Stephen Covey says that highly effective people put the “big rocks in first” because if you don’t do the important things first, they get crowded out by the smaller things.
The biggest rock for any sales professional is prospecting. It’s the #1 driver of success and the #1 thing that gets pushed to the bottom of the priority pile. Jeb Blount, the author of Fanatical Prospecting, famously said, “The #1 reason for an empty pipe is the failure to prospect!”
What’s The Annual Financial Impact?
What’s the annual impact of inconsistent prospecting? I think this is a worthy question for every sales professional, sales team leader, and company owner to consider.
To calculate the impact, let’s begin with some assumptions.
1. Calculate Your Average Net-New Revenue
First, what is the average amount of net-new business you are bringing in each month?
Do not count renewals from current customers. Only count new customers and new products, services, or solutions sold to current customers — things they have never purchased from you before.
Go back 6-12 months. Add it up and divide it by the number of months. That’s your average net-new revenue per month.
2. Total Up Your Prospecting Activity
Look back over your prospecting reports over that time horizon.
Your prospecting scorecard will be based on your strategic prospecting plan.
How many prospecting sequences did you launch?
How many calls did you make?
How many new connections on social?
Gut Check #1: Do You Have a Strategic Prospecting Plan?
At this point, you may have a knot in your gut. “I don’t have a strategic prospecting plan.”
Can I be your friend and coach for a second?
You need one. Without a plan, you will fail.
My guess is that if you don’t have a strategic prospecting plan for yourself, your team, or your company you are missing your net-new business goals month after month. It’s hurting your income. It’s devaluing your company. And, it’s crushing your morale. Gino Wickman, the author of Traction, insists that success in business requires documented processes. Prospecting is no different. If you want to build a strategic prospecting plan, get in touch and I’ll help you get started. YOU NEED THIS!
Gut Check #2: Do You Track Your Activity?
You may be swallowing hard because you have no idea how much prospecting activity you have done. Basically, you are not tracking the leading indicators to your income as a sales rep, sales team, or company.
You cannot manage what you do not measure.
Reluctance to measure prospecting activity basically means you have decided to make the #1 factor in your success unmanageable. Based on this, you probably feel insecure about your future. You may be directing this frustration to your company, yourself, and all kinds of external factors.
Guess what? The issue is you.
If you are a rep, hold yourself accountable to activity.
If you manage a team, insist on reports every day.
If you own a company, insist that your sales managers deliver leading indicators to you each week. Put it on your company scorecard and have your VP of Sales report on this data point at your weekly Level 10 meeting.
3. Determine Your Current Prospecting Level
If you’re still reading this, congratulations! Now, look at your prospecting level.
What percent of plan did you actually do?
Did you do 30% of your plan? 50%? 10%?
4. Determine How Much You’re Leaving On the Table
Take your net-new business average and divide it by this number. If your net-new business averaged $10,000 per month and your prospecting was at 25%, $10,000 divided by .25 is equal to $40,000.
At 100% of prospecting, you’d be doing $30,000 more a month. That’s $360,000 more a year – and $3,600,000 over the next 10 years.
That number is actually low because a large majority of these new customers will likely renew with you over the next 10 years. So, let’s say the impact is $10,000,000. What commission would you earn on $10,000,000 in net new business?
If you have a sales team or own a company, do this math across your entire organization. The numbers will likely be astounding.
What Will You Do?
So, what will you do? You can continue down your current path or you can make a decision to go through the pain of change. Here are some ideas:
1. Build a Strategic Prospecting Plan
You need a replicable strategy that is effective, efficient, and measurable.
2. Relentlessly Track Your Net-new Business
Renewals and upgrades are great, but true success comes from growing your base. Measure net-new. Reward net-new. Bonus net-new. (You can do this by tagging deals as net-new in your sales funnel. Then, when you pull your reporting, filter your pipeline by net-new only.)
3. Relentlessly Track Your Activity
If you get paid mileage, I bet you track every mile for your expense report. Take the same level of diligence in tracking your activity.
(The exciting thing? Many of the new prospecting platforms that reps can use measure metrics like number and topic of sequences launched, any prospecting calls made, and even how many appointments have been secured. There is no making up numbers or hiding poor prospecting efforts.)
4. Hold Yourself, Your Team, and Your Managers Accountable
Sales reps, find someone to hold you accountable. Managers, this is your job. Company owners, this is the leading indicator that goes on your scorecard.
A Final Word From K-19
In the classic Harrison Ford and Liam Neeson movie, K19: The Widowmaker, Ford assumes command of a powerful nuclear submarine. At the beginning of the voyage, he keeps pushing the crew to the max. Neeson is the second in command. He keeps pushing back on Ford saying that he is driving the men too hard and that he’ll alienate the crew. Finally, they do a deep dive, simulate a fire, and then come flying to the surface breaking through the polar ice cap. Everyone was pushed to the limits–and they all cheered. A team was formed.
You may feel like insisting on prospecting activity and accountability is too much. You may think it will destroy your team. However, imagine the celebration as you hand out commission checks. Imagine the morale boost when you sit down to the steak dinner at the end of the quarter or toast the winners of the President’s Club trip who hit their net-new quota to earn the trip. That’s cause to celebrate. It all begins with prospecting.