Activity and the Numbers Game Part 2

In the previous post I discussed how staying active is important if you want to succeed in sales. I also mentioned that selling is a "numbers game" in that if you see enough people you will make some sales. But what are those numbers?

Generally speaking, the numbers for each industry vary. We can be pretty sure that the ratio of sales per prospect is different if you sell cars compared to selling vacuum cleaners door-to-door or real estate. Instead of going down that rabbit hole and doing the research for you, take the time to look into your own industry's numbers. 

If you are not sure where to find this information, there are a couple of sources you can use. An honest sales manager will be able to give you a reasonable guess if they have been in the business for a while. Or you can just check on the web by doing a search. And while you are searching for those sales ratios, look into your customer acquisition costs too. That will tell you how much you are spending to get a new customer. 

In my business, life insurance sales, the numbers are there already. An insurance agent named Al Grannum* studied the most successful agents he worked with over a 15 year period, looking at their sales numbers and breaking down their daily activity. He noticed how many phone calls were being made each morning, as well as appointments made, appointments kept, meals with clients, etc. He boiled it all down to the 10-3-1 ratio we use today.

Translated, he found that from 10 prospects, an agent could make 3 appointments and 1 would buy. Keep in mind that this was from information used when sales people actually made phone calls to find clients. I'm not saying you shouldn't "smile and dial", but there are other ways to pin down a client for an appointment. Using apps like Calendly and other web tools should be part of a holistic approach to finding prospects.

I like to set a goal and reverse engineer those numbers. If I want to sell 3 policies, then I have to find 30 prospects, and do all the activity that will go into making that goal. Instead of making 40 phone calls a day, like they used to do, I would need to make 120!

As a guy who likes to analyze numbers, my first concern is the drop from 10 prospects to 3 appointments. Where are the other 7? Why did they not want to make an appointment? Did they already have insurance or do they just not care?

By being able to squeeze one more paying customer out of those other seven prospects, one could double their income. Thinking out of the box, this could solve a lot of problems for the agent and the life insurance industry. 

Considering that a good life insurance company has a 17% retention rate of agents after three years (if they hire 100 new reps today, three years from now there will still be 17 of them), doubling their sales will encourage more to keep going. As a coworker once said, agents don't have to be fired because they quit way before that due to lack of sales.

Before you take a job selling a product, find out what the sales ratios are for that business. Tinker around with the numbers and see if you can find a way to improve them. Take into account when those numbers were developed, as these numbers from the 1950's may not be as relatable today.

I wish you much success and in the meantime please stay healthy!

*Grannum used his findings to develop the One Card System which is still used and has been adapted for the web instead of the clunky shoebox system that was used originally. Oddly enough, I was working with a company in 2006 that was still pushing those boxes onto the agents because they were too cheap to use the web version.

Chris Castanes is a professional speaker who helps sales people succeed through workshops and humorous presentations. He's also the author of "You're Going To Be Great At This!", a humorous look at sales. For booking information, click here. He's also the president of Surf Financial Brokers selling life and disability insurance in several states.