Part 11: Life at 1,000 Dials a Day — How Much Is Enough?
When I do the “1,000 Dials a Day” math with someone as part of exploring whether such a speed-up might make sense for their team, I usually bring up a simple fact: if you don’t raise the bar, you are wasting your investment in any sales technology. And at 1,000 dials a day, that waste is just going to accelerate.
This is just math. You are spending the company’s money on the promise of producing more results, the same way you decided to spend on headcount. Admittedly, a surprising number of sales leaders seem to take the position that sales heads are magically free resources — that they produce more revenue than they consume in total expense.
Leaving aside that expenses are offset by gross profit, not revenue, this argument has merit, because it is somewhat balanced: the net new sales head you won in last year’s budget fight (sorry, I meant “planning exercise”) came with a commitment to produce a number. And that number — divided up, hedged a bit, and put through “the comp plan Vitamix” — turns into quota.
Shouldn’t your sales technology, training, toys, and trips be coupled to quota in the same way? After all, if you just buy something to drive the number — headcount, training, or the magical ability to get a sales conversation at the push of a button — you need to pay for it. I don’t mean just with cash: I mean with commitment.
Therefore, the answer is “Yes, or else.” Life at 1,000 Dials a Day ain’t cheap, and you must raise the bar, or else slim down your team, in order to cleanly harvest the return from that investment.
Think about it: you are going to spend $X on a new system that claims to increase the productivity of your sales professionals. You are making an investment, and an investment must generate a return. The return could be in the form of reducing your cost — a return that actually delivers $1 for every $1 saved! Or it could be in the form of increased sales — the return equals $1 multiplied by your gross margin for every $1 of new revenue generated.
In the first case, you buy productivity improvement that potentially yields lower selling costs. Great. But there is a leftover challenge: how to harvest those paper cost-savings. After all, the cost of the investment is a certainty; so, how can you spend money with a vendor and spend the same money on sales heads, management, variable sales expense, and overhead?
Here’s the rule: whatever you make more productive, you must decide to have less of. If your new purchase is aimed at rep productivity, you need to offset its cost by having fewer reps. If it is aimed at management productivity (OK, so I’m dreaming here), you must lose at least one manager. If aimed at travel — something video conferencing claims to reduce the need for — then fewer trips.
It’s simple, really. Saving money on paper is easy. Saving actual dollars by spending actual dollars is harder. When it comes to sales management, the idea of reducing headcount to offset some technology, training, or other productivity purchase is pretty sickening. Even though we know that only a small fraction of the sales team produces the bulk of the results — a perfect set-up for doing more with fewer heads at lower cost and risk — sales leaders generally can’t shake that feeling that they are taking on risk when investing in technology, or training, rather than sales heads.
Which leaves the second case, where productivity improvement is aimed at driving additional bookings, resulting in higher revenue and, eventually, profit. The plan is to keep the number of sales reps the same and drive the top line up.
At this point, you would think there is no logical choice but to increase the big number — the one taken by the company’s head of sales — and to reflect that number in increased quotas. However, this is rarely the practice. Instead, there is a budget for sales stuff — technology, training, psychotherapy, whatever — allocated either as a percentage of the total sales expense budget or on a per-head basis. This allocation is usually made top down and is based on what the other kids are spending, sometimes with the help of a consultant who told some of the other kids how much to spend.
In other words, a certain amount of “sales enablement overhead” is baked into the quota, but with no real accountability for the top line contribution of any one solution, whether tech, training, or other. This is pretty sensible, really: you can’t actually measure the specific contribution, because your sales results are so heavily skewed by your top performers, and you are pretty sure they would perform no matter what. But you don’t want to live in the Dark Ages either, using pencils and telephones and such. So, you spend, but don’t really raise the bar.
Should you decide to check out Life at 1,000 Dials a Day — as I said, not a cheap proposition — you take on an interesting challenge. Clearly, a technology that instantly drives a 10x increase in conversations can move the top line. Or it could let you win with a smaller team. But is it going to slide into that cozy little sales enablement overhead budget where zero-accountability solutions live in renewable comfort?
No, it’s not. If only 1,000 Dials a Day played nice and guaranteed that you would not get more than a 30% increase in revenue (a claim I see in airports a few times a week, worded slightly differently), then maybe it could be tucked away in that sales enablement budget with the other “tools.”
But, sadly, Life at 1,000 Dials a Day comes with accountability built in to its very bones. You can raise the bar (increase quotas), or you can lower your sales costs (decrease heads). If you think 50 real conversations per day per rep are transformative, you’re going to have to do some transforming yourself, either in terms of commitment or cost containment.
So, the answer to this question turned out to be simple: at 1,000 dials a day, you have good reason to expect more or to get the job done with less. You must either raise the bar on all your reps by signing up for a bigger number or kill your current number with a Navy Seal team of fewer, higher-performing reps.
My recommendation: see if you qualify to take a 4-hour Intensive Test Drive, so you and your team can experience Life at 1,000 Dials a Day in real combat. The experience will bring perfect clarity to the whole messy, uncomfortable discussion above. You’ll see, feel, and measure what it’s like to bring a gun to a knife fight. At which point, it’s not very hard to take a bigger number, or go commando with a smaller team — whichever suits your style and situation.
Links to Intro, Part 1, Part 2, Part 3, Part 4, Part 5, Part 6, Part 7, Part 8, Part 9, Part 10, and Part 12 of this blog series.