Demand Better

The sales manager, Bob, said to me in a gleeful voice, full of enthusiasm and hope: “We’re winning one out of every ten of our proposals, and we’re ecstatic.” I didn’t know how I was going to break the news to him that if this was the best they can do with their marketing program, they will never have more than an ‘also-ran’ business that earns a basic living for its founder, but never makes a significant mark in the marketplace.

Marketing Program Baseline of ExpectationsBut I asked him, “Why do you feel this way?”

“First of all it’s predictable. If I win one out of ten, I just have to propose enough business to keep the doors open and make a profit.”

The reasoning was not unsound; the expectation was too low. At this point I could see he really meant that going to bat and hitting one out of ten was a sign of success.

“But what if I tell you,” I said, “that good companies win 3, and great companies win 4-6 out of every 10 proposals. How would you feel?”

“Kind of crappy,” was his unvarnished response. “Tell me why I should expect more and how I can get there.”

This conversation took us down the road that explained average buying ratio of raw leads (45% were buyers), qualified leads (20-40% higher), and then proposals (30-59%). This was why he should expect more.

How to get there was more complicated. It had to do with customers’ expectations for proposal delivery, namely: immediate versus a 3-5 day delay, in-person versus over-the-phone and web, and quantity of sales leads coming in to support the back-end requirements.

To start, Bob had to project the number of sales and dollars that would result from the leads he gets. I told him there is a formula:

Baseline Formula

This number becomes the Baseline of Expectations. From this I explained that he can tackle:

  • Increasing the follow-up percentage by the salespeople and marketing
  • Increasing the market share percentage expectations by reviewing:

My advice to Bob was short and full of hope: Improve your expectations; decide where you fall short; and improve your closing ratio. Repeat.