We provide sales training courses to EB and there are two questions we always ask at the beginning of our programmes.
1. How much money do you want to make?
2. Why should I buy from you?
You wouldn’t necessarily think so, but it’s the first question that causes more problems than the second.
Usually we can tease out of business owners and their sales teams why their business is special and then help them frame it into words that can be used on every single customer – we call them the compelling reasons. By the way – ‘cos we’re good, isn’t an acceptable answer to Q2.
No, it’s the answer to Q1 that causes heads to be scratched and brows to be furrowed.
How much do you want to earn? We ask. £40,000, comes the reply. Incorrect, we say. It’s £65,714.
These figures come from one of our customers for whom we deliver sales training. The sales people are all self employed and do both the selling and then the work. You can add in your own figures to find out how important sales training is for you.
If someone wants to earn £40,000 (before tax) here’s the calculation that has to be made:
• There’s a 60% profit margin in this business, so to get to the gross figure divide by 60 and multiply by 100: £66,667
• All these business people are VAT registered so multiply £66,667 by 1.15 (15%) to give you £76,668 – the amount of incoming cash that’s needed
With me so far? Good.
Now you have this figure (or whatever yours is) you can use it in many ways, but mostly to act as a motivator. Here’s how.
• For this business the average income per job is £250. So divide £76,668 by £250 and you get 307. That’s the number of jobs (at average rates) that need to be completed to earn £40,000
Then it gets really interesting… or scary, whichever way you want to look at it.
• In this business 66% of all appointments with potential customers convert into actual jobs. So, multiply 307 by 100 and divide by 66. It comes to 466. That’s the number of appointments needed to earn £40k
• We also know that 90% of all inbound marketing calls convert to an appointment. That’s 466 multiplied by 100 and divided by 90. It comes to 518 – the number of inbound calls needed every year
In case you’re wondering that’s 42 calls a month or 11 a week, assuming four weeks holidays.
Did you do the calculations for your business?
Great! So, what?
Well, you now have a question to answer: how are you going to get 12 calls a week and how are you going to make sure enough of them buy from you? It takes knowledge and skill – the sales won’t just happen.
That’s why sales training is so important.