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What is a 1st appointment to proposal ratio? It's simply how many times you gain commitment with your prospect to take the next step, as outlined by your sales process. Depending on your solutions-based product or service and your sales methodology, your 'Next step' may be one of the following:
For example, let's look at a telecommunications company that provides voice, data and wireless services to their customer base. The objective of their first appointment is to gain commitment from their Target prospect to perform a diagnostic survey of their current services as it relates to their overall business imperatives and financial success factors for the current year and bring them back a 'Blueprint' of ROI based solutions. With their 1st appointment objective 'Gateway' defined, they come to a decision to measure that gateway by having the target prospect sign a release form that enables them to contact their current service provider and request a specification report around line, data and feature connectivity. The advantage of defining and measuring the first 'Gateway' is that it will provide you with a 'Reality Mirror' of how competent you are with the initial phase of your sales process. So if you have set a realistic benchmark company-wide of a 60% 1st Appointment to Proposal ratio and you have individuals below it, you can pro-actively provide them with targeted coaching and support tools to help them achieve the standard benchmark. And that drives more revenue. If I walk into a sales division and diagnose their 1st appointment to proposal ratio is below 60%, I immediately know up to 5 specifics:
More than often not, a low 1st appointment to proposal ratio is related to a process of not calling on the highest appropriate level of contact. By that I mean understanding the level of responsibility within a company that has the most input into a buying decision. Who has the 'ownership'? Who is at the 'need to know' level? It may be more than one level or title, but it is important to resolve to a top-down selling process. A top-down selling process will raise your 1st appointment to proposal conversion rates because you are in front of the appropriate person from the start. That person has enough clout to sign on to the next step or to legitimately dismiss the process. If you are dealing with a subordinate level, to the degree of which you are will be the degree your conversion rate will expeditiously decrease. There was a start-up company in a recently de-regulated industry that had accumulated 300 million dollars in investor money to build a business. Their primary sales distribution channel was a direct sales team. They decided to retain a sales training firm to set up all sales strategies, appropriate processes and training to execute to their revenue goals. Interesting enough, they promoted just the opposite of a top down selling process. They promoted a strategy and process of initiating contact with business receptionists. That's right, the nice folks who sit in the lobby to answer and direct all the inbound calls. They felt if you promote yourself to these receptionists, flatter then with brand reference gifts, they would eventually lead you to the right person of authority to look at the sales proposition. After all, they know all the names and extensions, and who has what title. I guess you could call it a bottom up selling process. At the same time, I was heading up a direct sales team competing directly with their services in the same geographical area. We followed the sales strategies and processes I am outlining. Our competitor's sales cycle was longer and their average revenue per sale was smaller. Two years later, we had grown 509% and were acquired by a national company. That was the goal.Our competitor filed chapter 11, let everyone go, and liquidated all assets. End of story. The level of responsibility you decide to call on directly effects your 1st appointment to proposal ratio. Here are (8) diagnostic tips to improve your '1st Appointment to Proposal' ratio.
Then support the sales objective by developing or outsourcing quality tools tied to technology and best practices to allow more of your sales employees to achieve superior benchmark results. Jeff Hardesty is president of JDH Group Inc.( www.convertmoresales.com ), a sales performance training
company based in Powell, Ohio. He can be reached at jeff@convertmoresales.com
Calculate your sales team’s ‘Sales Performance Competencies’ here http://convertmoresales.com/marketing_blitz.php or submit your numbers for a complimentary 30-minute performance consultation with Jeff Hardesty at http://convertmoresales.com/roi_survey.php More articles by Jeff Hardesty More articles on Selling Tactics | |
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