By The Numbers - Closing Ratios Pt 2

By The Numbers - Closing Ratios

Yesterday, here at By The Numbers, we talked about Scott. Today it's Pablo's turn.

As you can see, Pablo had 100 leads and closed 38. That's a 38% closing ratio. In our case, we wanted a minimum of 33% closing, so he's doing fine there. However, we're not stopping there. We need to look at what it's costing us to get those sales.

Look a little more to the right. You'll see that it cost us $13,668.31 to get $243,335.83 in sales. That means 5.62% off the top of each contract is going directly to marketing. In this case, that is just fine because we have budgeted for our marketing to be up to 7%. Pablo is doing just fine so far.

In fact, just a side note...if you look again you'll see that it costs about as much for Pablo to get $243,335 in sales as it does for Scott to get $73,525 in sales. Yikes! Better do something about that. Either give Scott some cheaper leads or no leads. Have him hit the trail.

Are we in the clear with Pablo yet? Not quite. We still need to see if his jobs are profitable. Stay tuned!

By The Numbers - Closing Ratios

By The Numbers-Closing Ratios

When looking at sales rep closing ratios, it is not enough to simply look at how many leads they are closing. You have to also look at the cost of those leads and the size of the contracts.

In this picture you see Scott and Pablo. Scott was assigned 79 leads and closed 12. His closing ratio is only 15.9%. That doesn't look good already, but then to add insult to injury for the business owner, it cost $12,940.58 to get those sales of $73,525.83. That means that the company owner is paying 17.6% off the top of each of Scott's contracts in order to get a job.

In this case, the marketing should have been around 5% in order to stay within the right profit margins. Scott is not making money for the company already before he has a signature on the contract at at the rate he's selling. Of course, if he'd increase his closing ratio those costs might go down, depending on the cost of leads and contract sizes.

I'll explain Pablo tomorrow. In the meanwhile, go to either www.bythenumbersroofing.com or www.getbythenumbers.com for a further explanation of what should be looked for in closing ratio reports.

By The Numbers - Whose Fault Is It When Your Marketing Does Not Work?

We here at By The Numbers are always looking for good marketing articles and advice to share with our friends and customers.

Following is an article I received from Rich Harshaw at Monopolize Your Marketplace. It is a list of the ten things you might wrongly blame for your marketing that does not work.

CLICK HERE TO READ ARTICLE.

By The Numbers - Tracking for Forecasting

Recently I had an interesting experience that gave me an increased understanding of tracking first hand!

I work with a certain company's sales team on setting and reaching goals. Each one had determined for his/her own self the dollars in sales they intended to make for 2011. In my mind, I knew what should be true according to the law of averages and truth in numbers, but now it was time to show it to some doubting Thomases as to how it really works.

Here's what I did: I ran historical reports showing how many leads turned to how many sales which in turn created how many dollars for each individual. Then I just flipped it forward and said, ok so-and-so has to have so many qualified leads per day in order to make the goal. That is, if he/she keeps the average contract size the same as the previous year or two, the projected outcome should be close to target. If the contract size increases, obviously the number of sales can decrease...but we were just following and projecting on law of averages.

After a few weeks I brought the goals with me to a sales meeting along with the leads and sales reports for each person. In every case, the number of leads and sales was directly proportionate to what had been projected! For the person who doubled his leads required, he doubled his sales. For the ones who slacked on soliciting leads, their sales were lacking in direct proportion to the number of leads they had.

It was truth on paper. I had to say nothing more. WINNERS KNOW THEIR NUMBERS!

How can you know unless you track?

Susan