Prospecting - How Much is Enough? - High Output Training Systems, Howard Olsen’s Sales, Communications and Personal Growth Training Company

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Prospecting - How Much is Enough?

Do you want to exceed your sales targets?

Like it or not, your secret to success in selling begins with prospecting. At High Output Training Systems, we can teach you the greatest sales methodology in the world (and we do) but if you aren’t out selling, there is absolutely nothing we can do for you – except, of course, give you some advice on prospecting.

Selling is helping people you find, but it all starts with finding people to help. So when it comes to prospecting just how much is enough? Rather than me looking at how many prospects I may arbitrarily believe is reasonable for you, let’s use some simple mathematical extrapolation to arrive at a reasonable number you can generate for yourself. For this exercise we need to look at stages of development from suspect to customer.

To begin, we need to determine some metrics. The questions we need to ask are as follows:

What’s your NEW revenue target, or if working with a team what’s the target of each rep?
What’s the average revenue of each existing customer? (Total revenue divided by number of customers)
How many phone calls to leads (suspects) does it take to generate 1 appointment?
How many appointments does it take to generate 1 qualified prospect (Has a need, has the authority to buy, and has the money)
How many qualified prospects does it take generate 1 new customer?

Since I don’t know what your actual conversion ratios are, I’ll use some generic numbers to illustrate and you can plug in your own numbers later:

It takes 10 phone calls to get 1 new appointment.
It takes 10 appointments to generate 1 new active qualified lead or prospect.
It takes 10 active leads or prospects to generate 1 new client.

Using this information, it’s now a simple matter to generate real target numbers for your critical sales activities.
I don’t know what your revenue targets are, but let’s say that based on the new revenue target and the average revenue per customer we determine that you or each rep needs to produce 10 new clients this year - reasonable? Again, plug in your own numbers, but from here we can work backwards to determine activity:

Since it takes 10 active leads to get one client and we want 10 clients, we need 100 active leads.
Since it takes 10 appointments to get one new active lead and we want 100 active leads, we need 1000 appointments.
Since it takes 10 phone calls to suspects to get one appointment and we want 1000 appointments, we need to make 10,000 phone calls.

“Whoa! Slow down,” you say. “10,000 calls! How am I going to do that?” Well, the simple answer is discipline, applied one day at a time. So let’s break this down into daily activity:

10,000 calls divided by 260 working days per year = 38 prospecting calls per day.
Let’s conservatively assume 5 minutes per call. This number is high because included in the 38 calls per day are no pickups, prospect unavailable, voicemail etc., which take only 30 seconds each.
So, 38 calls times 5 minutes each = 190 minutes of prospecting every day. 190 minutes divided by 60 minutes per hour = 3 hours of prospecting per rep. In actual fact some calls will be short some will be long, so a strict discipline to a minimum 2 hours or 38 calls per day, and you should be OKAY.
1000 appointments divided by 260 working days per year = 4 appointments with active leads per day.

Let’s see now: 2 hours of prospecting and 4 appointments per day, these look like pretty realistic daily numbers to me. The question is: Do you and / or your team have the will to do it?

Pareto’s law or the 80/20 rule applies to just about everything and if you want to build a business, in the early stages you should probably spend 80% of your time working on generating new business and 20% of your time servicing it. If you commit to that your portfolio will grow. Once you’ve built your customer base, you can shift your activity to spending 80% of your time servicing and 20% prospecting.

As you and/or your team gets into the habit of achieving these targets, your proficiency will begin to increase and your conversion ratios from call to appointment will increase. As your conversion ratio from appointment to prospect increases and your conversion ratio from Prospect to Client also increases, these numbers become less daunting and the freedom that selling can provide will materialize.

Here’s a suggestion for you: Keep a phone log to keep track how many phone calls you make each day and how many appointments you get out of all those phone calls. Make two columns on a sheet. Every time you dial out just make a mark in one column. Every time you get an appointment put a mark in the second column. Keep track of this for a month, you will arrive at your true conversion ratios but you’ll also see your effectiveness increase.

One of the best books on the subject of prospecting that I ever read is: “Cold Calling Techniques that Really Work”, by Stephan Schiffman. I offer it off my website under our new section Recommended Reading feel free to check it out.
I’ll also be running a webinar called Painlessly Profitable Prospecting which will increase your telephone penetration rate. When you really want to get serious, enroll in our two day program The Three Truths of Selling or book us to train your team to increase your closing rate!