Moneyball for New Sales Revenue
If you’re in sales and you haven’t seen the movie Moneyball, please make time to do so. It’s not only a great movie, but a real-life example of how data and analytics can drive decisions in any industry. The story revolves around how General Manager for the Oakland A’s baseball team, Billy Bean, strategically figured out a way to replace his three best players with no money. These tactics now being used in NBA and NFL on how General managers are deciding on building their teams
My background is in Sales Leadership, and lately I’ve been thinking a lot about how I can best utilize data and analytics for a sales team. If hitting quota really is an equation, then the analytics should show whether you’re going to hit it month after month, as well as for the year.
So listen up all you sales reps and managers: You should be able to figure out your numbers easily. To become an expert on this topic you can read a book called Predictable Revenue, by Aaron Ross. He gives detailed and somewhat complicated steps on how to achieve your target numbers and revenue. However, I have simplified it for you below.
Step 1- Targeted Accounts
Make sure the sales team is going after the right accounts. If you don’t know what those accounts are, then the first step is figuring it out.
Here is an example:
Working with a display advertising company, we categorized certain metrics from our top 30 spending accounts, then figured out what similarities really mattered, as well as the red flag accounts to avoid. We looked carefully at the monthly unique visitors to the website, what type of products they sold, and what type of advertising they were currently doing. We categorized them on a scale of 1 to 5 and our SDR’s would be paid accordingly when a meeting was completed. Your target accounts are probably different but you want to figure out similarities from your top spending accounts and then target only accounts that fit into those categories.
Step 2 – Touch Points
How many touch points is it taking each sales rep to book a meeting? A common mistake companies tend to make is creating sales goals for number of calls or number of emails per day. Although this may make sense initially in the first and second months, in order to figure out a sales rep’s numbers, this should not be the overall focus. Some reps are better on the phone and others are better with email. The most important focus should be on figuring out the metrics for each sales rep.
Here is an example:
Our highest performing sales reps made approximately 70 touch points to book one meeting (they had the best strategy and personalization). Our lowest performing sales reps ranged from 200 to 350 touchpoints (they used a more spray and pray strategy). The most important focus is to figure out individual and team averages and then manage activity accordingly (tell us how). One of my favorite quotes is from Urban Meyer’s book on Leadership called, Above the Line.
“In the old days when something wasn’t going right I would get furious, now I get curious”.
When the number of set meetings starts to decline, there is usually a reason for it. It is usually directly related to a sales rep’s activity. It is a very easy conversation to have with your sales rep when you have the data to back it up.
Step 3 – Qualified Meetings
How many qualified meetings are being completed in a month? This is pretty self-explanatory, however, you may want to look at the position of the person the meeting has been booked with. Is it a Director or above? You may want to consider paying your sales reps more if they book with the actual decision maker.
Step 4 – Closing Deals
How many deals are being closed in a month? What is each sales rep’s closing percentage? What is the company’s closing percentage? Every organization should know this information and then work on ways to improve it by 15% and eventually 20%, etc. A lot of this goes back to targeted accounts.
My experience working with a company that sold display advertising I learned if a company was only working with Google, Facebook and Criteo (all are click based attribution companies), I knew my closing percentage would be very low. So, I paid each sales rep less for meetings with these companies. I didn’t want to encourage sales reps to call on these types of accounts. I wanted a higher closing percentage.
Below are a couple of clips from the movie talking about how they rolled it out and formulas they used to pick players.
WHAT’S YOUR MATH?
I think a lot of people are intimidated by math because they weren’t “good” at it in school. Personally, I was horrible at math. What I have below are very simple and basic formulas you can easily incorporate into your daily activity.
Sales Reps/SDR’s – How many touch points does it take to book a meeting? (How can I improve? Strategy, personalization, increase the number of calls or emails, etc.). There are all sorts of things that you can track here. I would start with calls, emails, LinkedIn messages, new accounts added, meetings booked and meetings completed. Once you begin keeping track of the numbers month to month, you begin seeing patterns and then you can begin to KNOW when set meetings will happen. Work smarter by knowing when the meetings are going to be coming in instead of refreshing your email praying for a response.
A book I highly recommend is, “Fanatical Prospecting”, by Jeb Blount. I even hired Sales Gravy, Jeb’s Company, to come into our office and do an entire presentation to our sales team. It was highly beneficial.
Sales Reps – How many meetings am I completing in a month and what is my close percentage? How much is my average sale? It is crucial that a sales rep knows how to increase their closing percentage and how to target bigger and better accounts. Going back and listening to calls is one of the best ways to improve. You have an opportunity to listen to yourself to figure out what the actual objection(s) were and how to overcome them when they come up in future calls. Asking a Manager to constructively critique your calls can also help you improve. Most of the time, if I had a sales rep who was in a slump, a few key improvements helped get them back on track. Everything can be improved and corrected with the proper coaching.
Books I recommend for Sales Reps: “Pitch Anything” by Oren Klaff, “Sales EQ” by Jeb Blount, “The Closers Survival Guide” by Grant Cardone.
Sales Managers – All you are doing is combining the above data. How many touch points to get a meeting booked, how many meetings completed, close%- how many deals closed and average deal size or average revenue for new accounts. Once you have some historical data from your team your job becomes easy. It really comes down to coaching and training your team to get better and the numbers will make it easy to hold your team accountable to their results.
Books I recommend for Sales Managers: “New Sales Simplified” By Mike Weinberg and “Predictable Revenue” by Aaron Ross and Marylou Tyler.
I know this is an easy way for you to be able to predict your sales and your sales team numbers to your senior leaders or CEO. Numbers don’t lie. When you can show them the good, the bad, and how you plan to make up the difference in your learnings, they will appreciate the honesty and hard work you put into figuring out the data.