Although a sales team includes many different job titles, such as sales engineer, SDS, customer success, and sales admin, when it comes down to salespeople themselves, no matter if they are inside or outside sales, in my opinion, there are really only two major roles: the hunter, and the farmer. These are the two basic functions a sales manager should focus on.
The farmer type of salesperson is the one who nurtures a lead and a sale along, growing them, qualifying them, and finally moving them up the sales process. A hunter, though, specializes in going out (literally or figuratively) and bringing in new business. You as a sales manager should see that they have all they need.
Going back half a century or so, it was really only possible for the hunter prospect in person. In fact, we can go back for thousands of years and find the same thing.
The change began with the telephone, which became more significant throughout the 20th century. At the same time, sales letters and prospecting through the mail evolved. It wasn’t until 1995 that the internet really began taking hold, and it still took a decade or so to become pervasive and useful.
A hunter, or for that matter any salesperson, needs to become competent at what they do. I happen to disagree with many of my colleagues, however, who have placed a huge amount of pressure on salespeople throughout the years and have divided them up in categories such as mediocre, bad, good…and then the superstars. And it’s only the superstars that are greatly admired.
The truth is that we should change that mindset. Instead, we should look at sales as we should with any profession, that the “best” are those who are relentless and unstoppable in their quest to get better.
Sure, there are the champions. My personal sport is swimming. When I was young, the swimming superstar was Olympic gold medalist Mark Spitz. Recently we had Michael Phelps, who outdid Spitz in terms of medals won, and retired because he had won more medals than 161 countries. He’s now considered the greatest swimmer of all time.
Not every person can become such a champion. The reality is, there are millions of swimmers. Are they “bad”? No! So we have to stop shoving this emotional button of “push push push and be the greatest.” We have to go to the mind, where we can say, “Work smarter.” That doesn’t mean that a salesperson shouldn’t work hard, but let’s knock off this screaming and yelling of, “You haven’t made enough calls! Look at this!” This just burns people out, and that’s why you see so many older salespeople who have just burned out after a while.
What do I look for in a salesperson? Consistency. If you create consistency in your team, you’ll have a much better-performing group than if you are constantly pushing this “make more calls!” button, and trying to shove them into being “champions.” Sure, people do have to pick up the phone and get presentations, but there’s a difference.
Consistency as a Hunter
When I speak about the actions a hunter should be taking, I’m not trying to spell out generally everything they should do. There’s plenty of material out there about that. We’re limiting it to what is possible with Pipeliner CRM, which is considerable in itself.
To be consistently good as a hunter, it is tremendously important to create their pipeline, to fill it up with potential deals. If the salesperson wants to be consistently good, they must understand the numbers they need to reach their target. This is also the way not to be deluded into thinking they’re making your target when they’re not—follow the numbers.
Sales is always governed by numbers. The formula for success is simple mathematics. It is what you put into the pipeline. That means the quantity of leads, and then quality. You only get out of your pipeline what you put into it. And Pipeliner CRM provides multiple features for hunters, so that what they put into the pipeline really counts.
With our web clipper feature, you can grab data from any website, such as LinkedIn, and import it immediately into your database. Our business card scanner, available in our mobile CRM, is another way that data can be immediately imported.
As you gather data, our Automatizer feature makes it possible to create automatic processes for contacting leads, because at this point they are cold. Automatizer makes it possible to automate just about any function that would normally be performed repetitively and routinely, such as cascading emails. Slowly warming up leads is important, because otherwise the leads that make their way up the sales process will not be qualified.
Down to the Numbers
As a hunter, you need to understand the number of quality leads that are needed to turn into opportunities. This will be different for every company, as every company will have its own ratio for leads into opportunities, and opportunities into closed deals.
You can work this backward to figure it all out. First, you should start with your average deal size. You will know your average deal size from lagging indicators, so let’s say that the average deal is $6,500. Your monthly quota is $50,000. By dividing $50,000 by $6,500, you find that you need 7.69 deals, or, to make it practical, 8 deals.
Then take a look at how long this average $6,500 deal remains in your pipeline. We’ll say for our example that it’s 20 days, which is a business month (there are usually about 20 working days in a month).
Now, how many opportunities convert to closed deals? Let’s say your closing ratio is 30 percent. If you’re going to close 8 deals to make your quota, and you routinely close 30 percent of them, then you’ll need around 25 deals in the pipeline. In value, that would be around $162,000 (25 times $6,500). 30 percent of $162,000 would be $49,985, which brings you close to your $50,000 quota.
Note that this won’t exactly work out, because not every single opportunity will be $6,500, as the exact deals sizes vary. Some will be larger, and some will be smaller. But $6,500 is the average, and using that will help you figure it out.
The other ratio you must understand is your lead conversion ratio. How many leads convert into opportunities? How many raw leads would you need—people contacted, leads obtained, paid leads purchased, etc.—so that you end up with 25 opportunities in your system? It’s usually a smaller ratio than the closing ratio. In some industries, it’s 3 percent, and in others, it’s 20 percent. If your lead conversion ratio is 20 percent, you’d need 125 raw leads to come in to end up with 25 leads that will convert.
You can break this down to how many leads per day you can generate, real leads that will qualify. I believe this should be a realistic figure based on 5 days per week—not, as some write, that salespeople should be prospecting constantly, all the time, cold calling, networking, knocking on doors, taking little to no time off. That’s the way to burn out. So with our technology, we want to create a realistic, consistent approach.
So we said 125 leads per month into the pipeline are needed. When you have 20 working days in a month, 5 days per week, that would come out to a little more than 6 leads per day. Can you generate 6 leads per day? Yes, you can! With Pipeliner CRM, we provide you the technology to easily accomplish this: the web clipper, the automatizer, and our mobile technology with business card scanner. We also connect up through APIs to many other tools that can be used, too.
Once again, it’s a matter of working backward to figure out the numbers. To summate, you need to figure out:
- Your monthly quota
- Average deal size
- Average time it takes a deal to close
- Average closing ratio for deals
- Number of opportunities needed in the pipeline to support the closing ratio
- Conversion rate of lead to opportunity
- Number of raw leads needed to support that conversion rate
Note, once again, that this is figuring backward.
If you have no lagging indicators because you are just starting out, you would then turn these numbers around:
- How many raw leads can you obtain?
- What should your conversion rate of leads to opportunities be?
- How many opportunities can you get into the pipeline?
- What should your closing ratio for deals be?
- How long should it take a deal to close?
- What should your average deal size be?
- Based on these numbers, you can estimate and set your monthly quota.
Understand these numbers right from the beginning, and your hunters will be able to make their quota.