If You Don’t Know These, You Should!

You must take personal responsibility. You cannot change the circumstances, the seasons, or the wind, but you can change yourself. That is something you have charge of (Jim Rohn).

The Importance of Knowing Your Numbers

When Dave Alwan, owner of Echo Valley Meats, made his first appearance on ABC’s Shark Tank, he didn’t have a business plan.

The Sharks agreed his butcher-shop quality meats were excellent, but they weren’t willing to invest in a guy who couldn’t tell them what it cost to acquire a customer: especially since he was seeking funds to market his products online.

Alwan went home to Peoria, did his homework and came back to take the Sharks on again (Episode 421) … but this time with a firm grip on “his numbers.”

Now, he not only knew the cost of acquiring a customer, but the cost of retaining that customer – and the Sharks were rightfully impressed. This time the butcher-turned-entrepreneur left the show with Dallas Maverick’s owner, Mark Cuban, as a business partner.

So, let me ask you …

Do you know your numbers?Click To Tweet

If you were standing, right now, in front of the Sharks, shooting for a chance to financially and strategically partner with someone with a known track record of growing successful businesses – a relationship that could potentially take YOUR business straight to the top – would YOU know your numbers?

Would statistics like these be something you could quote with confidence?

  • Net profit margin
  • Customer acquisition cost
  • Average price per sale
  • Primary competitors and their pricing
  • Percentage of sales by product line or service

You see, it is one thing to ‘be in business’ – but quite another to have a plan – a strategy for success, supported by clear metrics to monitor your progress.

Reasons to know your numbers:

  • Knowing your numbers allows you to set goals based on a plan – not on a hope and a prayer – and enables you to set a reasonable budget.
  • Knowing your numbers enables you to pinpoint the areas where you are doing well and the areas where you aren’t doing so well.
  • Without the numbers, you may realize sales are down. With the numbers, you can tell WHY they are down – and that puts you in a whole lot better position to do something about the problem.
It is one thing to ‘be in business’ – but quite another to have a plan!Click To Tweet

A well-considered and purposely developed strategy is essential

The sales path is akin to embarking on a journey. In order to get from here to there, you must first know where you presently are … and where you want to go. Once you have ascertained those two things, you can map out a plan to get there.

That is true for your own business, and it is true in a sales conversation where your aim is to help others. It is only after you know their current situation and where they want to go that you can together ascertain whether your product or service could bridge the gap you and the prospect have identified.

A fundamental saying in business is “You can’t manage what you can’t measure.” Many times, businesses under-perform – not because the people or the products are substandard, but because they don’t know their numbers.

Without exception, with my private clients, we discuss the importance of numbers and the necessity of investing a little extra time to track them. Without real numbers, it’s difficult to track progress. Numbers help me help my clients. Improving your numbers is what gives your time freedom, as well as the ability to leverage and grow.

Which numbers should you track?

Individual businesses can vary on WHICH numbers are most relevant, but let’s take a look at some of the numbers typically important to sales:

  • Number of calls made
  • Number of appointments scheduled
  • Number of presentations (or sales conversations)
  • Number of proposals and quotes
  • The close rate for presentations and sales conversations
  • The close rate for proposals
  • Average price per sale

I love the wisdom of the late Jim Rohn. I remember him telling a story about his first sales manager reviewing Jim’s numbers: Jim started to make an excuse for his performance, but his mentor interrupted him, and in essence said, “The reason we make the box small, Jim, is to hold only the number. We don’t give you room to write excuses.”

Next week, let’s look at specific ways to track and utilize those all-important numbers.

Speak Your Mind

*