law-of-averages-sales

When starting a business, actually putting oneself out there and selling can seem a daunting prospect. Even more so perhaps, when the rejections start rolling in!

When you’re just starting out, those knock-backs can knock the wind out of your sails. You’ve come up with this brilliant idea or products that improve lives; you know you can help people; you’re sure they will love it if they’ll only take the time to meet with you… but they just keep saying no. It’s easy to feel defeated very quickly.

When I set up Pacific Direct, I would sit at a desk with a phone directory, calling hotel after hotel after hotel. Once I got to 100 calls, I would allow myself to get up for a tea break. I don’t mind telling you: it was sometimes relentless and soul destroying hard work. Sometimes I felt like giving up; it took months, and hundreds of calls, before I had my first actual purchase order in my hands.

I’ve written before about the importance of resilience in business; it is so important to just keep on getting back up, to keep making calls, reflecting on your pitch, hearing when the possible client takes on board something impactful you have said and need to repeat in your next pitch. If you cannot take rejection, lots of it, perhaps entrepreneurship is not the right thing for you. Keep score; keep rewarding yourself the small triumphs. For first meetings prepare well and learn as much as you can from customer feedback.

One thing that helped me through those first months of phone calls was the law of averages.

What is the law of averages? Put another way: if you throw enough mud at a wall, some of it will stick! Take a look at your call records for the last few weeks. Count how many calls you made, and of those how many people agreed to a follow-up meeting. For argument’s sake and simplicity, let’s say that you made 1000 calls in the last few weeks, and got 300 meetings. Out of those meetings, let’s say 100 converted into sales. (I’m using really simple numbers to keep this easy).

By using basic maths, you can now see that for every 10 calls you make, you will get 3 meetings, and for every 3 meetings you have one will convert into a sale. This figure may well improve as you go along and get better at selling your product, finding the right person to speak to and so on. Actually the longer you are in business it is also true to suggest that improvement comes your way as people start referring you, recomending your persistent polite determination, simply giving you a chance or a challenge.

Now you can approach your calls from a different perspective. Instead of it being a seemingly endless stream of abortive calls and polite no’s, it’s just one of the several negative responses you have to go through before you get to those 3 in 10 that will become meetings. If a call or a meeting doesn’t go well is just one more to tick off your list before you get to that 1 in 3 that converts.

Turning things around makes it less personal when people say no. Many people who do well in sales are so great at it because they have developed an approach to rejection that seemingly reframes their feelings about progress. A”no” is simply a benefit for understanding what might not work for the customer. Great sales people can clearly see the difference between a prospect saying no to a product or opportunity, and saying no to them as a person. Many people who struggle in sales do so because they struggle with taking knock-backs personally, and using the law of averages can help with that.

You might think this sounds too simple to be useful, but I urge you to give it a try. In fact, go one step further. Instead of making random phone calls as and when you feel like it, make a list of prospects to call at the beginning of your day. Staying with the conversion rates above, you know that you’ll get 3 meetings from 10 calls, so list the ten people you’re going to call and look at it with absolute belief that three of these people will agree to a meeting, and one will buy from you. Sit down and make your calls, one after the other, crossing them off as you go. Now a “no” is just one of that seven out of ten who you already knew wouldn’t convert; your meeting must be with one of the other nine on your list.

Try this out for a few weeks and see how you get on; you might find that thinking like this actually improves your conversion rate because you are less attached to the outcome and this makes you more relaxed.

Once you know your own personal ratio (it probably won’t be as simple as 3 in 10) you can use this to your advantage by setting yourself targets and goals based around it. If you want to book ten meetings this month, you know you’d better make 300 calls in order to get those meetings. If you want to get 5 new customer sales this month, you know you’ll need to make 500 calls. It becomes a simple numbers game which you can track to keep yourself feeling motivated and positive during the low times.

Keeping track of numbers is always useful. Even if you think you already have a pretty good grasp on how you’re doing with things, seeing it written down in black and white at the end of the week or month can be instructive in helping you to spot areas for improvement. Tracking and measuring helps to keep you focused and accountable throughout the days, weeks and months.

Written by Vicky Charles

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