Is Sales Just A Numbers Game? A Comprehensive Analysis

You can choose ONE of the following FOUR topics/questions for your Essay (assessment 2):

1. Selling successfully (and sustainably) requires striking a balance between long- and shortterms sales goals of an organisation. Thus, it is often better to endure some short-term ‘pain’ in order to avert a major ‘disaster’ for the organisation in the long run. Discuss how short and long-terms goals can be optimally balanced via effective planning and implementation of the selling effort.

2. One of the debates in CRM is who should have the ‘ownership’ of the process. In many firms, IT professionals appear to be the ‘guardians’ of CRM’s secrets and intricacies as CRM involves information management and technological inputs. Who do you think should have the ownership of CRM and what implications does ownership has in terms of actions and behaviours of the stakeholder? Discuss.

3. Is sales just a ‘numbers game’ as some sales managers believe? They believe that all you have to do is make the right number of calls of the right type, and the odds will work in your favour. Make 10 calls, get one sale. So, to get two sales, make 20 calls. Is this the right approach? Why or why not? Discuss.

4. It is often maintained that -- ‘what cannot be measured, cannot be managed’. To what extent do you agree with this assertion in the field of sales management? Defend your position. 

Sales is not “Just a number Game”

Sales management can be understood as a business discipline which is mostly focussed on the practical application of sales methods and techniques with the objective of incurring sales for the organization. It is one of the most significant business function as it is the outcome of sales drives the rest of the business operations. Businesses have been using variety of techniques to optimize their sales and increase the revenue share in the existing business environment (Goldratt, 2017). The essay topic here is that is sales just a number game, as quoted by many sales people in the past. They are of the opinion that one has to just make the right number of calls to make the odds work in favour. For instance, if a person gets a sale by making 10 calls, if he has to incur 2 sales he will have to make just 20 calls. This most certainly is not the right or the best way to approach at sales or even to have a look at it. The essay will be against the argument that “Sales is just a number game”.

Sales process can be understood as the set of repeated steps which the sales team has to undergo in order to convert the prospects into customers. A sales process is thus most pivotal to the organization and is a harbinger of the abilities of the sales team to do sales.  Sales is just a number game is simply an extension of the concept of law of averages, a term frequently used by team leads to encourage team members to keep pushing themselves hard in order to achieve the numbers. The law of average states that the more door/prospects/calls one sees or makes the chances of the sales increases. Based on which the sales person develops an estimate in his head that if he incurred one sales on making 15 calls then on average he would have to make 45 calls to make it to three sales. This law works pretty fine in B2C sales, however in B2B sales, the same does not holds true (Burgess, 2018).

The law of average which supports the number game is a well-defined and explained theoretical phenomenon which is based on probability. The reason here is pretty much simpler, it is a known phenomenon that by knocking on many door, the chances of one of them opening up is quite high, thus forming the basis of sales. Hence, most of the sales lead across the globe, even in large corporate organization asks their teams to keep making calls to the prospects, visit them quite often and do sales. Being true and relevant in existence, it however is not the best way to approach at sales. It is more like a routine work, whilst sales is more of a systematic process which begins with good amount of research, product knowledge, client prospecting and many more stages, which rejects the argument that “Sales is just a number game”(Evans, 2017).

There is a popular rule which is also called as the Pareto law or Principle, the law of 80/20 states that it is the 20% of the company’s customers which drives 80% of the sales for the entire organization(Tanabe, 2018). The 80/20 law has been for quite some time now, and it has given organization a different way to approach at sales, which is beyond the concept of sales being just a number game. The Pareto law states to identify the top 20% of the customers/prospects/customers which would generate 80% of sales for the company, the remaining 20% of the customers will be created organically. Another alternative use of Pareto law is that 20% of the sales person time is capable of creating 80% of the sales for the organization. Thus, two things are extremely important here:

• Identifying which 20% of the time result in 80% of the sales, based on which the activities are identified which result in 80% of the sales.
• Identify the characteristics of 20% of the customers creating 80% sales for the organization, and based on those characteristics sales team can find more such customers (Choi, Medlin & Hunsinger, 2017).

The Pareto Law: Finding the Top 20%

Thus, it can be said that Sales is not just a number game, but it is much more than that. Sales are more of a systematic process which starts by prospecting for the customers. Making more calls, meeting more number of clients is most definitely a good way to increase the sales; however it is not a comprehensive way to provide for sustainable sales. Organisation really has to work hard on achieving the numbers consistently, and keep the revenue fuel rest of the business departments.

