Are You Too Successful?
By Richard Fenton and Andrea Waltz
It’s the last day of the month and Sheila Johnson is sitting at her
computer, filling out the performance recap required from every
salesperson in her company. And after typing in the final numbers,
she’s all smiles – after all, she’s just calculated her “closure
rate” which has come in at an impressive 68 percent! But as she hits
the “send” button, little does Sheila realize that her high closing
rate should be setting off alarm bells because, in reality, it is
actually too high.
You may be wondering: How can your closing percentage be too
high? How could a high number ever be a bad thing? The answer is
simple: When your success rate is so high, it indicates that
the bulk of your precious selling time has been spent going after
small deals … easy successes … no challenges.
This, of course, is counter-intuitive, going against common sales
logic. Ask almost anyone in sales the key to success, and they will
usually tell you it’s to close a greater percentage of the calls you
make. And while this logic is hard to argue with, it can be done!
Closing “Percentage” vs. Sales “Volume”: There’s a world of
difference between the amount of sales you generate – volume
– and the ratio of calls to closed deals – percentages. Generally
speaking, the former (the amount of sales you generate every week or
month) should be increasing as you spend time in the job; the result
of having gained product knowledge, honing your presentation skills
and repeat customers. But contrary to what you’ve probably been
taught, there comes a moment when your closing percentage should
not be climbing with it.
The reason for this can be summed up in two words: “Jerry McGuire.”
Remember the classic scene in “Jerry McGuire” when Jerry (played by
Tom Cruise) is on the phone in his office, trying to convince his
one and only client, football player Rod Tidwell (played by Cuba
Gooding Jr.) to stay with him? And then Rod Tidwell asks Jerry to
literally scream a variety of random, ridiculous, humiliating things
into the phone. But, at the end, there is just one phrase that Rod
wants to hear: “Show me the money!”
And therein lies the problem with closing percentages; they aren’t
money, they’re statistics. And in the final analysis – when
the month is complete – you don’t take your statistics to the bank!
But there’s a bigger problem here: Not only do percentages lack
value, other than for purposes of analysis, but the analysis is
flawed; they’re not only worthless, they’re destructive.
Contrary to the reverence paid to sales representatives by
well-meaning sales managers everywhere, not only are percentages
simply internal statistics that have no real value, these same
managers always want the number to be increasing, or at least above
a certain level. Rarely do they watch for closing ratios that are
too high. But if you’re like Sheila (and many other seasoned sales
professionals with closure rates of 50 percent or more), the
percentage of deals you’re closing should serve as an indicator that
something is askew … that your success rate is simply too high and
might need to be intentionally lowered.
School vs. Sales: As kids in school, when we took a test,
most of us expected to get most of the answers right, with scores of
80-90 percent being commonplace. A perfect score of 100 percent was
a possibility for anyone who applied themselves. In fact, even when
we flunked a test we usually got half of the answers right. And
therein lay the difference between school and the real world. In
school a 50 percent success rate is failing, but in the real world a
50 percent success rate is outstanding!
Consider a baseball player who has hit .500 for an entire season –
in other words, one hit for every two times at bat (a 50 percent
success rate). Success of this nature is virtually unheard of; after
all, no one has averaged over .400 in major league baseball season
in almost 50 years. In fact, in major league baseball, career .300
hitters usually go to the hall of fame.
The same holds true in the world of selling. In virtually any
industry you can name a 30 percent closure rate makes you a
superstar! For example, most insurance salespeople (including those
who earn well in excess of $100,000 per year) often produce only
three sales for every ten calls they make.
Getting Into a Bigger Game: So, what should you do if your
success rate is too high, perhaps 50 percent or even better? Maybe
it’s time to get in a bigger game. Maybe it’s time to call on
bigger accounts. Maybe rather than taking the quick, “yes”– while it
may drive your closing percentage – will do very little to drive
sales volume! Maybe you should focus on offering more elaborate
packages with more value-added and deluxe options. Maybe it’s time
to move from the minors to the majors.
As the saying goes, “Easy yeses produce little successes.”
It’s time to start challenging yourself by shooting for the moon
more often! You might see an amazing thing happen; your closing
percent goes down, yet your sales volume soar!
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