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Useful Advices - Magic Number Calculator - A Diagnostic Approach to Sales Performance
We discussed the most overlooked Key Performance Indicator is the "magic number," which refers to how many new appointments a sales rep must generate each week in order to achieve their revenue goal.
In early 2000 I walked into a VP of Sales mission with a sales organization consisti
According to USFDA, a combination product is one composed of any combination of a drug and device; biological product and device; drug and biological product
ng of 120 reps spread out over 12 sales regions. They were running at 38% of revenue goal for over 2 years. I ran a KPI study and determined they were running 2 new appointments per week/rep, but their KPI’s dictated they needed to achieve 7. So I announced a training objective to e
; or drug, device, and biological product and fixed dose combination would include two or more combinations of drug.
Examples of combination products may in
Examples of combination products may in
nable them to do it effectively, (now branded the X2 Sales System®) and threw quota out the window for 90 days. But I replaced the monthly quota with the weekly ‘magic number’.
8 months later sales units sold increased by 520%.
Calculate your sales team’s ‘Magic Number’ here:
8 months later sales units sold increased by 520%.
Calculate your sales team’s ‘Magic Number’ here:
lude drug-coated devices, drugs packaged with delivery devices in medical kits, and drugs and devices packaged separately but intended to be used together.
> http://convertmoresales.com/marketing_blitz.php
A rep's magic number is determined by looking at several of her other KPIs. Say, for example, that your company sells copiers (for which an average sales cycle is 45 days) and that a rep's monthly sales revenue goal is $15,000. Her av
A rep's magic number is determined by looking at several of her other KPIs. Say, for example, that your company sells copiers (for which an average sales cycle is 45 days) and that a rep's monthly sales revenue goal is $15,000. Her av
here is enormous increase in the number of combination products entering the market in the recent years. Combination products have proven advantages but fixe
erage revenue per sale, meanwhile, is $2,500; her current first-appointment-to-proposal ratio is 60 percent; and her closing ratio is 40 percent. What's her magic number? In other words, how many new appointments does she need to set each week in order to achieve her sales revenue goal
d dose combinations are still in the process of convincing regulatory authority on their advantages over the single ingredient formulations.
Combination pro
Combination pro
of $15,000 per month?
The Magic Number Formula
Monthly sales revenue objective: $15,000
Divided by (/)
Average revenue per sale: $2,500
/
First-appointment-to-proposal ratio: 60%
(What percentage of the time do reps gain commitment from prospective clients t
The Magic Number Formula
Monthly sales revenue objective: $15,000
Divided by (/)
Average revenue per sale: $2,500
/
First-appointment-to-proposal ratio: 60%
(What percentage of the time do reps gain commitment from prospective clients t
ucts have become life saving products for the pharmaceutical companies who doesn’t have many innovative molecules in their product pipeline and have been inc
o "take the next step" in the sales process after the first appointment?)
/
Closing ratio: 40%
(Proposal to close--measures proposals submitted vs. new business achieved.)
/
Weeks in the month: 4
=
Magic number: (approximately) 6 new appointments each
/
Closing ratio: 40%
(Proposal to close--measures proposals submitted vs. new business achieved.)
/
Weeks in the month: 4
=
Magic number: (approximately) 6 new appointments each
easingly used in the product life cycle management. Even the companies having product patents are trying to extend their product life cycle through the combi
week
Once you have identified the magic number, the next step is to determine how many new appointments a rep is currently generating each week. If she is falling short of her six-appointments-per-week goal, your job as a sales trainer is to find ways--through targeted KPI training--
Once you have identified the magic number, the next step is to determine how many new appointments a rep is currently generating each week. If she is falling short of her six-appointments-per-week goal, your job as a sales trainer is to find ways--through targeted KPI training--
nation products and maximize the revenues. But the companies involved in this practice are overlooking that they are burdening the patients both economically
to help her bridge that gap and achieve her "magic number."
Here are some tips for doing just that:
1. As an organization, announce that the ability to convert conversations into appointments will become a KPI of the sales process.
2. Define an appointment-setting objective and trai
Here are some tips for doing just that:
1. As an organization, announce that the ability to convert conversations into appointments will become a KPI of the sales process.
2. Define an appointment-setting objective and trai
and physically. They need to rightly judge the benefits of the combination products and they have to even look at the risks involved when combining the produ
n to that objective. For example, if the average weekly amount of time that sales reps devote to prospecting new clients is 22.5 hours (out of a 45-hour workweek), your organization's objective might be to cut that prospecting time in half (to 11.25 hours per week) while simultaneously
ts. Some of the combination products were well accepted by physicians while others suffered. Companies involved in development of combination products are fi
exceeding current appointment-setting levels. With your objective in place, it's now time to break down and document the steps in the prospecting process and train reps on how to make better use of their prospecting time during each step.
