Let’s count what counts…
By David Smith, Founder and CEO of One on One Services to Seniors and One on One Sherpa
“In baseball, a hitter should be measured by his success in that which he is trying to do, which is to create runs . . . Because that was not obvious, at least to the people who ran baseball, Billy Beane smelled a huge opportunity.” Moneyball (M. Lewis, 2004 p.76)
“It’s tough to make predictions, especially about the future.”
In 2002 Oakland Athletics General Manager Billy Beane challenged the conventional model that baseball insiders used to evaluate success and predict future performance. Sherpa a Senior Housing Forum Partner, a robust sales conversion and CRM tool designed by some of the nation’s most experienced senior housing sales professionals, now challenges the relevance of existing performance and predictive senior sales indicators.
Per Jayne Sallerson, COO of Sherpa, “Our industry, too frequently, relies on a transactional, product-centered sales approach. We falsely assume that prospects who inquire are most viable if they are “ready” to move. However, given the strong resistance to moving, the only prospects who are “ready” are those with urgent needs – the ones in crisis. Then, rather than trying to help higher functioning prospects get ready, most providers give up and look for more leads.”
This requires a constant flow of new inquiries to fill each vacancy, often from well-paid referral agencies. Most communities convert less than 10% of new inquiries, making this an expensive and inefficient approach. What other area of senior living operations would tolerate a 90% failure rate? Food Service? Business Office? “Worse still,” says Sallerson, “this sales approach has led to high vacancy costs, lower-functioning residents, shorter stays, and, ultimately, lower margins.”
Lead tracking and CRM systems in our industry do not measure, much less encourage, sales behaviors that consistently lead to higher conversions. Instead, typical CRMs only track completed sales activities – even though there is no evidence to support the idea that making more calls or doing more tours leads will result in more move-ins. It is, however, possible to improve sales conversion ratios — by changing our sales approach and the numbers we use to measure, manage and predict future sales performance. Sherpa was designed to do this.
You Need to Advance Runners to Score
While others fixated on batting averages, Billy Beane concluded that a batter’s performance is more closely tied to “on-base and slugging percentages” regardless of whether they got on base with a hit, walk or error. By analogy, “runs produced” by senior living sales teams are equivalent to move-ins. Sherpa now has a growing body of evidence that sales velocity is tied most closely to the number of positive outcomes or sales “advances” that are produced — regardless of how many calls or tours it takes to get there.
What is a sales advance? Very few prospect contacts result either in a sale (run scored) or a lost lead (batter out). Most result instead in “continuations” with no “advance” or progress towards a buying decision. To use the baseball metaphor, advances are the sales equivalent of moving runners from one base to the next. Advances increase readiness and the probability of additional move-ins. On the other hand, offering product-oriented solutions too soon causes prospects to disengage and go “cold.”
This self-inflicted obstacle is the baseball equivalent of swinging at a bad pitch with two strikes. The most successful sales counselors are those that understand the strike zone. They don’t swing (attempt to close) until they have first built trust and helped the prospect get ready through empathy, curiosity and compassion. As a result, the best sales counselors are able to convert more continuations into advances and more advances into move-ins.
Sherpa focuses on relevant sales behaviors needed to help prospects get ready and providers get higher conversion ratios. For a humorous, numbers oriented comparison of transactional to prospect-centered selling, see the-sales-quota. For more information, check out www.sherpacrm.com
Are you ready to play ball?