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A few times in life, we come upon a single concept that radically changes the way we interact with the world.
And in sales, there’s one concept in particular that’ll change the way you sell forever-The Law of Averages.
This concept has taken more average salespeople to top 1% than any other. It might be the most important video that I’ve ever produced.
Now, a lot of reps are under the impression that sales is an art. Getting a feel for body language, spotting subtle cues, shifting and re-shifting conversations with prospects.
But where a lot of reps get things wrong is forgetting the logic side of things. Following your cadences, hitting that cold call quota, sticking to a plan through thick and thin-that’s the other side of the equation. And if you neglect your numbers, your art is never going to be enough to propel you to real sales success.
A) Sales Is a Numbers Game
Sales is a numbers game. We’ve heard it all before. And there’s a lot of truth to it. Because when you boil it all down, sales comes down to this:
You do a number of activities.
Those activities can have an effectiveness on a scale of 1-10.
And depending on that effectiveness, they lead to a revenue number at the end of the quarter, and you get paid a commission.
It’s as simple as that.
And the more you do an activity, the higher those final numbers-that revenue and that commission-will be.
More cold calls per day results in more leads. More leads turn into more sales calls. And more sales calls lead to closed deals. Voila, numbers!
Now you can tweak that activity. Or you can choose to engage in a different one altogether. But when you get down to the nitty-gritty, the more numbers you put in, the more you get out.
B) The Law of Averages
The Law of Averages come in? The Law of Averages states that over a long enough period of time, a particular outcome or event will occur at a frequency that’s similar to its probability.
Confused? Don’t be.
Let’s break it down. Let’s say you’ve got a cold calling success rate of about 2%. And over the course of one day, you make 20 calls with zero success. Right now your success rate is… that’s right, zero percent. Now, over time, your actual rate is going to get closer and closer to the real rate of effectiveness, 2%.
So on day two, you make 20 more calls and one is a winner! That brings your rate up to 2.5%. The next day, zero winners again, bringing you down to 1.7%. And the day after that, zero again, putting you at 1.25%. But after the next 20 calls, you bring in a client, which jumps your success rate to 2%-the real effectiveness of the activity.
See how on the short-term, the effectiveness jumps around and doesn’t match the true effectiveness of your cold calling? But in the long-term, over the course of five days, it comes out to be 2%.
And on an even longer timeline, that activity is going to hover around that same percent effectiveness.
Okay, so what does this tell us?
Basically if you engage in an activity with some level of effectiveness for long enough, you’re guaranteed some form of success. If your cold emails only have a success rate of 0.001%, you’re bound to hit a winner at some point. As long as you keep trying.
Now, you’ve got three ways to make the Law of Averages work for you. First, you can put in more reps. You can send out more emails, make more cold calls, send more outreach messages. But there are only so many hours in the day.
Do different stuff. Social selling for example if you’ve never experimented with that. The problem here is that you might have a 0% success rate and so it was a complete waste of time.
The better way of using this law to your advantage is by moving the average in your favor. By pushing up your success rate and doing the same stuff, but better.
0:00 Intro
0:25 The law of averages
1:50 Why Sales Is a Numbers Game
2:55 The Law of Averages
6:12 Move the Average In Your Favor
17:34 Wrap up
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