B2B sales are different from B2C sales, as the focus in B2B sales lies on finding few players who would push up the sales for a business organization. Examples of B2B sales include Corporate sales, Bulk sales and many more, thus in B2B, the number game does not play a significant role. Most of the purchase in B2B happens after careful prospection of the prospect, based on which efforts are then made to tap the customers. B2C sales involves more of ad sales, meetings, calls, face to face meetings, personal selling and many other techniques, in the B2C, the number game does makes sense. Because, it is long list of customers which create sales for the organization. Thus, sales team have to engage with plethora of prospect make more and frequent calls and set up meetings. However in B2B sales, where most of the sales rely on the large players, the number game is not quite applicable. B2B sales are done to the customers who make 80% of all the organization sales, thus there is no need to engage with the remaining 80% of the customers, or to even keep them in the pipeline funnel. Focussing on the 20% of the B2B customers will help in achieving the desired numbers for the organization, helping in achieving the target of the sales team. In B2B sales, the profit margins is high, more than volume sales, it is more about Bulk sales, predominantly for further tweaking the product and convert it into a B2C product(Kaski, Niemi & Pullins, 2018).

According to the research report, top performing sales person spend a lot of time critically thinking about:

• Understanding the goal and objective of the target audience to align the product with their identified needs (Adamashvili & Fiore, 2017).
• How they can guide or elevate the customer to the sales process.
• How to add value to the product and reflect the same to the customers, every single time.

Thus, the approach which is based on numbers and law of averages in B2B sector has been transformed into due diligence for a small number of customers. Sales people do not waste their time, sitting on the desk and spending all day on calls. They are using web, social media platforms and Internet technology to identify the customers, understand their buying behaviour, understanding their needs and accordingly pitch the product to their identified gap. Chasing the numbers and repeatedly calling a long list of prospect does not hold much of a value in B2B sales, and it is more often seen as a big tie waster. Thus, the sales people follow a more systematic process which is based on analysing the historical data of sales, identifying the top 20% prospects, create a sales funnel, creating presentation and getting in touch with the decision maker without a further ado. Thus, the learning here is that despite going over a long list of prospect and wasting hundreds of hours making calls at the reception and schedule meeting appointments. It is advised to identify the top 20% of the prospect, segment them into different categories and then chase those customers. It would require less of a time, and would result in more sales for the business organization. Thus, the focus should not be on making large number of calls, but should be on effective prospecting of the customers, and target them by understanding their buying behaviour and characteristics (Aydin, Koc & Kaya, 2017).

Conclusion

Sales is a number game, holds true for B2C, however it does not holds significant advantage in B2B sales. B2B sales are more about careful prospection of the customers, identifying their buyer behaviour and then creating sales strategies to pursue them. The law of average which says the more people one calls, the chances of incurring sales goes up. This is true, but people do not see the time and effort they put in making so many calls, and getting only a limited outcome of it. Thus, the better approach here is to prospect on the 20% of the customers who incur 80% of the sales for the organization, and pursue them with the sales strategies of the organization

References

Adamashvili, N. and Fiore, M., 2017. Investigating the role of business marketing techniques in sales process. Issues, 25(3-4), pp.135-145.

Aydin, S., Koc, E. and Kaya, N., 2017. The Influence of Critical Success Factors on B2B Sales Performance and the Mediating Role of Social Intelligence. Business Management and Strategy, 8(2), pp.1-25.

Burgess, A., 2018. AI in Action. In The Executive Guide to Artificial Intelligence (pp. 73-89). Palgrave Macmillan, Cham.

Choi, H., Medlin, D. and Hunsinger, S., 2017. The effects of discount pricing strategy on sales of software-as-a-service (SaaS): online video game market context. Journal of Information Systems Applied Research, 10(1), p.55.

Evans, D.C., 2017. Schedules of Reinforcement. In Bottlenecks (pp. 157-168). Apress, Berkeley, CA.

Goldratt, E.M., 2017. Necessary but not sufficient: a theory of constraints business novel. Routledge.

Kaski, T., Niemi, J. and Pullins, E., 2018. Rapport building in authentic B2B sales interaction. Industrial Marketing Management, 69, pp.235-252.

Kaski, T.A., Hautamaki, P., Pullins, E.B. and Kock, H., 2017. Buyer versus salesperson expectations for an initial B2B sales meeting. Journal of Business & Industrial Marketing, 32(1), pp.46-56.

Tanabe, K., 2018. Pareto’s 80/20 rule and the Gaussian distribution. Physica A: Statistical Mechanics and its Applications, 510, pp.635-640.