Just because you own your own home-based or other small business, franchise or distributorship doesn’t necessarily mean you’re an expert when it comes to sales. You may be getting the job done ― and doing it quite well for that matter ― but even the most experienced sales professionals will tell you there is always something new to learn.
Let’s take a look at lead generation for example. Sales and marketing professionals in the largest corporations know that determining how many leads or prospects it takes to make a sale in their industry is a critical part of their planning matrix. In fact, it’s critical information when it comes to determining the size of a company’s sales force, the extent of its marketing efforts and its overall budget. Most importantly, this kind of data allows for goal-setting and provides a roadmap for everyone to follow, one that lays out specific benchmarks at select intervals to ensure everyone is on track as the year unfolds.
Unfortunately, when it comes to the home-based or other small business owner, franchisee, licensee or distributor, many of them don’t take the time to engage in this critical exercise. Why? Sometimes it’s just not a priority ― they’re making sales and doing just fine, for now anyway. Sometimes it’s a basic lack of know-how or even a refusal to see just how important this kind of information can be for their long-term growth and success.
Whatever the reason, NOT taking the time to answer the question of just how many leads/prospects it takes to make a sale in your business can really have a negative impact on your profitability. Thankfully, doing the work to anticipate just how many leads/prospects you need to make a sale in a given time period is not as hard or time-consuming as you might think.
Calculating How Many Leads It Takes to Close a Sale
There are a number of online resources that can assist you in gauging how many qualified sales leads/prospects you will need to make a sale. Some of them are free-of-charge, others can be purchased and should be evaluated based on the degree and usefulness of information they provide for your overall investment.
These more elaborate sales-lead calculators are generally designed for business-to-business sales and provide a tremendous amount of data based on the information you provide about your business and goals, including everything from new customers, qualified leads and total inquiries needed in a given fiscal year to the average cost per inquiry, qualified lead or sale ― along with pretty much any other data you could ever want or possibly need. Just type Sales Lead Calculator into your browser, and watch your options appear!
For those of you who are looking for the short, easy and somewhat over-simplified version of how to calculate your sales leads-to-close ratio, consider the following:
For instance, if you had 300 leads over a three-month period and also closed 30 sales over that same period, then your close rate is roughly 10% for that quarter. Just having that information alone can be helpful in guiding your marketing and prospecting efforts over the next year or so, but it should also prompt you to ask further questions, such as “What is the best closing strategy?” or “How can I close more sales?”
The “ABC” Debate
In the world of sales, it’s been a long-held strategy to “Always Be Closing” (ABC) throughout the entire sales cycle. Some argue that this approach puts a degree of pressure on the customer to buy right away, which actually creates resistance to the sale. When a sale is made based on the ABC premise, some might claim that it’s not the “right” way to get the job done because customers who buy when they really don’t want to end up with buyer’s remorse. This leaves the customer with a negative perception of the seller and his/her company, ultimately destroying any potential long-term relationship between them ― a dynamic that is never good for any business.
The ABC sales strategy, if employed correctly, can be very effective. But guess what? The softer, less hard-hitting approach can and does also work well for certain people in certain circumstances.
All of the back and forth on this issue is somewhat speculative when you consider the random and unique nature of any given sales exchange. The fact is that the best salesperson is the one who does his/her homework so that they have every weapon at their disposal in advance and on cue. The real secret to success is to be informed and find the approach that works best given your overall goals, the products/services you offer and your past experiences with potential-buyer objections. At the end of the day, knowledge is power.
Tips for Closing More Sales
As a home-based or other small business entrepreneur, you’re always looking for ways to close more deals. Even if you’re doing well, you want to do better, right? Although there really is no magic bullet when it comes to sales, there are some basics that any good salesperson must engender or follow if they want to be successful and close more of them: