Do Your Sales People Have Enough Opportunities?

The last newsletter discussed how having and making the sales quota is critical to the success of the organization and individual sales person.

The “Individual Sales Plan” we discussed will define the quota that the sales person needs to meet and the way to meet this quota is to close opportunities. The sales persons opportunities will be listed in their Opportunity Log that we discussed last month with a realistic estimated close date, the status of the opportunity within the customer’s system and the probability that you will get the order when it is placed.

This Opportunity Log can be used to manage the follow up and closing process. It can also be utilized to define expected sales that lead to establishing plans for the sales person and organization. So, for this to work for each sales person, they need to have enough opportunities so they have a chance at closing enough of them to meet their quota.

This leads to the question, “Do Your Sales People Have Enough Opportunities”?

Sales is a numbers game and fortunately the number of opportunities required to meet quota can be calculated or at a minimum estimated. We start with assumptions and percentages based on historical data including the quota, average dollar amount of a quote/opportunity and close rate.

Using these details, we can calculate how many opportunities are required in the Opportunity Log to meet quota and even expand this analysis to how many meetings are required to receive enough requests for quotes to reach the opportunities required. Knowing these numbers allows the sales person and organization to gain a better understanding of what they are doing and plan for the future.

An example can help clarify the quantity of opportunities a sales person needs to have. Starting with their quota and a close rate of 30%, they will need around three times as many opportunities that can close in their Opportunity Log for the year than opportunities they will close.

Take this opportunity quantity and calculate how many quotes this will require and then how many sales calls need to be made to find that many requests for quotes. Factor in that several sales calls will be required to find a qualified request for quote and this will be the starting point for planning sales days.

Typically, sales people need to have 4 targeted sales call meetings each day to reach this number. The key to these numbers is they must be reasonable and attainable.

The key to the Opportunity Log is understanding how many of the opportunities they can close and how many are just quotes that had to be done or were done. It is important to remember that 30% is a reasonable close rate but this number will fluctuate.

If it is lower, typically the wrong applications are being quoted, they do not have the value the customer requires, or they are not being worked correctly. If it is higher, the opportunity may be priced wrong leaving money on the table or not enough applications are being quoted.

What is important is that the quantity of opportunities the sales person has allows them to meet their quota. If a sales person is very targeted and only quotes specific applications to specific customers but these customers buy enough to reach quota, this is probably acceptable to most managers. The opposite may not be true as most companies are not in the quoting business and need to focus their resources on quoting opportunities that have a reasonable chance of closing when possible.

So, looking at the Opportunity Log and defining how many opportunities each sales person has, then factoring in the probability of them closing will provide a starting point to knowing if they have enough. Then working back to the sales calls being made to find the opportunities and assessing how the organization handles the opportunities will help determine “If Your Sales People Have Enough Opportunities”. Surprisingly, this will lead to better management of the sales process and provide better forecasting and planning tools for the organization.

“A Habit” is not work, but just a thing that is done every day and having enough opportunities to make quota is critical to your success in sales and can easily become a Habit.

TIME MANAGEMENT. For Top Performers every task is planned and focused on the goals that earn the results. Top Performers plan and then engage. They act on their plans, they work hard and they get results.

Coaching these skills is a critical part of what we do. We are here to help you develop and implement your Strategic Plan and coach and develop the skills to implement the plan successfully.

We are having great success coaching and implementing these methods and skills and our clients love it!