Do you know what your lost sales cost you each month? Every year? Let me give you two quick examples. It’s what we call – The Lost Sales Paradox.
Example One: Your average sales are $1,000 per order. You have five salespeople on your team and your average closing rate is one out of every three sales presentations. They see approximately thirty potential prospects each month. So – the results; Your average salesperson closes ten sales a month for 10,000 in total revenue each month. So your organization is closing 50 sales a month for $50,000 in revenue. But you’re also losing a hundred sales a month (2 out of three don’t close) totaling $100,000, or about a million dollars a year in total lost sales.
Example Two: Your average sales are $5,000 per order. You have twenty salespeople and your average closing rate is one out of every three prospect introductions. Each of them sees forty potential prospects each month. So, the results: Your average salesperson is closing 13 sales per month for $65,000 in revenue multiplied by twenty salespeople, so the organization’s total monthly revenue is just under a million and a half or about $60,000,000 per year. but – you’re also losing almost three million in monthly revenue or $36,000,000 per year.
To sum up:
Example One – Annual Sales Revenue $600,000 – Lost Sales Revenue for the Year – $1,000,000.
Example two – Annual sales revenue – $18,000,000 – Lost sales revenue for the year – $30,000,000.
Regardless of your organization’s products or services, the number of sales employees, your lead generation model, your competition, or your market share, the above paradox generally applies, and why?
First of all, very few sellers or organizations have a 100 percent new customer closing rate.
Second: All organizations sooner or later lose customers or clients for various reasons.
Third – Every day the world becomes more competitive.
And fourth: If you’re not reinventing yourself, staying ahead of trends, and staying in touch with reality, it’s only a matter of time before you become a statistic.
So let me ask you: if I asked you the following question, what would your answer be? “If you could invest, say, $25,000 in any of the above situations to reduce your ‘lost income’ losses by, say, twenty-five percent or even half, would you?”
Well, teaching contemporary, proven sales techniques to hundreds of organizations worldwide for over thirty-five years. Guess what’s the most frequent response I’ve gotten to this question when I’ve asked it?
No. So you’d be willing to give up more than +/- 50% of your potential income if you didn’t spend a few thousand dollars teaching your sales team, customer service employees, or other employees who interact with your customers. customers the essentials. and/or creative communication, sales, and negotiation skills to ensure they don’t lose this income year after year because they lack these necessary skills or attitudes to perform with consistent, effective, and creative excellence?
I get it, unless you can guarantee you won’t stop losing this income, why take the risk? There are other big things you can invest or spend your money on: more technology, better offices, or employee compensation. Yes, but if you add up the losses over the years, imagine what you could have done with that extra income month after month!
Yes, the sales process has evolved over the years thanks to technology. Yes, the world is becoming a global village. And yes, with social media, online shopping patterns, and economic uncertainty, things are changing. But there are three things that are not changing. One: People buy from organizations and people they trust. Two: Technology will never completely replace the human touch when it comes to important, critical, or meaningful purchases. Three: Success will always involve a process of “mixing”: mixing the best strategies, approaches, and techniques from the past, present, and future.
If your organization is losing more sales revenue than it’s making (and you’ll be surprised how many organizations don’t know these statistics when it comes to lost sales percentages or reasons) and you’re ready to get ahead of the curve when necessary. it gets to sales and marketing philosophy and performance-based approaches do something about it.