Do you know what lost sales are costing you each month? Every year? Let me give you two quick examples. It is what is known as – The paradox of lost sales.
Example one: your average sales are $ 1000 per order. You have five salespeople on your team, and your average closing percentage is one in 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 per month (the 2 out of three that 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 percentage is one in three prospect introductions. They each see forty potential prospects each month. So the results: Your average salesperson is closing 13 sales per month for $ 65,000 in revenue for twenty salespeople, so the organization’s total monthly income is just under a million and a half or around $ 60,000,000 per year, But it is also losing almost three million in monthly income 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, very few vendors or organizations have a 100 percent new customer close rate.
Second: every organization sooner or later loses 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 it becomes 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 losses of ‘lost income’, say by twenty-five percent or even half, would you do it?”
Well, teaching contemporary and proven sales techniques to hundreds of organizations around the world for over thirty-five years, guess what is the most frequent answer I have received to this question when I have asked it?
No. Therefore, you would be willing to part with more than +/- 50% of your potential income by not investing a few thousand dollars teaching your sales team, customer service employees, or other employees who interact with your customers the essentials. and / or creative communication, sales, and negotiation skills to make sure you don’t lose this revenue year after year because you lack the skills or attitudes necessary to perform with consistent, effective, and creative excellence?
I understand, unless I can guarantee you that you will not stop losing this income, why take the risk? There are other important things you can invest or spend your money on, like 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, internet shopping patterns, and economic uncertainty, things are changing. But there are three things that are not going to change. 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 significant purchases. Three: Success will always involve a “blending” process – mixing the best strategies, approaches, and techniques from the past, present, and future.
If your organization is losing more sales revenue than it is achieving (and you will be surprised how many organizations do not know these statistics when it comes to percentages or lost sales ratios) and you are ready to get ahead of the curve when it comes down to the philosophy of sales and marketing and performance-based approaches do something about it.