Do you know your conversation-to-appointment ratio? Most sales managers don’t. Moreover, most sales managers probably couldn’t define the metric without some thought. Yet you can significantly impact your sales numbers by focusing on it, asserts Jeff Hardesty, president of JDH Group, a consulting organization that teaches outside sales reps how to communicate effectively with C-level executives.
“The conversation-to-appointment ratio, or the number of calls a sales rep must make to secure one appointment, is a key metric,” he says. “The national average is between 4 percent and 18 percent, which means sales reps are having up to 20 conversations to get just one or two appointments.”
The rate is so low because sales reps don’t know how to target and have
business conversations with top-level executives, says Hardesty. They
either talk to lower-level employees, who don’t have any
decision-making authority, or they ramble to a decision-maker about how
great their product or service is. Both approaches are bound to end in
a lot of “no, thank you.”Take the example of TDS Metrocom, an
Illinois-based local phone and Internet service provider. The company
came to Hardesty with a 9 percent conversation-to-appointment ratio.
Reps were spending 55 percent of their time each week to get just three
new appointments per week per rep. But to meet the company’s revenue
goals, reps needed six appointments per week. Realizing they couldn’t
ask reps to double the amount of time spent on the phone, sales leaders
opted to focus on the substance of the calls. In simple terms, they
began following Hardesty’s four-step calling method:
Step #1: Understand the prospect’s internal business challenges
parallel to your offering before you pick up the phone. Too often, says
Hardesty, sales reps get someone on the phone and start talking about
who they are, how long they’ve been in business, how great their
customer service is, and so on. To boost your appointment ratio, you
must first challenge yourself to understand the prospect’s internal
business challenges and model those themes around your communication.
“Scripts don’t work,” says Hardesty. “Conversations do.”
Step #2: Pick your playing field. A “top-down” approach – in
other words, aiming for a top C-level executive with your calls – will
improve all your numbers, including sales cycle, average deal size,
etc. “Ninety-five percent of business-to-business outside reps settle
for a subordinate level of contact that has no direct fiscal
authority,” says Hardesty. Don’t settle; aim high.
Step #3: Speak in terms of business. When you’ve got a proven
ROI over a period of time and you can communicate that ROI as it
relates to the prospect’s specific business challenges, you’ll have the
ear of your target audience. For instance, when Hardesty makes calls to
VPs of sales, he tells them he has a proven system for lowering their
turnover or ramping up their new hires to quota in a certain amount of
time or whatever challenge he knows is faced by the industry on which
he is calling. “I’m not coming in saying, ‘I teach people to prospect
and I’ve been in business for 20 years.’ I address performance silos,”
he says.
Step #4: Sell the 15-minute appointment. Face it: You’re not
going to sell a 45-minute block of time to a C-level executive you’ve
never met. So sell a “mini” appointment. After you’ve stated your
business case and piqued their interest, ask for 15 minutes of their
time. “Explain to them, ‘Here’s what happens in the 15 minutes, and
when you go back to work here’s what I do, and here’s what I will bring
back for you to evaluate.’ You’re taking the risk out of it,” says
Hardesty.
It works. After TDS began taking this approach, its
conversation-to-appointment ratio jumped from 9 percent to a steady 56
percent, which means they’re getting better than one appointment for
every two calls. Furthermore, they’re spending 65 percent less time
each week achieving their appointment goals. After one year of using
Hardesty’s methods, sales revenue increased by 30 percent.
Keep in mind that each call should take no more than two to four
minutes. If you’re talking for longer than four minutes you’re getting
too detailed, which means you’re bogging down the executive with
minutiae he doesn’t need in order to grant you 15 minutes of his time.
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