Selling is really like fishing (or hunting). Looking back at my sales performance from last year, here are the statistics I initially compiled:
- I opened around 25 accounts
- 15 of those clients ended getting active in the same year
- I made around 3500 calls to book 115 meetings
In other words:
- It takes 30 calls to book a meeting
- It takes 4.6 meetings to sign a customer
- For every 5 customers I sign, 3 will become active in first year
These statistics are priceless. They allow me to measure my own performance and to improve it over time. However, my first thought when looking at those numbers is simple: I need to make more calls if I want to increase my performance next year.
Then I started looking at the revenues and the picture got clearer: 78% of my revenues come from 3 customers only. In other words,
Roughly 80% of revenues are generated by 20% of customers
Put in a different way, I wasted 80% of my time, if not more, opening and begging to onboard customers that don’t end up making a lot of transactions with us, i.e. customer that do not perceive and choose to get value out of this relationship. The main problem I realize is that it’s a clear result of my plan for last year. In January last year, I decided to focus on number, using this old logic that sales is a numbers game. I got it wrong. It’s as if I had been buying the equipment and preparing to catch the smaller fish out there.
Going one step further in understanding last year’s results, I tried to list what was common to those premium customers:
- In our early stage of selling, they took the time to evaluate and compare our offfer
- Once they analyzed and took a decision, the onboarding process was easier that with smaller customers
- They still see value and help us in helping them getting the most out of our client/supplier relationship
This makes me realize that I didn’t waste only 80% of my time chasing smaller customer but more than that.
Focusing on bigger ones
I’ve made my sales plan for next year and the main idea is simple:
Focus of getting bigger fish and collect the small ones while at it.
It’s another to say I do not want to stop servicing low value customers but I will not chase them actively. I’ll focus of some of the similarities I found between my higher-value customers to identify customers that do not merit investing extra time in them.