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Originally Posted by luka.
I've done some basic calculations lately on my time spent and was wondering if anyone has ever considered their Return on Investment in terms of time.
I sell to small businesses and my commissions per sale average $1500/ea
I close 12% of my appointments and see approx 8 new contacts per week. I work about 50 hours.
In that time I:
- cold call
- drive to see new contacts
- make presentations.
Would you say then:
- I invest 6.25 hours per week in each new contact.
- I close 12% of a potential ($1500 times 8 appointments=$16000) per week which makes $1440 per week.
- Each appointment is worth $1440/8 = $180
- Each hour is worth $180/6.25 = $28.80
How would you say these figures vary for a sales person earning $200,000 per year or more
Higher commission potential per week?
Higher close ratio?
More hours worked.
More appointments (using a limited resource - time)
Seems that:
Weekly Income = "Salesperson Closing Ratio" * "Average Possible Commission" * "Appointments per week"
I'm new to sales but you would think that it's easier to market/sell to customers that would offer double the return if closed, rather than DOUBLE your close ratio to say 24%
By the way, for those interested - here are my stats in 4 weeks (trimmed for privacy):
http://img134.imageshack.us/img134/7410/saleszo1.jpg
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I applaud your analysis. The numbers you mention will continue to give you a clear indication of how you are performing.
It's very difficult to compare numbers like these from your industry to numbers in another industry. There are just so many variables.
If you want to increase your income, you figure out which of the following (or combination of the following) will help get to your goal:
1. Increase your closing percentage. I had a 82% closing percentage in an industry where average performers sold 40-50% and good performers closed 60%. It makes a huge difference and is worth developing your sales skills to achieve an increase like this.
2. Increase your average sale. Sell more to each customer that buys from you. Or, choose to spend your time with customers that will spend more, and give the lower volume customers to someone else if you're lucky enough to have enough prospects to be able to do this.
3. Get more opportunities. This depends upon your resources such as time and budget. At some point, it may pay to have an assistant doing some of your work while you spend your time closing deals. Referrals will have a positive impact on this number, too. Cold calling, marketing, promotions can all have an effect on this metric.
4. Increase repeat business i(f it's possible in your industry with your product).
5. Increase profitability of your sales. I'm not sure how you get paid, but make sure the margin in your deals is sufficient to give you the income you desire.
Do those five things and you'll be maximizing your revenue and your commissions. That's really all there is to it! (but of course, none of it is easy).
Skip Anderson
