In part 1 of our discussion on the A/B Ratio, we defined what we mean by calling on buyers "Above the Power Line" Vs. "Below the Power Line". In part 2 of this post we will now review performance against the A/B Ratio and its impact on the sales operation.
We call an opportunity where the seller has gained access to buyers above the power line an “A” opportunity. We call an opportunity where the seller is below the power line a “B” opportunity. And, therefore, the key performance metric is, simply, the A/B Ratio. It measures an individual seller’s ability to qualify buyers by gaining access to power. Importantly, as you move up the chain of command, it becomes THE key metric to measure the effectiveness of an entire sales operation, from sellers, through managers and right up to the VP of Sales.
We call an opportunity where the seller has gained access to buyers above the power line an “A” opportunity. We call an opportunity where the seller is below the power line a “B” opportunity. And, therefore, the key performance metric is, simply, the A/B Ratio. It measures an individual seller’s ability to qualify buyers by gaining access to power. Importantly, as you move up the chain of command, it becomes THE key metric to measure the effectiveness of an entire sales operation, from sellers, through managers and right up to the VP of Sales.
Referring to the table below, here is what we have found. Until managed effectively, most sales people start out at a rather deplorable ratio of 1/8. In other words, for every opportunity above the power line, sellers work on 8 below. And here’s a very sobering fact. Over the years we’ve worked with our clients to determine how much time sales people waste below the power line, selling to people who cannot buy. At an A/B Ratio of 1/8, our clients have found that sellers waste 40% of their time - 2 days per week - dealing with people at the wrong power level. Think of the impact this has on the entire sales organization!
But, if management follows the plan we will outline in our last post on this subject, they can help their individual sellers and the entire operation achieve a 1/1 ratio after only one quarter. After two quarters, they can achieve a ratio of approximately 4/1. And, after only three quarters, they can achieve an industry “Best in Class” steady state of approximately 6/1!
And how can "Best in Class" A/B Ratios be achieved? In our upcoming post we will outline the integrated plan that Executives, Sales Managers, and Sellers should follow.
And how can "Best in Class" A/B Ratios be achieved? In our upcoming post we will outline the integrated plan that Executives, Sales Managers, and Sellers should follow.
