Co-founder & COO
Our mission is to get sales and marketing leaders promoted, to make sure salespeople maximize commission checks and to exceed your customers’ expectations during the buying experience.
Meeting math is an essential data point for any revenue operations leader, sales leader or even a front line sales rep to know about and track regularly. Knowing your business’s meeting math gives your operations team visibility into perhaps the single best indicator of future bookings. Additionally, it gives frontline managers a MUCH more relevant weekly metric to manage to.
So, what is meeting math?
Meeting math is the process of tracing bookings dollars back up the sales funnel to a single point: the first time your seller spoke to the customer in a sales context; the first meeting. Don’t freak out. Your dirty CRM data won’t kill your ability to do this.
*Take deep breaths into the paper bag, I will guide you*
Start with your average bookings per deal and multiply that by your team’s average close rate to get the average bookings value of any given opportunity. If you don’t know your close rate, I’d recommend being conservative against the software industry benchmark of 22% and use 20% as a placeholder.
ASP x Close Rate = Average Booking Dollars per Opportunity Opened
I can hear you data junkies saying “over what time span?!?” All of this math will apply over your average sales cycle duration, no matter what that is, so there’s diminishing returns trying to include edge cases.
Now take your new figure, Average Booking Dollars per Opportunity Created, and multiply it by your discovery call (or meeting)-to-opportunity conversion rate to get the average value, in bookings, for every discovery call your team has. Just like last time, if you don’t know that rate, I recommend being conservative against the industry average of 60% and use 50% as a placeholder.
Average Booking Dollars per Opportunity Created x Meeting-to-Opportunity Conversion Rate = Bookings Value per Meeting
So what does it look like when all is said and done? Well, for a business with an ASP of $12k, it should look something like this.
Pretty interesting right?
At an ASP of only $12k, with below average conversion rates, every single initial customer meeting can buy a decent laptop, regardless of the meeting’s outcome. Does that change the way you value these events? Does it change the way you feel? Does it give you ideas on behavioral incentives?
If it doesn’t, Sales isn’t your calling.
Of course, there are limitations to this method. If you suddenly SPIF the number of meetings each seller is having and don’t have any controls in place, you’re in for a world of junk meetings. But done right, not only can your front line managers have a MUCH more accurate eye on out-quarter pipeline, leadership can reward reps that are maximizing the number of meetings they’re having with contacts inside qualified accounts. If your reps have only been getting paid on bookings, this is a powerful mechanism for getting them to spend at least some effort “up funnel”.
If your business has high transaction volume or high deal velocity and a need to speak to the customer over the phone during your sales cycle, we should talk.
If your business also invests in pre-sales teams (think “Sales development” or “Market development”), let’s run the numbers for your team.
Once we do, I’ll bet the next time you walk the floor and hear reps on the phone, it’ll carry a whole new weight.