Sales Prospecting Techniques
Sales prospecting techniques that top professionals use to make the best possible use of their time
Do you know how many new sales prospects you need to add to your prospect list this month?
If you don't, how can you plan your sales time.
How do you know when you've got enough.
When do you move on to appointment setting or closing sales.
As a working sales manager and trainer I see sales people getting their priorities wrong all the time.
Top sales professionals make achieving their sales targets easy with proper planning and calculations.
You can now see the prospecting techniques they use and use them to achieve your sales targets and commission payments, or grow your small business sales.
Once you get the sales prospecting right the rest of your sales stages fall into place.
...That's how top performers make it look so easy..
When you've calculated these prospect numbers for yourself your whole sales month will follow a plan.
These 4 Easy steps to your personal sales prospecting plan will give you targets to aim for on prospecting and setting appointments.
Hit these targets and you are on your way to achieving your sales goals on a consistent basis, using a proven plan that sales professionals manage their time around.
...Try it, you'll get a plan to follow each month and a big advantage over others that don't..
This may sound strange, but so does a lot of the training I present, because I'm going to start with a summary.
By starting with what's normally at the end you will get a better understanding of where we are heading. So here's the summary of the sales prospecting calculation.
Find your average sale value or size.
Divide your sales target by this number.
You now have the number of sales you need each month.
Work out how many prospects you make appointments with per sale.
Calculate how many sales prospects you need to meet with to give you enough sales to hit target.
Find the number of sales prospects you contact for each appointment you make.
Calculate how many prospects you need to contact to make enough sales appointments to achieve target.
You now have the starting point for all your sales activity.
Gathering prospects is where it all begins. We all like selling, closing the sale, claiming the commission, or growing our bussisness.
But to be successful in sales you have to know how many sales prospects you need each month. Then you can plan how much time to spend turning these prospects into sales appointments. Only then can you start selling.
Once you've worked out how many sales prospects you need take a look at how to get them at How to prospect and start building your list of sales opportunities.
Follow these 4 simple steps and give yourself a sales plan for success.
1. Calculate your average sale value
Divide your sales target by your average sales order size using the same units.
So if your sales target is a monetary value then calculate your average order value in money.
For a target measured by units sold, work out the the average number of units per sale.
A simple way to calculate the average order size is to divide your total amount sold in a month, or sales period, by the number of orders you sold.
If you sold 15000 units by selling 30 orders your average order size is 500 units. 15000 divided by 30.
If you sold a total value of £15000 worth of product, and to achieve this you sold 30 orders. Your average order value is £500.
...That's step 1 completed, you're on your way..
2. How many average orders to achieve target
We're looking for how many sales you need to make to hit your target.
Take your sales target for a month, or a sales period.
Divide your target by your average order value, or size, whichever is appropriate.
This will give you the number of orders you require each sales period to achieve your target.
Following on from the above example. The average order value is £500. If your sales target is £20,000 the number of orders required to achieve target would be 40.
£20000 divided by £500.
...Look at the information you have afer just 2 steps. Have you thought about these figures before?..
3. How many prospects do you need to see
Next we calculate how many appointed prospects you need to see in order to achieve target.
This is not necessarily the number of appointments you will make. You may meet with some buyers more than once to make a sale.
This will depend upon your industry and the average sale value.
Higher sales value usually means more meetings with a sales prospect.
We are interested in prospects, and how many you will need to make appointments with, and see, per month to achieve your target.
To do this you need to know your sales to appointed prospect conversion rate.
Caculate your conversion rate
Look back at a typical sales period's results and your appointment diary.
Add together the number of prospects you met with. If you saw them more than once still only count them as one.
Don't count missed apointments and count rescheduled meetings as just one sales prospect.
Now take the number of individual sales that you made for that same period.
Divide your number of sales into the number of prospects you met with. This will give you your conversion rate of sales to appointed prospects.
Continuing our example
The orders sold in section 1 above was 30 for a sales period.
If you had met with 60 appointed prospects to achieve that number of sales your conversion rate would be 1 in 2.
60 divided by 30.
On average you make a sale with every second appointed prospect they meet with.
If you sell high value products you're figure will be a lot greater. If you sell £1million computer systems it will be many times higher than 1 in 2.
..Unless you have extremly good sales skills...
This next calculation will tell you how many sales prospects you need to meet with to achieve your sales target.
Use the number of appointed sales prospects seen per sale from the above calculation.
In the example we are following that's 2, because the salesperson converted 1 in 2 appointed prospects into a sale.
Multiply that number of appointed prospects seen per sale by the number of orders required to achieve target.
You calculated this in step 2 above.
In our example so far, the prospects seen per sale is 2. The number of orders required to achieve target, from step 2 above, is 40.
2 x 40 = 80.
This tells us that the sales person in the example needs to meet with 80 prospects to achieve their sales target.
How many do you need to meet with?
Think about how important this figure is.
You now know the number of first sales appointments you need to make each sales period to achieve your target.
The only time this figure will change is if your average sale value or size changes.
Now you have this important information lets use it as a prospecting tool.
4. How many sales prospects to get enough sales appointments
What's your conversion rate of sales appointments to sales prospects you contact?
As a sales manager and coach many people I work with have never worked out how many prospects they convert to sales. So how can they plan their time and sales activity? How do they know they have enough prospects?
These are the figures that top sales professionals live by. They know exactly how many sales prospects per month they need to add to their prospect data base.
Now you can calculate your sales prospecting figures.
When you have a telephone appointment setting session, how many appointments do you make for every 100 prospects you contact?
...What do you mean you don't contact a 100 prospects?..
If you make your appointment setting calls throughout the week, how many calls do you make to gain one sales appointment?
How many doors do you knock on to get one direct sales appointment.
If you don't yet know, estimate your conversion rate of appointments from contacted prospects.
It could range from as low as 1 in 3 for low value products. To 1 in a 100 for high value sales. To get an exact figure, check the next time you have a telephone appointment setting session.
If you achieve 25 appointments from 100 calls your conversion rate is 1 in 4.
Now we get to the important number for sales prospecting. With this number you will kick start your new sales activity plan
Take the sales appointment conversion number estimated above, calculated by the number of appointments you gained from the number of prospects you contacted.
In our example above it's 4.
25 prospects from 100 calls.
Multiply it by the number from step 3 above.
So we have 80 x 4 = 320 sales prospects required each month to have any hope of hitting the sales target.
In our example the salesperson needs to do enough sales prospecting to gain 320 prospects which will give them 80 sales appointments.
From those 80 appointments they can expect 40 sales.
That's because their sales conversion rate is 1 sale for every 2 prospects appointed. And we know from the earlier calculations that they need 40 sales to achieve target at their current average sales order value.
If the number of prospects you need to make has come as a shock you're not alone.
Many of the sales people I coach soon realise why they are not achieving their targets. They simply don't have enough prospects or they don't convert enough of those prospects into sales appointments.
Sales people with great sales skills can't use those skills until they get in front of the prospect.
You can see from the above calculations that one way to reduce the amount of prospecting you have to do is to increase the number of prospects you convert to appointments.
A 25% increase in sale apointment skills would drop the number of propsects in our example down from 320 to 240. That's a big reduction in sales prospecting time.
As an example, take a look at the sales appointment training course I use with my sales teams.
It will reduce the amount of prospecting you have to do, and leave you more time free for selling.
And that's where the money is.
To see the course I use with my team click the image or open Sales appointment and cold calling training.
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