Do you know your conversation-to-appointment ratio? Most sales managers don’t. Moreover, most sales managers probably couldn’t define the metric without some thought. Yet you can significantly impact your sales numbers by focusing on it, asserts Jeff Hardesty, president of JDH Group, a consulting organization that teaches outside sales reps how to communicate effectively with C-level executives.
“The conversation-to-appointment ratio, or the number of calls a sales rep must make to secure one appointment, is a key metric,” he says. “The national average is between 4 percent and 18 percent, which means sales reps are having up to 20 conversations to get just one or two appointments.”
The rate is so low because sales reps don’t know how to target and have business conversations with top-level executives, says Hardesty. They either talk to lower-level employees, who don’t have any decision-making authority, or they ramble to a decision-maker about how great their product or service is. Both approaches are bound to end in a lot of “no, thank you.”
Take the example of TDS Metrocomm, an Illinois-based local phone and Internet service provider. The company came to Hardesty with a 9 percent conversation-to-appointment ratio. Reps were spending 55 percent of their time each week to get just three new appointments per week per rep. But to meet the company’s revenue goals, reps needed six appointments per week. Realizing they couldn’t ask reps to double the amount of time spent on the phone, sales leaders opted to focus on the substance of the calls. In simple terms, they began following Hardesty’s four-step calling method:
Step #1: Understand the prospect’s internal business challenges parallel to your offering before you pick up the phone. Too often, says Hardesty, sales reps get someone on the phone and start talking about who they are, how long they’ve been in business, how great their customer service is, and so on. To boost your appointment ratio, you must first challenge yourself to understand the prospect’s internal business challenges and model those themes around your communication. “Scripts don’t work,” says Hardesty. “Conversations do.”
Step #2: Pick your playing field. A “top-down” approach – in other words, aiming for a top C-level executive with your calls – will improve all your numbers, including sales cycle, average deal size, etc. “Ninety-five percent of business-to-business outside reps settle for a subordinate level of contact that has no direct fiscal authority,” says Hardesty. Don’t settle; aim high.
Step #3: Speak in terms of business. When you’ve got a proven ROI over a period of time and you can communicate that ROI as it relates to the prospect’s specific business challenges, you’ll have the ear of your target audience. For instance, when Hardesty makes calls to VPs of sales, he tells them he has a proven system for lowering their turnover or ramping up their new hires to quota in a certain amount of time or whatever challenge he knows is faced by the industry on which he is calling. “I’m not coming in saying, ‘I teach people to prospect and I’ve been in business for 20 years.’ I address performance silos,” he says.
Step #4: Sell the 15-minute appointment. Face it: You’re not going to sell a 45-minute block of time to a C-level executive you’ve never met. So sell a “mini” appointment. After you’ve stated your business case and piqued their interest, ask for 15 minutes of their time. “Explain to them, ‘Here’s what happens in the 15 minutes, and when you go back to work here’s what I do, and here’s what I will bring back for you to evaluate.’ You’re taking the risk out of it,” says Hardesty.
It works. After TDS began taking this approach, its conversation-to-appointment ratio jumped from 9 percent to a steady 56 percent, which means they’re getting better than one appointment for every two calls. Furthermore, they’re spending 65 percent less time each week achieving their appointment goals. After one year of using Hardesty’s methods, sales revenue increased by 30 percent.
Keep in mind that each call should take no more than two to four minutes. If you’re talking for longer than four minutes you’re getting too detailed, which means you’re bogging down the executive with minutiae he doesn’t need in order to grant you 15 minutes of his time.
Need help tossing out your script and learning to have business conversations? Visit Hardesty at www.convertmoresales.com.