The number one problem confronting sellers – and, therefore, one of the most critical challenges confronting sales management – is that sellers aim too low on the prospect’s organizational chart when they cold call. I call this pervasive problem, “selling below the power line.” My conclusion is based on the research results shown below.
The power line differentiates two key types of buyers.
Buyers who are “above the power line” may be described as those who
On the other hand, buyers who are “below the power line” may be described as those who
Let’s define what predictive metrics are before we dive into the one specific to “selling below the power line.” Predictive metrics are a special class of metrics because they enable sales management to pinpoint specific sales performance challenges today that will prevent achieving objectives tomorrow unless they are corrected.
Now let’s move on to the specific predictive metric designed to help organizations address this problem. We define an opportunity where the seller has gained access to buyers above the power line (and can be verified based on the criteria above) as an “A” opportunity. We define an opportunity where the seller is below the power line as a “B” opportunity. And, therefore, the key predictive metric is the number of “A” opportunities divided by the number of “B” opportunities – or, simply put, the A/B Ratio. It measures an individual seller’s skill to qualify buyers as being above or below the power line and, if below, the seller’s ability to successfully negotiate access to power. Importantly, as you move up the org chart of a sales operation, it becomes a key predictive metric to measure the effectiveness of the entire sales operation – from sellers, through managers, and right up to the sales executive.
We have researched this problem over the past 20 years with a number of clients around the world – most of whom had medium to large sales organizations. The table below provides a view of the initial state these clients were in along with the results they achieved as they addressed this problem.
Table 1: A/B Ratio Analysis
Referring to column 2, until managed effectively most salespeople start out at a rather deplorable ratio of 1/8. In other words, for every opportunity above the power line, sellers work on 8 below. And here’s a very sobering fact: We found that salespeople with an A/B Ratio of 1/8 literally waste 40 percent of their selling time – two days per week – selling to people who cannot buy. Think of the impact this has not only on individual salespeople, but the entire sales organization: long sales cycles, increased discounting, missed forecasts, imbalanced pipelines, and more!
However, if sales management follows the plan described below they can help their sellers achieve a 1/1 ratio after only one quarter. After two quarters they can achieve a 4/1 ratio. After only three quarters they can achieve an industry “Best in Class” steady state of approximately 6/1 (these numbers vary based on several parameters, such as maturity of product line, market share, etc.). Note too the significant increase in the effective use of their time.
How can the entire sales team achieve such results? The answer lies in three key integrated programs:
By following this integrated plan, an organization can achieve tremendous results – not just in an improved A/B Ratio, but many more wins, dramatically improved pipelines, and a huge impact on individual careers.
Bob Junke is founder and CEO of Adventace® and author of Create the High Performance Sales Environment®.
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