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 consisting 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 KPIs dictated they needed to achieve 7. So I announced a training objective to enable 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%.
(See the Resource Box below to calculate your sales teams Magic Number.)
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...