’s assume the target is $10,000/year/revenue
- New Accounts written – We now know we need to write 50 new accounts.
- Close ratio – If your close ratio is 20%, then you need 250 leads.
Creating 250 opportunities should be the primary goal.
Now we’re starting to focus on the right things that will lead to the end results you really want to see! Here’s why this is a more appropriate focus:
- You can break it down to the creation of five leads/week, creating a sense of urgency.
- You can get buy-in because it’s based on past results (close ratio).
- Because it is always clear whether the team is on track or not, accountability and consequences become easier.
- With accountability and consequences, stuff gets done.
Who will do what? Marketing? Prospecting?
An effective marketing strategy, while it takes longer, is the most predictable generator of leads over time. Conversely, prospecting, while less predictable, is the quickest path to new leads.
Your first decision is to determine how much of your growth needs to be driven by marketing-generated leads and how much of it will be driven by prospecting-generated leads. Let’s assume 50-50.
The primary goal for your marketing department should be to create 125 “ideal” leads. Their secondary goals could include the number of visitors to the website, number of conversions, number of marketing-qualified leads, etc.
The primary goal for your producers should also be the creation of 125 “ideal” leads (divided among the producers) through prospecting efforts. Secondary goals for producers could include number of cold calls, referral conversations with clients, etc.
It’s a brand new ballgame you need to be playing
The game you must be playing this year is lead generation. You have to predictably generate leads through marketing, and you have to predictably generate leads through traditional prospecting efforts. Do this in the right quality and quantity and your growth goal will take care of itself.
But of course, goals mean nothing without the ability to execute. So, that begs two obvious questions.
- Have you armed your producers with the training, sales process, and value proposition to go out and prospect with confidence?
- Have you developed a marketing strategy that, when executed, is capable of actually generating leads?
If you can’t answer yes to both questions with absolute confidence, give us a call, we have a few ideas for you.
Photo by Dmytro Konstantynov