Agency Operations Focus
By Billy R. Williams
SALES GOAL FORMULA
How many prospects do I need to reach my sales goal?
Here is a little-known insider nugget: Property/casualty carriers want only a 15% to 20% market share in any one geographic area. That means that the carrier’s business model is built around letting 80% or more of your prospects walk out the door without buying their product.
For captive agents, this is a brutal realization when they look at their quote to close ratios. For independent agents, the blow is softened because they have multiple carriers among which they can shop on behalf of a prospect. If they track their quote-to-close ratio by carrier, however, they will see the same close rates.
I understand and agree with the logic behind the carriers’ self-imposed market share restrictions. To comprehend their rationale, all we have to do is look at the floods in Houston and the wildfires in California.
[Independent agents] need to track their marketing and quote-to-close results, increase their referral partnerships, and solidify their retention processes.
What does that mean for independent agents in 2019? They need to track their marketing and quote-to-close results, increase their referral partnerships, and solidify their retention processes.
Let me explain.
Tracking your quote-to-close ratio by marketing campaign will tell you how many prospects you must acquire to reach your goals. There is a simple formula you can use with any marketing campaign to calculate the number of prospects you need to reach your sales goals for a campaign. You will need three pieces of information:
- The total number of prospects you started with
- Your sales goal
- The total number of sales from a currently operating campaign or a completed campaign
(Of course, you also could use the historical information from all of your completed campaigns to help you identify the most promising lead sources and best prospecting list to use in a future marketing campaign. If you have agency-wide quote-to-close numbers, use that data in the formula below.)
The formula is: Original Number of Prospects x (Sales Goals / Actual Sales) = Number of Prospects Needed.
Several variables will affect your prospecting results:
- Lead sources
- Technology you use to prospect
- Time of day you prospect
- Prospecting method: phone, email, mail, conference calls, and so on
- Sales skills of the person or team that is prospecting
Don’t overthink the formula. Let the numbers tell you the real story. Don’t try to skew the numbers to match what you want to occur; let them honestly show you what is happening.
Let’s apply the formula to four different prospecting scenarios:
Scenario 1: You gave your telemarketer 1,000 names from a purchased list. Your telemarketer called prospects between 10:00 a.m. and 3:00 p.m. (the absolute worst time for telemarketing, by the way!). The campaign produced five new sales; you wanted 20 new sales. Based on the formula, you will need to give your telemarketer 4,000 names to reach your sales goals: 1,000 x (20/5).
Marketing suggestion: Change your prospecting times, and you’ll get better results.
Scenario 2: You bought 100 real-time Internet leads for a producer. You used a lead management tool to reply immediately to the leads, and you followed up on a timely basis. You closed 10 new sales; you wanted 20 new sales. Based on the formula, you will need to give the producer 200 leads to reach your sales goal: 100 x (20/10).
Marketing suggestion: Although this percentage is pretty good, make sure you are purchasing the highest quality real-time leads available (for instance, those where the prospects provided real information and truly wanted a quote).
Scenario 3: You mailed out 500 postcards. You received 100 call-ins, had 20 people download information from your website, and had 12 people show up for a conference call; all this activity produced seven new sales. You wanted 10 new sales. Based on the formula, you will need to mail 714 postcards in your next campaign: 500 x (10/7).
Marketing suggestion: Make sure you are mailing to areas that match the demographics of your target prospects.
Scenario 4: You bought 1,000 aged Internet leads. Your team emailed, called, and mailed postcards to the leads over a 60-day period. All of the activity produced 14 new sales. You wanted 25 new sales. Based on the formula, you will need to purchase 1,785 leads to meet your sales goal: 1,000 x (25/14).
Marketing suggestion: Make sure your X-date follow-up and requoting process are thorough so you can get the maximum return on your investment.
By using this simple formula to calculate the number of prospects you need to reach your sales goals for a marketing campaign, you’ll be on your way to higher sales and a more successful 2019.
The author
Dr. Billy R. Williams is president of Inspire a Nation Business Mentoring Services, a Williams Investment Group company. Keep up with him and his firm’s offerings by visiting the Inspire a Nation Business Mentoring website at www.inspireanation.org or by connecting with him on LinkedIn at www.linkedin.com/in/billyrwilliams.
