Sunday, July 10, 2011

Sales: It's a Numbers Game

I was talking with a bunch of co-workers about jobs that we had when we were in school.  One of them mentioned that he worked as a telemarketer for a major metropolitan newspaper.  His job was to call up people and convince them to subscribe to the paper (obviously this was awhile ago when a) there was not a do-not-call list, and b) people actually bought newspapers).  Thinking about my own experiences with telemarketers, I commented that this must have been tough to be hung up on by random strangers.  He said that, on the contrary, he actually appreciated it when people hung up on him.  I gave him a strange look and asked him why he would say that.  He started off his explanation by saying the following:

You have to understand that sales is a numbers game

He continued by saying that when you call up random people to try and sell them something (cold calling in the telemarketing vernacular), something like 98% of the people will be totally disinterested.  No matter what you say to them, they are not going to buy a thing.  If you are tele-sales, ideally, you would want to spend as little time as possible with that 98%.  You want to move as quickly as possible to the 2% of the people who are going to give you your commission.  He said that all those people who hung up on him did him a favor.  He probably wasn't going to sell them anything anyway, so those hang ups allowed him to keep going.

He recalled that most of his telemarketing co-workers would get angry at all those hang ups.  They would do anything to keep the call going in the hope that somehow they will find that magical sales pitch that will lead to a sale.  My co-worker, however, would pick up on the fact that the person at the other end wasn't interested and would seek to end those calls as quickly as possible.  To him, a hang up meant that he didn't have to figure out a way to end the call (note that the rules of his employer did not allow him to hang up - only the customer could do that). 

He said that he churned through about twice as many numbers as many of his fellow workers.  If the average person called 50 people an hour, he would call 100.  However, he was rewarded by twice as many sales.  With a 2% "hit rate", he would make two sales an hour, where the average person would only get one.  Nevertheless, many of his co-workers never picked up on this trick.  They continued with the hard sell even when the person on the other end had little chance of saying yes.  He said that human nature is to keep trying in order to avoid the embarrassment of rejection and failure.  However, in sales where failure is common, the best salespeople have to embrace failure as an opportunity to move on to the next prospect.

I tried to impart this lesson to a intrepid door-to-door salesperson this past weekend.  With the advent of the aforementioned do-not-call registry, our local cable company has taken to sending its salespeople door-to-door in order to sell their wares.  At least once a month, we are visited with promises of great deals if we only switch.  Unfortunately, we have a bundled package from our phone company (Verizon) which includes phone service, Internet service, and DirecTV television service.  I am quite happy with the price I am paying and the service that I am getting, so I have no intentions of switching.

Previously, when I was visited by the local cable company representative, I politely tried to decline their offer.  Nevertheless, they kept going on and on about what a great deal they were offering, how it was only available through the salesperson, what great service they have, etc.  Normally, after about 15 minutes, I would make up an excuse to end the conversation, the salesperson would give me his card, and that was that.  However, on this occasion, I really did not have the patience to sit through 15 minutes of reasons why I need to switch.  It was a beautiful Saturday morning, and I was anxious to continue with my day.  When I opened the door and saw that it was my local cable company calling on me again, I immediately cut him off and said:

Look, I know that you are going to try to sell me on your cable service.  I am a happy subscriber to another service, so I have no intention of switching.  You could stand here for 15 minutes and try and convince me but it isn't going to work.  You would just be wasting your time, and I don't want you to do that.  You are better off just giving me your card, saying goodbye, and going on your way to the next house.  That way, you can make more effective use of your time.

This person obviously wasn't an experienced salesperson because, unlike my co-worker, he did not accept failure so easily.  He responding by saying that if I was done talking, he wanted to say something.  I said, "Sure.  Go for it."  He said that the last thing he wants to do is waste my time and especially not his, but his company had some great deals that he wanted to share with me. 

ARRRGGHHH!!!!

Obviously, he wasn't going to last in sales very long.  I replied:

Look, in a minute I am going to close the door.  I am not going to do it to be rude.  I am trying to do you a favor.  I could let you stand here for 15 minutes and talk to me about your great service, but it isn't going to do any good because I am not buying.  I would just be wasting your time - time that you could spend finding somebody who might be interested.  Instead, I am going to end the conversation.  That way, you don't waste your time on a prospect who isn't going to buy.

He gave me a look as if I had somehow violated some social contract by being brutally honest.  He said, well I am sorry you feel that way but if you would just listen...

At that point, I told him that I wished him luck, and that I hoped he had a nice day.  I closed the door.  As the door was closing, I heard him say "Fine, sir" as he walked away in a huff.  He isn't going to last long in this business.

If you are in sales and you want to be a success, there are two things to remember:

1. Sales is a numbers game:   If you want to make a lot of sales, you need to talk to a lot of prospects.  It's that simple.

2.  Accept failure gracefully:  It goes against human nature to accept failure.  However, in sales where only a small percentage of prospects will become buyers, you need to accept failure so you can move on to the next person (see rule #1).  If you try to hold out against hope that you will turn a no into a yes, you'll only slow yourself down in your goal of talking to as many people as possible.  In addition, you will only prolong the agony for both you and your prospect.  Better to just smile, say thank you for your time, and move on to the next person.

If you follow these two simple rules, you will be well on your way to sales success!

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