David Ramos

It’s a cliché that sales is a “numbers game.” Basically, that phrase means that the more people you try to sell to, the more sales you will make. Experienced salespeople know their “ratios”: for instance, that they will have to make X numbers of calls each month, in order to have Y express interest in their product, and Z who actually buy. A sample ratio calculation could be:

I need to call 1,000 customers a month—or 50 calls each and every workday—so that 100 (10 percent) express a positive interest in my product. Out of that 100, 25 (2.5 percent of the original 1,000) will agree to let me come to their offices and make a presentation, which means I need to make at least 7 office visits each week. [Actually 6.25, but you need to round up to make your quota.] Out of those 25 presentations, I need to close at least 5 sales (.5 percent) of at least $3,500 each, for a total of $17,500 in sales, or I won’t meet my target.

Note how small the ratios are: only 2.5 percent of the customers called agree to a meeting, and only .5 percent will wind up buying.

You want a way to improve your close ratios? Well this article isn’t going to tell you how to better your phone skills to focus on the least effective way to prospect…cold calling. Here is a ratio for you, referral- based qualified leads close ratios are 60 percent! That is right, 60 percent. What other sales method delivers 60 percent business for your efforts? Where and how do you come by these leads? Networking!

Effective business networking is the linking together of individuals who, through trust and relationship building, become walking, talking advertisements for one another. Networking is an essential skill for most business people, but especially for sales professionals. The strong association between the sales executive as a person and their current business demands that they get out into the world and create and maintain successful business relationships. Here are some tips and resources to help you improve networking skills and extend your reach.

Keep in mind that networking is about being genuine and authentic, building trust and relationships, and seeing how you can help others.
Ask yourself what your goals are in participating in networking meetings so that you will pick groups that will help you get what you are looking for. Some meetings are based more on learning, making contacts, and/or volunteering rather than on strictly making business connections.
Visit as many groups as possible that spark your interest. Notice the tone and attitude of the group. Do the people sound supportive of one another? Does the leadership appear competent? Many groups will allow you to visit two times before joining.
Hold volunteer positions in organizations. This is a great way to stay visible and give back to groups that have helped you.
Ask open-ended questions in networking conversations. This means questions that ask who, what, where, when, and how as opposed to those that can be answered with a simple yes or no. This form of questioning opens up the discussion and shows listeners that you are interested in them.
Become known as a powerful resource for others. When you are known as a strong resource, people remember to turn to you for suggestions, ideas, names of other people, etc. This keeps you visible to them.
Have a clear understanding of what you do and why, for whom, and what makes your doing it special or different from others doing the same thing. In order to get referrals, you must first have a clear understanding of what you do that you can easily articulate to others.
Be able to articulate what you are looking for and how others may help you. Too often people in conversations ask, “How may I help you?” and no immediate answer comes to mind.
Follow through on ALL contacts made immediately. Have you ever attended a networking event, collected a bunch of business cards, and when you go through them the next week, you can’t remember who many of them are?
Follow through quickly and efficiently on referrals you are given. When people give you referrals, your actions are a reflection on them. Respect and honor that and your referrals will grow.
Call those you meet who may benefit from what you do and vice versa. Express that you enjoyed meeting them, and ask if you could get together and share ideas.

If the prospect of building the referral end of business is so enticing, why do so few sales people in our industry do it? Because they use the wrong approach or are not consistent or worse yet, they have a dinosaur of a sales manager (who believes he knows everything and hasn’t learned anything new in 10+ years) that makes them do nothing but cold call, thus they have limited success.

Building an effective business network takes time, so you have to be patient and measure metrics to determine the ROI of your efforts. Here is a simple outline I recommend on measuring your networking effectiveness in the groups you join. The key, as in many other facets of life is consistency and focus on the activity. The more focus you put into the effort, the better your skills in developing your network will be and the results will more business and more meaningful relationships with your customers.

Direct cost associated with the networking group/event
Number of events attended
Number of contacts generated
Number of sales leads generated
Number of referrals
Number of sales
Number of service contracts
Dollars generated from direct contacts
Dollars generated from referrals

These tips are simple but when executed on a regular basis they will drive your referral business and build sales revenue. Start today and watch your referrals and close ratios grow.

About the author: David Ramos is sales operations consultant for Strategy Development, an industry management consulting and advance sales training firm providing sales, service & MPS information, including workshops for the BTA as well as a MPS Sales eLearning program with InfoTrends. He also instructs a selling skills workshop called “Sell With Success”. You can reach him at www.strategydevelopment.com or ramos@strategydevelopment.com.