Find Out How Much You Need to Work to Achieve Your Sales Goals
The New Year is well under way and now is the time to plan your sales goals for the year, but before you put a number on paper, you need to figure out how much you have to work in order to reach those goals. The first step is to know your closing ratio; and I don’t mean an estimate. Look back at the last 6-12 months and divide the number of signed contracts by the total number of times you delivered an estimate. For example, if you delivered 950 estimates and closed 100 jobs, your closing ratio will be 10.5%.
But let’s start with how many days you can devote to work:
Even though we start with 365 days a year, there are many days lost. Subtract 104 weekend days, 10 holidays, 10 vacation days, 52 office days (one per week, depending on your system), and 12 meeting days (this can vary and be done during office days). After all these deductions, you are left with 177 days in the field that you can count on for actual sales.
Now, tie in your performance with the number of field days you have. This is where most numbers will vary per person, so you have to input your unique number and figure it out.
Let’s assume this year you want to make $100,000, that your average job size is $12,000, and that your commission is a typical 5%, which equates to an average of $600 per job. This means that if you divide $100,000 by $600, the number of jobs you have to sell is 166.
This is how it all starts to come together! Let’s assume that your closing ratio is 30%, which means that for every 100 estimates you deliver, you sign 30 contracts. If you need to sell 166 jobs at a 30% closing ratio, you have to deliver about 554 estimates.
Finally, if you divide the number of estimates you need to deliver (554) by the number of days that you have to work (177), you end up needing to deliver at least three estimates every working day.
Now, these numbers will vary tremendously from person to person, but if you are honest with yourself and REALLY figure your closing ratio accurately, you can have a clear picture of how every day should be spent. When you figure out your closing ratio, it is important that you separate cold leads from referrals. Referrals logically have a higher closing ratio.
I have had the privilege of working with hundreds of sales people over the years, and the most successful know their closing ratio verbatim. To the others, I say that you are navigating without a compass! Take control of your days and get it done! Here is a thought:
If you know you need three estimates, or whatever number you figure for yourself, work hard to get one or two more. This creates opportunities in excess of your needs and that is sales power!
Coming soon, GAF will offer Service Pro Finder, a tool to help contractors design campaigns and generate leads. Sign-up information will be available soon to get in on this new program when it launches in the next few months.