Calculating Your Sales Activities

Businessman talking in meeting
••• Image Source RF/Cadalpe/Image Source

One of the toughest aspects of being a salesperson is the uncertainty factor. It's always possible to have a bad month or even several bad months in a row, which can put any salesperson in real financial difficulties. The good news is that you can lessen the odds of a long losing streak by knowing exactly which sales activities to pursue and how often to pursue them.

Sales Metrics

To know which activities will yield best for you based on your current situation, you'll need to keep track of your sales metrics on a regular basis. Keep a cold call tracking sheet and fill it out each time you make calls – this will help you to figure out your call percentages. Specifically, you can track the number of dials it takes on average to yield one appointment. This number will change from day to day depending on your mood, your approach, and sheer luck (good or bad). So if you track this number over time, you'll have a much more accurate idea of your real average.

Appointment Percentage

You'll also need to keep track of the next important percentage in sales – the percentage of appointments that you manage to close. Again, you should look back at your activities over several months to get a reliable average. With these two percentages, you'll have an excellent idea of how to construct a sales pipeline that will keep your sales flowing in smoothly.

Before you can use this number, however, you need to consider the result. If you don't have a set goal, you'll be just as in the dark as if you hadn't bothered to track your activities at all. Your sales goal should be achievable, and it should be enough to cover your expenses with some money left over. That extra money can go towards covering your costs during the slow months.

Past Sales

Once you've picked a goal, it's time to evaluate your past sales. If you haven't been tracking these numbers, your sales manager can probably give you her records from previous months. Specifically, you're looking for how much money you earn in commissions on an average sale. This calculation can get complicated if you're on a sliding commissions scale (e.g. if you get one commission's percentage for meeting your quota and then a higher commissions percentage if you go above your quota). You may need to juggle some numbers based on how many sales you think you can close on an average month. Don't use your exceptionally good months as the standard for comparison; you want a number that you can reach at least half the time, and you're safer if you pick a more pessimistic total.

For example, let's say you receive a 10% commission on every sale and your average sale is for $4,000. In that case, you make (on average) $400 for every sale you close. If your goal is to take home $3,200 per month in commissions, you need to close eight sales per month consistently. Remember, it's better to be pessimistic than optimistic in these calculations, or you're likely to run out of money in the bank. If eight sales per month is a real stretch for you, you'll need to make some significant changes. You can either cut your expenses, or you can start a crash course in selling until you've improved your overall performance to the level you require.

What's the Number?

Assuming that eight sales per month are a workable number for you, you can now plug in the two percentages that you figured out earlier. Let's say that it takes you 12 cold calls on average to set one appointment, and you close one out of every four appointments you set. In that case, you need to make 48 cold calls to close one sale. And since your goal is to make eight sales per month, you'll need 384 cold calls a month to make your goal.

The beauty of having these numbers at your fingertips is that you don't have to wonder if you're doing enough prospecting or if you're going to meet your quota this month. You will always know exactly how close you are to achieving your goals, and knowing that will help boost your confidence – thus helping you make even more sales.