E=MC Sales
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August 25, 2011

We’ve all heard that sales is a numbers game.  This couldn’t be truer.  Your knowledge and abilities will change over time, and in order to remain consistent and successful sellers, we need to be focusing on the numbers that will add up to our desired results.  There are three main numbers we should be focused on:

Closing Ratio

The Closing ratio quantifies our ability to move accounts from prospect to customer and through our sales pipeline.  We derive our closing ratio by dividing the number of sales closed by the number of accounts we presented solutions to and multiplying by one hundred.  For example:

Number of Accounts Sold                            3
Number of Accounts Presented                  15

(3/15) x 100 = 20% Closing Ratio

New Opportunity to Presentation Ratio

The New Opportunity to Presentation Ratio demonstrates our capabilities of gathering information and generating enough interest in order to present valuable solutions to a prospect.  We can derive this ratio by dividing the number of accounts we present solutions to by the number of new opportunities added to the pipeline and multiplying by one hundred.  For example:

Number of Accounts Presented                 15
Number of New Opportunities                    30

(15/30) x 100 = 50% New Opportunity to Presentation Ratio

Prospecting to New Opportunity Ratio

The Prospecting to New Opportunity Ratio tells us how effectively we are moving new accounts into our sales pipeline.  Prospects are constantly moving out of the pipeline, so it’s important that we keep restocking with new ones.  We can derive this ratio by dividing the number of new opportunities added to the pipeline by the number of prospected accounts and multiplying by one hundred.  For example:

Number of New Opportunities                    30      
Number of Prospecting Calls                     300

(30/300) x 100 = 10% Prospecting to Appointment Ratio

Overall Pipeline Health

Our ability to successfully and consistently move accounts in and out of the pipeline will determine our ability to reach our goals.  Everyone is capable of being a successful seller, and success is as simple as figuring out exactly how many accounts we need moving through our pipeline based on the three ratios above.  For example:

If we want to close 1 account, and our Closing Ratio = 20%, then by working the math, we know that we need to be presenting to 5 accounts.  This is because we will close about 1 out of every 5 accounts we present to.

If we want to be presenting to 5 accounts, then by working the math, we know that we need to create 10 new opportunities, since our New Opportunity to Presentation Ratio = 50%.

If we want to create 10 new opportunities, then by applying our 10% Prospecting to New Opportunity Ratio, we know that we need to prospect about 100 accounts.

When we combine everything together, it looks like this:

100 Prospecting Calls > 10 New Opportunities > 5 Presentations > 1 New Sale

All of the above ratios are based on your individual skills in the field.  Take the time to determine you ratios and you will be able to determine your mathematical equation for success.  Sales is a numbers game, and success comes from finding and achieving our specific equation.

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