It’s Dollars Not Deals
Once again I have been witnessing an exchange of opinions on how to account for sales performance, this time taking place inside a Linked-In™ sales management group. I continue to be amazed that anyone who calls themselves a “sales professional” would engage in using a “deal count” as a “sales close ratio”.
The bottom line in sales is dollars not deals.
Case in point (names changed to protect the guilty):
If Sally writes 100 quotes in one month worth a total of $250,000.00 and then closes 50 deals worth $32,000.00. Her deal close rate is 50% but this is not SALES, this is deals!
Sally’s close rate is $32,000.00 / $250,000.00 = 12.8% and Sally sucks as a sales person.
Sales people like Sally, want to avoid accountability at all costs. When they are in the accountability spot light they want to be reviewed for non-tangible performance, such as time with customers, solving claims/credits etc. Then, when under real pressure, will throw out their quote to closed deal ratio as a key performance metric, in hopes of a positive review. This type of sales person wants top salaries, company cars, perks, spiffs along with no quota’s or commissions.
Sam wrote the 100 quotes in the same one month period worth a total of $250,000.00 and then closed just seven deals worth $167,000.00. His deal close rate is just 7% but this also in not SALES, this is deals.
Sam’s close rate is $167,000.00 / $250,000.00 = 67% and Sam is a rock star sales person.
True sales professionals only want to talk in terms of accountability, since real accountability “defines” real sales performance. Sales professionals like Sam want top commission rates and hold their sales quotas in contempt as minimum standards, they want car allowances, spiffs and scotches as tokens along the road to their success. Yes, they will take your perks; however, they really are focused on managing their sales franchise to their (and thus your) maximum benefit.
The difference between Sally and Sam is the attitude. Sally complains to all who will listen to her about her poor lot in life, her bosses’ unrealistic demands or her thin bank account. Sally lives a negative and unbalanced life, working paycheck to paycheck. Meanwhile, Sam spends his time in self-improvement, learning about his customers and sharing his positive attitude; not by talking about it, but by demonstrating his positivity to all he comes into contact with. Sam lives a positive and meaningful life, paid for by selling value into his many professional relationships.