Sales: A Numbers Game or A Game of Skill
- Dan Greenberg
- Feb 8, 2024
- 5 min read
Many traditional sales managers will push the message that sales is a numbers game. While there is some truth to that, and even low skilled sellers can have some success if the numbers are high enough, the sentiment is detrimental to the development of sales skill.
Sure, you need enough leads and opportunities to hit your goal. Most suspects don’t turn into prospects. Most prospects don’t turn into leads. Most leads don’t turn into opportunities. And, most opportunities don’t turn into deals. You need to have enough in your pipeline to make the math work. You also need enough in your pipeline that you are not worried about losing a deal. If you are too worried about one single deal, you will act needy, which will cause you to make bad decisions, and worse, if a buyer senses your neediness, they will run for the hills.
But once you have satisfied the basic numbers requirement, adequately filling your pipeline, and you have a process in place to maintain that pipeline and keep it full, sales becomes about skill. The difference between converting two percent of your leads into deals, and four percent of your leads into deals is 2X. That means two times more goal achievement and two times more commission. Finding an additional two percent is not easy, but it is very doable, and it takes skill and development. If you are focused on sales being a numbers game, then you are less likely to develop the skills needed to increase your win rate.
Your time is finite and valuable, while your quality improvements are force multipliers. If your pipeline has 200 leads in it, and you want to double your success, you will have to get to 400 leads if your focus is on numbers alone. That will mean doubling your time and effort. However, if you invest the resources and time now, and improve your sales skills, in the long run, you can learn to close 8 out of 200 leads instead of 4, and you will be spending a similar amount of time as before, but making twice as much money. I find it hard to imagine that if you can close 4 out of 200 deals, that you could not improve your skills and find 8 that can close.
The skills? Well, most of the articles that I post talk about those specific skills. Basically, they boil down to understanding needs, defining problems in your buyer’s terms, understanding how businesses work, speaking about outcomes and value in a challenging but productive way, controlling meetings, and writing and speaking in a simple and understandable manner. As you become more of a master in those skills, you should be able to sniff out, early in your process, that 100 of those 200 leads are not worth your time, which means two very important things. The first is obvious, don’t waste your time on those 100 that are not worth your time. The second is where we shift modes slightly…
The second is that you no longer have 200 leads in your pipeline, you now have only 100 leads. In addition to working the good 100, it is your job to fill up your pipeline and replace the bad 100. The easiest thing to do is to focus only on your current leads and deals, and forget to refill your pipeline. It is easy to do and easy to justify, but it is the worst thing you can do. As soon as your pipeline suffers, your deal making ability will suffer. You can improve every skill in your arsenal, and bring up your win ratio up, but if the pipeline isn’t there, the math won’t work.
If you have been paying attention, the article just shifted pretty significantly and this second half seems to contradict the first half. Afterall, if sales is about skill, and win rate, why should I focus on filling my pipeline? Sellers need to balance two truths in their mind quite often, just as many people need to do in life to be successful. There is a great line from the movie, The Secret Life of Walter Mitty. When challenged about a decision he made, Walter dryly responds “…it was a necessity and a mistake”. In other words, in life, we often have trade offs. Sometimes we have two bad options, but it’s usually better to take one than to be indecisive. Sometimes we have two things that need to be done, and although one may be less desirable and may even inhibit us in the short run, it still may be the right decision for the long run.
Organize your book of business like a business owner. Create processes and routines for yourself, and stick to the routines you build. If you don’t create routines, it will be easy to justify doing the things you want to do, while forgetting about the things you need to do.
The 80/20 rule is well documented and can be seen in many areas of business and life. Simply put, it explains that about 80 percent of the output often comes from about 20 percent of the input. In sales, this would mean that 80% of your revenue will come from 20% of your clients. It is not a hard and fast rule, and the exact numbers can vary, but it can be observed quite often. Jan-Benedict Steenkamp, a marketing professor at the University of North Carolina at Chapel Hill looked at numbers for sales and determined that in certain sales environments 20% of the customers account for about 60% of revenue. Regardless of the exact numbers, the fact is that identifying the customers that are the most likely to buy and the most likely to spend a lot is a major portion of your job. The key is not only understanding who to spend your time with, but also understanding who NOT to spend your time with, and how to build a repeatable, and actionable process for replacing them in your pipeline.
The takeaway is that sales is both a numbers game and a win-rate game. People who try to tell you that it is one or the other are oversimplifying it.
Win Rate:
Improve and develop your sales skills over time.
Spend the majority of your time with a small fraction of your book that is most likely to close.
Numbers:
Develop committed routines, and spend significant time consistently rebuilding your pipeline.
Ferociously weed out prospects that are least likely to spend so that you spend as little time as possible with them; and replace them with new leads.
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