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(SALES) Moneyball Its Not Just for Baseball

7-15-2013

Of the millions of people who flocked to see the award-winning movie "Moneyball," many surely earn a living working in sales. But what percentage of these sales-oriented moviegoers was struck by the epiphany Wow, those sabermetrics could help me perform better, too? Its really not a guess to suggest the percentage is probably close to zero.

I know this because, as a DOS, I watched my sellers try to become invisible anytime I attempted to support a training lesson with the use of numbers. With seemingly choreographed synchronization, my sales representatives would slide down in their chairs, often accompanied by a collective roll of the eyes at the very suggestion of a math problem. (The only other exercise that elicited such a negative response was role playing.)

I cant help it! Ive always regarded the failure of sellers to embrace the lessons available from simple mathematics as silliness bordering on dare I say it ignorance! Consider these simple truths:
1. Im not talking about calculus or trigonometry. Enjoying the performance benefits from studying the numbers only requires mastering the grade-school basics of addition, subtraction, multiplication, and division.
2. At its core, sales is, and always will be, a game of numbers.

And yet, these truisms notwithstanding, I am guaranteed to get that deer in the headlights response when I ask sales representatives to tell me their respective closing ratios. The math is simple but the question itself causes a brain cramp. That said, if I can convince only a few sellers to join me in the treacherous numerical waters, my work will have been worthwhile. To that end, my best chance of teaching success requires me to demonstrate both the simplicity and power of doing the math. So, lets give it a try.

By reviewing her calendar for the previous month, a hypothetical sales representative can easily determine that she made 60 client presentations and successfully closed 15 contracts. Using simple math (and a small leap of faith), this seller will divide 15 orders by 60 attempts to realize that her closing ratio is 25 percent (1 in 4). By adding the dollar value of her 15 contracts, she learns that her orders totaled $75,000 last month and, when she divides $75,000 by her 15 orders, she can see that her average contract equals $5,000. Now, suppose this sellers manager has established her monthly budget (quota) as $150,000. Because she did the math, the sales representative can easily determine that she must write 30 orders to reach her budget and she can be fairly confident that she will do so by making 120 client presentations each month. By just letting the numbers dictate her activity, our seller is guaranteed to be successful. Now thats power!

Superior sellers recognize there are actually two impressive benefits that result when they embrace the numbers:
1. Because sales is a numbers game, aggressive use of math WILL improve revenue production; and,
2. By following the numbers, sales representatives are actually managing themselves and, as a result, they will suffer less scrutiny from the boss.

Jon E. Horton is the author of The 22 Unbreakable Laws of Selling available in both paperback and Kindle versions from Amazon.com. For more on this topic, please read Chapter 4, The Law of Numbers. Contact Jon@JonEHorton.com.




(11/17/2013 9:28:32 PM)
DqKZX4 A big thank you for your post.Really looking forward to read more. Keep writing.

- NY
(10/25/2013 3:55:46 AM)
Ezs7uV Very good post.Thanks Again. Will read on...

- NY
(7/18/2013 1:26:14 PM)
Very simple and well put, and certainly a concept that all sales managers should work into their "routines" on a regular basis.

Of course the real world is full of little nuances that can impact this basic truism---like the quality of the accounts being called upon, your station's position in the "market pecking order", etc.

But----the basic mathematics are still a sales truism---nobody ever expanded their billing by making "fewer sales calls"! Good point Jon!

- Davis Nathan
(7/16/2013 1:09:17 AM)
That's a great article Jon! Well said!

- Sean Luce

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