I used to work as a salesman for a company that sold accounts receivable systems to other businesses. I noticed that the best salespeople had one thing in common. The most successful salespeople were all different. They were men, women, tall, short, young, old, well spoken or inarticulate. The trait they all shared is that they knew their numbers. They knew the number of cold calls they made (either in person or on the phone) in a week, month or year. They knew the number of times the cold calls resulted in speaking to a decision maker. They knew number of times speaking to the decision maker led to a sales presentation and how many times the sales presentation led to an actual sale. I was amazed that many of them could recite their numbers off the top of the head. The rest could access the information right away.
On the other hand, when I went on sales calls to talk to business owners I was surprised that many of them knew very little about their own business. Since we were talking accounts receivable, they did not know the total amount of accounts receivable, the number of customers this represented or how old their receivables were. Even if they had in place some internal system to collect, they had no idea if it was effective. They did not know what percentage of the time letters or phone calls worked. Did the size or age of the receivable change the effectiveness of the method of collection? I thought that if they did not know about this aspect of the business, what else did they not know about?
The point is that without keeping track of business activities and having accurate, concrete numbers, the owner is flying blind. Getting back to example of the salesman, keeping track of their activities were essential to their success. [pullquote-right]By looking at the numbers, they knew where they were effective and where they needed to improve.[/pullquote-right] They also could track whether their performance was improving or getting worse over time. Perhaps they were making lots of cold calls but not getting through to the decision maker. They needed to change their technique so they could get to the decision maker more often. Maybe they were getting many sales presentations but not closing. When they analyzed their numbers, they could realize this and make changes to improve the performance.
Without question it is impossible to successfully operate a business without keeping track of the various components of the business and analyze them. [pullquote-left]The methods do not need to be some sophisticated analytic system.[/pullquote-left]Of course every business is different and the activities to tracked and the method of analysis will vary. It can be as simple as keeping numbers on a sheet of paper with different columns and categories. As long a a method is consistently utilized, the business can figure out what is working and what needs to be improved.