LAST MONTH, I made the case for regarding sales as a process ("How To Create and Adjust Your Sales Process," July 2005 American Agent & Broker). Like all processes, it has steps. The process starts with setting a commission goal for a producer. Next the agency determines the average commission value of its accounts. Then it ascertains the average number of calls its producers must make to get an appointment, the average number of appointments required for a proposal opportunity, and the "hit ratio"–not just the raw percentage of proposals that result in sales, but also the commission value of those sales divided by the commission value of the proposals.

With all this data, the agency and producer can then determine on a monthly and annual basis just how many calls a producer will need to make to get the process rolling toward the ultimate goal: hitting the annual commission objective.

As I explained, there are numerous places where this process can break down, and it's important for producers and sales managers to be able to pinpoint these problems and take corrective action. One breakdown, for example, is a below-average hit ratio, possibly resulting from a failure to qualify prospects adequately. A breakdown also could be caused by a low average account size.