Hi, my name is James Shepherd. Today I want to explain how to win the numbers game in prospecting. Now before I get into this episode, I really want to take a second to promote what I believe is one of the best sales books I’ve ever read.
I’m in the midst. I still haven’t finished it yet, but it is a actually a book called “Fanatical Prospecting” by Jeb Blount. I really, really like this one.
This guy is a really, really good trainer. I’ve known of him for a long time from different books. This book, he really does a good job.
I feel like he’s kind of come along way in his confidence level and he’s finally put something out that’s really like kind of slap you in the face like, okay you just got to go prospecting. A lot of these videos that I’m shooting right now, some of the inspiration for them came from that book. However, this video pretty much just came from that book because there is a thing that I’ve noticed for a long time in sales, and I’ve talked about in my videos, but this book really like brought it home to me and made me really understand it. So I’m really excited to talk to you about this today. How to win the numbers game in sales. The first thing you need to understand is that sales is a numbers game.
There is again, a lot of people out there right now and this book talks about this too, I just hate all these like, “Don’t ever cold call again. Cold calling is dead,” and all this crap. That is just ridiculous because the best sales people are absolutely prospecting, prospecting, prospecting, prospecting, all the time.
I have never met a successful sales person that wasn’t a maniacal prospector. The funny thing is you’ll have sales people that have been doing it for 10 or 20 years and you are like, “Look at them. They don’t really hardly ever prospect. They just get all these referrals.” Well, yea, do you know why? Because they prospected for 10 years every day, five days a week.
You got to prospect and everything like that. Prospecting is also a numbers game. You have your contact and your closing rate, but there is another variable that I don’t really talk about very much, which is your pipeline.
The reason I don’t talk about the pipeline very much is because in merchant services, the sales cycle is really, really short. I would say that the vast majority of merchant services sales are probably closed within two weeks of making the first contact. I would be willing to bet that 30% of all merchant account sales are probably made on either the first or second visit. There is a very short sales cycle time and so you don’t necessarily have a lot of prospects in the pipeline.
However, having said that, there is a big problem that you have when you are prospecting, if you are not careful. It deals with some basic math. So let me give you this math. I want you to imagine for a second, you went out in the field and you walked into 20 businesses. This would be like a normal day for me if I was prospecting full time. I would take about an hour and a half to two hours and I would go out and I would walk into 20 businesses.
If I walked into 20 businesses, I’m probably going to talk to seven or eight business owners. I’m going to have these seven or eight contacts. Of those seven or eight contacts, two or three of them are going to become prospects, where I’m going to put them into my CRM system because there is some next action step.
They are going to give me a statement. They gave me a statement; they need a proposal. Maybe I closed them on the spot.
Whatever it is, right? So I’ve added these let’s call it four people. I do that for a week. I do that for five days, so I’ve got 20 people now after five days.
I’ve added four people a day to my CRM. I now have 20 people in my data base system. Now let’s imagine for a second that I closed three of them. This is like a typical, average week for a merchant services sales rep. You walked into 20 businesses a day for five days. So you walked into 100 businesses. Out of that, you’ve got 20 people that showed some interest.
Out of those 20, three people actually you closed them and you got the sale. So three out of 20. Here is the big problem. You closed three out of 20, which means you now have 17 prospects left in your pipeline, or so it would seem, but the truth is you actually don’t have anybody left in your prospecting pipeline. How is that possible? You are thinking mathematically, “What are you talking about James?
There is 20 people. I sold three. That means I have 17 left.” No, you don’t have anybody left. Do you know why? Because we already know your close rate.
You are able to close at about in this case what is that 12 ½% or something, 3 divided by 20. So you are able to close at you know 12 ½ to 15%, whatever that number is and that’s it. What you are going to do if you are not careful is those other 17 people, you are going to spin your wheels with them for a long time. You have to put a shelf life on your prospects. If you know that you are closing 95% of your deals within seven days of that first contact, than when it gets to day eight, you are done with all the prospects that you made eight days ago. What has to happen is every day you have to get rid of the prospects that you got seven days ago, if you know you have a seven day shelf life.
The other thing you got to think about it is, you want to think about it more from a kind of a philosophical level is that if you are closing one out of let’s say seven people. Then obviously if you close one person, that means there are six other people that you are not going to close. You just don’t know which six they are. They are in your prospecting pipeline. If I close three people, and I know I’m closing one out of seven, then I know that three times six is 18.
I know there is 18 prospects that I’m never going to close because my close rate is one out of seven. So the reason prospecting is so difficult is because you have this pipeline of people and you are like, “Man, what do I do with all these prospects and everything because I just can’t get them to say, ‘Yes.’” What will happen is you’ll be tempted to just keep focusing on those 17 even though mathematically we know you already got the three people you were going to close out of those 17. You’re done. You got to move on to the next one. You have to constantly be replenishing your pipeline. Again, a couple ways you can look at that, I would really encourage you to think about this because this is not one of these tips I can give you that is like really easy to implement.
This one is a little more complicated because it is going to depend on what CRM system you are using, how you are tracking your prospecting and things like that. Somehow you need to have a way to tell you how many prospects are in my pipeline. You really need to make sure you have at least I would say 20 good prospects in your pipeline all the time. Again, every single day, you need to mark probably three, four, five of those prospects as old prospects because they were from more than seven days ago, and you haven’t closed them yet. Get those off your radar screen.
Again, that doesn’t mean if you have an extra hour and you want to follow up with those people, go for it, but the key thing is in your mind you have to understand if I’m going to keep making three sales a week or four, or five or whatever you are trying to do. You got to understand how many prospects do I need at any given point to make those sales, and then you have to replace the ones that become old because as you are closing deals, that means there is a lot of deals you are not going to close. So be very careful about this. Make sure that you are keeping track.
If I asked you right now, “How many good prospects do you have right now, that you are working on?” You should know the answer to that and those good prospects that you think are good prospects, they really shouldn’t be from more than seven days ago, if you are in merchant services. I mean unless you are selling really big accounts or something, you really shouldn’t have too many prospects that are older than seven days ago, definitely not more than two weeks, definitely not more than 30 days. That would be the ultimate like really long term thing, but if you are looking at 30 days and you got to have probably like a 100 prospects in your pipeline and you got to be following up like crazy. You got to be very careful about this and make sure you are keeping prospects in your pipeline and replacing the old ones. The other thing I want to get you in this video is go buy ”Fanatical Prospecting.” I am listening to it on audible right now. I’m sure they have it on Amazon.
Maybe we will show a link below the video or something, but make sure you go buy that book. I don’t know how expensive it is. I just got it on my audible subscription, but it’s definitely, however much it costs, it’s definitely worth it. Because it is really going to motivate you to get some good prospecting done.