I talk to producers every day. I hear lots of success stories and I hear lots of challenges; I hear about things they love doing and I hear about things they hate doing. Success or challenge, love or hate, there are two things that are consistently discussed as part of all four: practicing and prospecting.
Those who are most successful practice their sales presentations and prospect on a regular basis. Those who are most challenged don’t. And, you may think I’m going to tell you that the most successful love to practice and prospect while those who are challenged hate it. Not true. The most successful practice and prospect even though they may not enjoy either one.
Bottom line, you can’t be successful without practicing and prospecting. You already know that, right? But, I bet you don’t understand just how drastically practicing and prospecting affect your ability to achieve successful results.
Let’s start with the practice
Of course, you need to have a defined sales process to actually practice, but, for sake of this explanation, I’m going to assume you do (even though I know you probably don’t).
I’m going to use the sales process we help agencies build as an example; it has three steps.
- Success in the first two steps are measured by moving to the next step (conversion ratio).
- Success in the final step is measured by how many of those final presentations close (close ratio).
Obviously, the goal is to have the highest conversion and close ratios; the result of effectively executing each step.
As you would expect, producers are not very proficient when they first learn our system, but with practice their proficiency goes up.
Want a little motivation to practice?
Let’s assume your goal is to write $150,000 in new business with average revenue/account of $10,000.
You need to write 15 new accounts. Based on the typical conversion and close ratios (you do track your own ratios don’t you?) we see in brand new producers, it would take 80 first-meetings to close those 15 accounts.
As producers practice and become more proficient, we see conversion and close ratios go up. Once a producer has put in the time to practice each step to the point of proficiency, we see conversion and close ratios improve to the point that it only takes them 25 opportunities to close those same 15 accounts.
You think that’s time well spent?!
Do you need a sales process to follow? YES!
Do you need to practice it to the point of proficiency? HELL YES!!
But you still have to prospect
Obviously, it’s easier to do the prospecting work that it takes to generate 25 first-meetings than it is to generate 80 meetings. But, in either scenario, the type of prospecting you do will determine how much time/effort it will take.
There are basically two ways to prospect: cold call or generate referrals. Let’s look at a couple of examples of how your combination of these prospecting efforts determines how much prospecting work needs to be done.
Let’s assume you are a producer who hasn’t practiced and you need to generate 80 first-meetings. Let’s also assume you are like most producers and not actively asking clients for referrals/introductions. That means you need to generate those 80 first-meetings from cold calling efforts.
Next, let’s assume you are an average cold caller. According to Keller Research Center at Baylor University1, a mere 1% of cold calls convert to appointments. This means you need to make 8000 calls to set those 80 meetings. When is the last time you made 8000 cold calls? When is the last time you made 800 cold calls?! Hell, when is the last time you made 8 cold calls?!
Yes Virginia, there is a better way
Now, instead of focusing your prospecting activities on cold calling, let’s assume you choose to generate referrals from your best clients. Let’s also assume you are a producer who has committed to practicing and, now, only need to generate 25 first-meetings.
In preparation for the request-for-introduction meeting with your clients, let’s assume you did some research and identified four ideal prospects that each of your clients knows and to whom they could make an introduction. Let’s assume you are only going to have this conversation with your best clients, clients who are more than happy to make the introduction and who have the proper influence with your ideal prospect.
If they were only successful with half of the introduction requests (remember, you are asking your best clients for introductions to their best business relationships – half is probably conservative), you still only need to approach 12.5 of your clients to get the 25 first-meetings you need with prospects.
And, guess what? By the simple fact that these first-meetings are the result of referrals, they are much higher quality (e.g., will convert and close at a significantly higher rate) than the first-meetings resulting from cold calling.
Where are you going to spend your time?
It’s up to you: Don’t practice, depend on cold calling, and go make the 8000 calls to have 80 first-meetings with cold prospects.
OR, practice and be disciplined with your prospecting efforts and go have a meeting with 13 of your best clients to have 25 first-meetings with more qualified prospects.
Note to Sales Managers – DO NOT allow your producers to use this article as an excuse to not cold call! DO NOT buy into the BS that cold calling is dead! It may be more difficult than before, but, when done well, it still works. No, cold calling is not the preferred way to generate leads, but when a producer is just starting out, they have no real option. Besides, cold calling is a skill that every salesperson needs to keep sharp.
Photo by Bowie15