3. Map out all possible scenarios that might
3. Map out all possible scenarios that might
ding difficulty in defining their combination products and facing various challenges from selecting a combination to marketing it.
Following aspects would a
Following aspects would a
occur during the prospecting process. Once you have done so--and documented best-practice strategies for handling each scenario--create mini training modules and/or job aids that show reps how to handle each scenario effectively.
4. In addition to enhancing reps' prospecting skills, a
4. In addition to enhancing reps' prospecting skills, a
dd to the challenges in developing combination products:
Which markets to tap where the combination products can do fairly well?
Which combination prod
Which markets to tap where the combination products can do fairly well?
Which combination prod
nother way to ensure that they achieve their "magic number" is to help them improve other KPIs in the "magic number" formula, such as their closing and first-appointment-to-proposal ratios.
> To increase their first-appointment-to-proposal ratio, for example, your training might encou
> To increase their first-appointment-to-proposal ratio, for example, your training might encou
cts are meaningful and rational?
Which therapeutic categories to select?
Which Combinations can address unmet needs of the patients?
Do combin
Which therapeutic categories to select?
Which Combinations can address unmet needs of the patients?
Do combin
rage reps to start at the "top" with those who have fiscal authority and can "call the shots." Training might also pinpoint ways for reps to avoid "selling" products during the first appointment by providing them with an outline of the diagnostic steps they should follow in order to ev
tions increase the patient compliance?
What would be the developing cost?
How to tackle the risks encountered during combination product developmen
What would be the developing cost?
How to tackle the risks encountered during combination product developmen
aluate the fit between their solution and a prospective client's business objectives.
>To increase reps' closing ratio, meanwhile, the training you develop might show reps how to ask pertinent questions to determine what a prospective client's decision-making process entails, what the
>To increase reps' closing ratio, meanwhile, the training you develop might show reps how to ask pertinent questions to determine what a prospective client's decision-making process entails, what the
t?
As combination products don't fit into the traditional categories of drugs, medical devices, or biological products, the USFDA is in the process of devel
As combination products don't fit into the traditional categories of drugs, medical devices, or biological products, the USFDA is in the process of devel
client's internal criteria for change include and which players need to be involved in the sales process in order for proper evaluation of a product to occur. In addition, your training might show reps how to catalog risk factors (e.g., possible objections or reservations a client mig
ping new procedures for reviewing their safety, efficacy and quality.
Professional from academic institutions, pharmaceutical industries, health care indust
Professional from academic institutions, pharmaceutical industries, health care indust
ht have regarding purchasing a product or service from your organization) for each player involved in the decision-making process and then provide reps with strategies, tactics, and tools for direct communication with clients based on those risk factors.
In the end, targeted, effectiv
In the end, targeted, effectiv
y and representatives from various regulatory agencies are working out to design the regulatory requirements for manufacture and sale of combination products
e sales training can make a critical difference to your bottom line, and so can effective goal-setting. In today's high-performance sales culture, it's up to trainers and sales management to work together to focus more on daily and weekly goals and less on monthly or quarterly quotas.
.
As there is an increasing trend of the combination products companies manufacturing such products should be able to tackle the problems involved in the de
As there is an increasing trend of the combination products companies manufacturing such products should be able to tackle the problems involved in the de
Success in doing so rests on the ability to switch paradigms from looking merely at required end results to also determining the necessary KPIs it takes to get there--and then building supporting tools and training to help sales reps along the way.
And, above all, don't forget your ma
And, above all, don't forget your ma
elopment. They need to be wiser in analyzing the market trends and the regulatory requirements.
Companies that provide selfless information through particip
Companies that provide selfless information through particip
gic number!
Jeff Hardesty is president of JDH Group Inc., a sales training company based in Powell, Ohio. He can be reached at jeff@convertmoresales.com or visit www.convertmoresales.com. Calculate your sales team’s ‘Magic Number’ here: http://convertmoresales.com/marketing_blitz.ph
Jeff Hardesty is president of JDH Group Inc., a sales training company based in Powell, Ohio. He can be reached at jeff@convertmoresales.com or visit www.convertmoresales.com. Calculate your sales team’s ‘Magic Number’ here: http://convertmoresales.com/marketing_blitz.ph
tion in industry events and feedback to regulatory authorities would be able to face the challenges and will be successful in developing combination products
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