Deep Inside Every Sales Person is the Heart of a Ferengi

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Enough is Never Enough
Ferengi Rules of Acquisition #97

Ask any sales person how many leads they need and they’ll probably tell you something like, “Enough to make my quota!”

It’s a no lose proposition for them. If they make their quota, it’s due to their fantastic selling skills. If they don’t make their quota, it’s because they didn’t get enough leads from marketing.

So how do you take back some control over your relationship with sales? It’s a fairly simple equation. You can make it more or less complicated depending on your sales process, but in its simplest form it looks like this:

Monthly Sales Quota in Dollars = X
Average Sales Price = Y
# of Sales Needed = X/Y
% Close Ratio of Qualified Leads = Z
# of Qualified Leads Needed Each Month to Hit Quota = (X/Y)/Z
# of leads that sales can be counted on to bring in = W
(through things like referral selling and networking opportunities)
# of leads marketing needs to generate = (X/Y)/Z – W

Here an example using real numbers.

If a sales person has a quota of $100,000 for the month and the average selling price is $25,000, they need 4 sales to reach their quota. (1000,000/25,000) If their close rate on qualified leads is 25%, they will need 16 qualified leads to reach quota. (4/.25) If they can bring in 2 qualified leads every month on their own, that means that marketing needs to bring in 14 qualified leads.