In my first sales job, my boss ran me through the exercise every sales person has likely done at least once in their career. Taking out a pad of yellow notebook paper, he used his Monte Blanc pen (standard 1990s sales manager apparel), and wrote the following words down the left side of the page: Cold Calls, Demos, Sales, Gross Profit, Commission. We started at the bottom: “How much commission do you want to make each month?” I answered $2,500, thinking how proud I would be to tell my mom that I made $50k – including my $20k base salary - in one year.
My boss continues pounding his fingers on his calculator: “At 30% of gross profit, that means you have to sell $8,333 of GP. At an average of $1,500 GP per sale, let’s call it six sales per month to be safe. Since you’ll close about a third of your demos, you’ll have to do 18 demos per month. It typically takes 25 cold calls to schedule a demo, so you need to do 450 cold calls per month. Got it?” With those last two words, he tore the paper away from the pad and handed it to me. Man, I wish I kept that piece of paper. Then he threw his sage’s wisdom my way: “… and if you want to make real money someday, just increase the number of cold calls and let the math do the work.”
You know what? He was right. I was constantly racking my brain to figure out how I could do more cold calls. I spent three Sundays in a row perusing my territory to understand the roads and the density of the industrial parks or office buildings. My goal was to create routes that would maximize the number of cold calls I could do an hour. It worked … the more calls I did, the more money I made. The math was simple. However, that was 1995, and a whole lot has changed since 1995.
Today, a sales person can’t win new business simply by calling on more prospects. Potential customers don’t think they need sales people any more, so the only way they’ll consider working with you is if they view you as the expert … on their business. So, the number one factor in winning new business in 2019, and the rest of your career, is to know your prospect’s business. Not just security, IT, or AV – you need to know healthcare, property management, private schools, public schools, banking, small biz, etc.
How can you possibly learn about these businesses? You can’t, so you must choose a few markets. Master one, two, or maybe three markets. Become part of their community, attend their events, read their magazines, subscribe to their blogs, and most importantly … learn their business. Today, it’s better to make 50 tailored, prepared, and content-based contacts per month than making 500 random cold calls. The math doesn’t work as easily as it did twenty years ago, but I promise the rewards are much greater.
