Tim has owned and run very successful barbershops for almost 40 years. After one of his team cut my hair, I asked him how he managed the shops.
“My job as the owner is to make sure that I always have a whole pie. Some of our people want to work hard and earn a lot. They’re big pieces in the pie. Others don’t want to work as hard. They are smaller pieces. Sometimes people change, so I need to fill in the gaps and make sure that the pie pieces fit well, side by side, so the pie stays the same or gets bigger.”
Tim’s barbershop pie is like our portfolio of clients and opportunities. We’ve got only so much time and sales capacity; we have to balance out the sizes of the pieces, fill in the gaps, and make sure the pieces fit together well so we make our sales goals.
If an annual sales goal represents the whole pie, the most successful sales people we’ve met have learned to think about the pie pieces they’ll need make a “whole pie” – something like, “In a given year, I need two or three large deals, then 12 – 15 medium sized deals, and, maybe, 5 – 8 small deals that fill in gaps that come up during a year.” If conditions change, they know what they have to do to maintain the “whole pie” – reach their goals – with different sized pieces.
Some of the best we’ve met also think about the activity plan that goes with this. Assume you have an annual sales call capacity of 400 sales calls and a $10 million goal for closed business. At the beginning of the year, you create an “budget” that allocates sales call capacity to generating the different sized pie pieces that make up the pie:
Call Focus Calls Sales Clients
On prospects, to qualify 160 $0 0
Qualified SMALL deals 50 $1 million 13
Qualified MEDIUM deals 170 $6 million 30
Qualified LARGE deals 20 $3 million 2
Totals 400 $10 million
As they’re working their way through their years, they monitor their call usage to see whether they’re burning too many calls on prospects or small deals, for example, or dedicating too much call capacity to chasing large prospects at the expense of developing some of the medium and small prospects they need to maintain the whole pie for the year. If their actual call pattern is significantly different than their planned call pattern, they see a red flag that prompts them to reconsider their strategies and effectiveness.