How To Make Money By Receiving "No’s"

Today’s post is a guest post from Timo Rein, CEO of Pipedrive. I found their website and loved the concept and asked them to contribute a little something here. I hope you enjoy it.

I started my sales career, selling books door to door one summer. With 14-hour work days, knocking on doors of strangers, it was not the most glamorous of jobs, nor the easiest, but it sure was a good way to learn to sell.

Nothing built my confidence more than receiving an order, or even better, receiving multiple Yes’s in succession. On the flipside, getting a streak of No’s diminished that long-built confidence level pretty fast.

All it took was one bad day to go from a feeling of “I can sell to anybody” to “Nobody’s buying and I wonder if someone ever will”. The latter is probably the worst emotional state I’ve ever experienced when it comes in sales. When it’s a slump, it’s a slump. The good news is that there’s a workaround that has helped me keep my head up at the toughest of times, and that is to put a price tag on your key sales activity.

On average, I sold $375 worth of books each day. To do that, I started 65 conversations, which resulted in about 30 conversations that looked like conversations (read: when I was not slammed the door on after the first sentence). I put the two together and calculated the “value” of each attempt. I then knew that with every conversation I literally made $12.5 ($375/30).

With a bit of math, I had a ‘trick’ to avoid really intense low-points – zero days, for example. At the end of a zero day I had a good reason to conclude that I had made $375, but it just did not materialize that day . And what kept me going was the knowing after every freaking “No” that it was worth some dollars.

This simple technique has served me and sales people I’ve coached well during the dozen years since my summer of door-to-door sales. If you haven’t yet worked out the value of each “No”, here’s how to do that.

1. First, calculate average daily sales revenue from your monthly revenue target. For me it was $375.

2. Next, count or calculate how many sales attempts you do every day. I used the 30 “proper” conversations figure, not the 65 attempted conversations to keep the numbers as real as possible.

3. Last, calculate the “value” of each attempt. For me, it was $12.5 ($375/30).

I’ve co-created some tools to make this easier. The Sales Pipeline Calculator helps to get to the number of calls or meetings you need to make (or doors you need to knock on) to reach your sales goals. And the tongue-in-cheek NO Calculator visualizes the amount of NOs you have to hear each week, month and even during your whole lifetime.

Bio:

Timo Rein is co-founder & CEO of Pipedrive CRM. Timo has been active in sales and sales management for more than a decade. Over the years he learned to despise CRM software as a time waste, so he set out to co-create his own sales pipeline tool.

 

Question: Want to be a guest blogger? Reach me through the contact page for details.