If I told you that a 12% increase in your sales effort could result in a 50% increase in your end of the year production, would you be interested?
I’m a runner and, of course, there are days I feel especially strong and others when it’s a real challenge to push myself out the door. Despite the ease or challenge of getting started, I run a pretty consistent pace. However, I have noticed that there are runs when my pace is significantly faster. It’s the days when someone is watching. Or, to be more specific, when I’m running where there are other runners around.
I’m competitive and just the presence of another runner - doesn’t even have to be a race - makes me run faster. This faster pace caught my attention and I decided to compare my paces to see just how much faster I was running because of the “competition.” Turns out that running with other runners around improved my pace by about a minute per mile, around 12% faster.
Pick up your pace
As producers, we are naturally competitive. Unfortunately, we are more often competing against our own previous performances rather than against the other “runners.” I know that most of you have other producers in your agency, but, if you’re being honest, there are no real competitions going on. You’re all running around a track, but it’s your own private one. That needs to change. I think you should ask another runner to step out on the track with you. I would just about guarantee that it would cause you both to pick up your pace. Imagine what would happen if you improved your “pace” by 12%?
Let’s say that your typical pace is $60,000 per year. Of course, you could look at the final result, increase it by 12% and see that already that would result in a new pace of $72,000. But, I think you can do even better if you start competing at each stage of the race.
Compete at each stage of the race
Let’s break the race down: Assume that during your last race (last production year), you wrote that $60,000 with 6 new accounts averaging $10,000/account. Let’s also assume you had a close ratio of 20% on the 30 opportunities you worked on during the year. Now let’s look at what would happen if you made each of those stages its own race, one in which you could improve your performance by 12 percent.
It all starts with opportunities. Instead of having 30 opportunities to work on, you now have 34. (I’m taking advantage of the rounding here.)
Your improved close ratio will now move from 20% to 22.4%, which means, with 34 opportunities, you will now write 8 new accounts (again, that rounding thing).
You certainly can’t allow your competition to work on larger opportunities than you are, and you now find that the average revenue per new account you write has also increased by 12%. You have to love $11,200 accounts at least 12% more than $10,000 accounts.
So now, at the end of the race, you have written 8 new accounts averaging $11,200, each for a new pace of $90,000 ($89,600 to be exact, but runners always exaggerate their pace – at least a little bit).
You gotta love the “new math!” A 12% increase, compounded at each stage of the race, results in an overall increase of 50%! And don’t tell me you don’t have another 12% in your tank!
And, you know what? On those days when I am running on the track with someone else, I have a lot more fun, it doesn’t feel like I work nearly as hard, and I definitely step off the track with more energy and a greater sense of pride. Not a bad bonus. As if the 50 percent increase in new revenue wasn’t enough.
Once you run this race, look up ahead; there’s another runner for you to track down. You just have to ask yourself, “How badly do I want to catch them?”
Photo by Bill C.