This Sales Pipeline Calculator Simplifies Cold Calling

For many sales reps, cold calling often feels like it takes a thousand calls just to get a single appointment. In fact, reps are even told that sometimes. Statistically speaking, however, cold calling is actually much easier than it feels—and the number of calls most reps need to close a deal is usually lower than they think.

While that number changes from rep to rep, we’ve found that all it takes to transform cold calling from an insurmountable task into a manageable one is breaking down a rep’s pipeline mathematically to find it. To illustrate this, we’ve created a sales pipeline calculator (download it here) that helps reps figure out exactly how many cold calls they need to make each week in order to reach their monthly commission goal.

Below, we explain why breaking down your pipeline mathematically guarantees cold calling success and how to use our pipeline calculator to create an achievable activity target.

Cold-Calling Success is Like Moneyball

In the movie Moneyball (which is based on a true story), the Oakland Athletics built a record-setting team with a minuscule budget for players’ salaries. Their secret? They analyzed what it would take to win mathematically and then recruited players other teams had passed on who were statistically good enough to win.

You can simplify the task of cold calling using the exact same method. By understanding mathematically what it takes to close a deal, you can back-calculate exactly how many cold calls you have to make in order to close that deal (and, therefore, reach your quota or commission goals).

For example, let’s say you know the following is true about your sales process:

1. Out of every 10 proposals, you typically win 6.
2. Out of every 10 first appointments, you typically submit 8 proposals.
3. Out of every 30 cold call attempts, you typically get 3 first appointments.

These numbers mean it would take you an average of 20.7 cold call attempts to close a single deal. And if your monthly commission goal was $5,000 and you made $750 in commission on each deal, you know you have to make 138.9 cold calls per month (or 34.7 per week) to reach your goal.

Now you have a realistic activity target that statistically guarantees you’ll reach your goals. Much more manageable than just trying to make as many calls as you can, right?

The Dollar Value of a Single Cold Call

Once you understand your pipeline in numbers using the math above, you can also assign a dollar value to each cold call and the time you spend making them. Based on the example above, if you know it takes 138.9 cold calls per month to reach a $5,000 commission goal, then each cold call you make is worth $36 in commission.

And if you assumed the average cold call takes 2.5 mins, it means you need less than an hour and a half (86.8 mins) of cold calling per week to reach your goal. It also means you’d be making $864/hr. while making those calls. Not bad at all!

Next, we’ll show you how to make these calculations for yourself using numbers from your own sales pipeline using our calculator.

Why Most Sales Pipeline Calculators Fall Short

There are many sales calculators out there that help reps make the calculations above. But most of them aren’t terribly useful (or motivating) because they’re not tied directly to a rep’s commission or exact pipeline metrics. They’ll often use general numbers or approximations that aren’t realistic and therefore fail to help reps to break their pipeline apart in a way that’s actually useful.

So we built our calculator such that reps can use their own numbers to figure out exactly what it takes to achieve their commission goals. Here’s how to use it.

How to Use Our Sales Pipeline Calculator

Our calculator has two parts: the top calculates how many deals you’ll need to close in order to reach your monthly commission goal, and the bottom calculates how many cold calls you’ll need to make to reach that goal.

To start, enter your commission goal, average deal value, and average commission per deal in the top three boxes highlighted in orange. These numbers typically change from deal to deal, so pick the numbers that best represent a typical deal for you. Once you’ve added this information, the calculator tells you how many deals you’ll need to close to reach your commission goal.

Next, we’ll use the calculator to figure out how many cold calls you need to make to meet your commission goal by adding information from your pipeline. Start by entering the number of deals you typically close out of 10 proposals, followed by the number of proposals you typically submit out of 10 first appointments and the number of appointments you typically get from 30 cold calls.

Once you enter all of your information, you’ll see a couple of numbers — your cold call close ratio (the percentage of cold calls that result in a closed deal), the number of cold calls per week/month you would need to reach your commission goal, and the time you should allot each week to make cold calls. With these numbers, you know exactly what you need to do each week to reach your commission goal.

Rep Archetypes and The Value of Skills

Some reps are great closers, while others are better at generating appointments or qualifying proposals. But mathematically speaking, it’s worth noting that both closing and cold calling skills are equally as valuable in regard to reaching your commission goals.

To illustrate this, we included a number of scenarios that represent different sales rep personas in addition to the base calculator. As you can see, improving your close rate reduces the number of cold calls you need to make by the same amount as increasing the number of first appointments you generate from cold calls:

For reps struggling with (or adverse to) cold calling, this means that improving the number of appointments you land from cold calls increases the amount of money you’ll earn in the same way as becoming a better closer would.

Use Data to Improve Performance

For sales managers, this calculator may seem a little dangerous because, in some cases, it encourages reps to make fewer calls. But it’s actually an incredibly powerful tool for improving the performance of your team (and the bottom line of your company) long term.

First, an increase in activity is not always the best way to help reps attain quota. Sales rep burnout is very common and hard to recover from. So, rather than simply requiring reps to make more calls, it’s better to help them become more efficient at moving deals through their pipeline.

The sales pipeline calculator shows you where the best opportunities to do so are for each rep. For example, if a rep is struggling to convert appointments into proposals, more cold calls would help them hit their targets. But the calculator might show that all it takes to reach a quota is one or two more proposals per month. So, they’d achieve the same results by simply improving their appointment skills (versus ramping up cold calling).

Similarly, if a rep is having trouble converting cold calls into appointments, small improvements to this part of their process would yield disproportionate results for them each month. That’s why we created Atlas — to provide commercial sales reps with all of the data they need to build their pipeline more efficiently. Learn more about how Atlas could help your sales reps close more deals here.