16 MARCH 2021 WorldWide Drilling Resource® The Lost Sales Paradox by Tim Connor Do you know what your lost sales are costing you every month? Every year? Let me give you two quick examples. It’s what I refer to as “The Lost Sales Paradox”. Example one: Your average sales are $1000 per order. You have five salespeople on your team, and their average close percentage is one out of three sales presentations. They see approximately 30 potential prospects every month. The results: Your average salesperson closes 10 sales a month for $10,000 in total revenue every month. So, your organization is closing 50 sales a month for $50,000 in revenue, but you are also losing 100 sales per month (the 2 out of 3 they don’t close) for a total of $100,000 - or around $1 million bucks a year in total lost sales. Example two: Your average sales are $5000 per order. You have 20 salespeople and their average closing percentage is 1 out of 3 prospect presentations. They each see 40 potential prospects each month. The results: Your average salesperson is closing 13 sales per month for $65,000 in revenue times 20 salespeople, so the total organization monthly revenue is a little under $1.5 million or around $15,600,000 per year, but you are also losing almost $3 million in monthly revenue or $31,200,000 per year. To summarize: Example one ~ Yearly sales revenue $600,000 ~ Lost sales revenue for the year is $1,200,000. Example two ~ Yearly sales revenue $18,000,000 ~ Lost sales revenue for the year is $30,000,000. Regardless of your organization’s products or services, the number of sales employees, your sales-generating model, your competition, or your market share, the above paradox generally applies. Why? First - Very few salespeople or organizations have a 100% new customer closing ratio. Second - Every organization, sooner or later, loses customers or clients for any number of reasons. Third - Every day the world is getting more competitive. Fourth - If you are not reinventing, staying ahead of the trends, and staying in touch with reality, it’s only a matter of time before you become a statistic. You need to invest a few thousand dollars in teaching your sales team, customer service employees, or other employees who interact with your customers the essential and/or creative communication, sales, and negotiation skills to ensure you don’t lose this revenue year after year because they lack the necessary skills or attitudes to perform with consistent, effective, and creative excellence. I get it - there are other important things you can invest in, or spend your money on, like more technology, nicer offices, or employee compensation. but if you add up the losses over the years, imagine what you could have done with that extra monthafter-month revenue! Yes, the sales process has evolved over the years due to technology. Yes, the world is becoming a global village. And yes, with social media, Internet buying patterns, and economic uncertainty, things are changing, but there are three things not changing. One - people buy from organizations and people they trust. Two - technology will never completely replace the human touch when it comes to major, critical, or significant purchases. Three - success will always involve a “blending” process - mixing the best strategies, approaches, and techniques from the past, present, and future. If your organization is losing more sales revenue than you are achieving (and you might be amazed at how many organizations don’t know these statistics when it comes to lost sales percentages or reasons), and when you are ready to get ahead of the curve when it comes to sales and marketing philosophy and performance-based approaches, what steps are you going to take? In His service, Tim Tim Connor may be contacted via e-mail to michele@worldwidedrillingresource.com BEWARE! All insurance policies ARE NOT created the same! Insurance for the Water Well Drilling Industry based on 27 years of INSURING Water Well Drillers! Our compe ve policies offer coverage for: jDown the Hole Loss jLoss of Income on Drill Rigs jProfessional Liability jPollu"on Liability jWorkers’ Compensa"on jInland Marine jCommercial Auto jUmbrella/Excess Liability jProperty jVoluntary Flow Breakout Containment LorriePartridge, AAI President Lorrie@ blackadar.com Chy LeClair Commercial Agent Chy@ blackadar.com Sissy L. Beery Vice President Sissy@ blackadar.com
RkJQdWJsaXNoZXIy NDk4Mzk=