What is the Law of Averages?
The law of averages (LOA) is essentially the idea that if you zoom out and look at the big picture, you will start to see a set number of outcomes. Most importantly, a predictable pattern will emerge that you can use to guide your planning and decision-making. So how does this apply to sales? When you boil it down, there are only two potential outcomes: the customer says YES or NO.
Of course, there are several ways a customer can tell you no — and it’s important to recognize that for what it is.
While it sounds black-and-white, the law of averages is not an exact science. When you flip a coin, there is a 50% chance that it will land on heads or tails. But that doesn’t mean when you flip a coin 10 times, you will always get 5 of each. Applying LOA will help you understand how your sales calls are likely to pan out over time, with a large enough sample size.
This will help you:
- Figure out how many sales calls you need to make to hit your goals
- Embrace the NO’s so you can maintain your attitude and focus on your biggest opportunities
This is how the Law of Averages works in B2C sales:
50% will just say NO.
Half of all potential customers don’t care what a great deal this is or what you have to say. They don’t have time, don’t feel like interacting with a human today, or just can’t be bothered. The reason doesn’t matter; they’re not interested.
20% are C.O.W.S.
C.O.W.S. stands for “Cannot Operate Without Spouse.” Yes, it’s possible to overturn this objection — after you’ve built a relationship with the customer and shown value in your offer. However, 20% of the people you meet are likely to represent the other half a buying decision. They’re not the person responsible for saying YES or NO.
When someone tells you upfront that they can’t make a decision without their spouse, partner, roommate, mom, dad, brother, sister, or whoever — believe them. They’re not your customer, so move on.
10% are Liars.
Liars are the people who want to tell you no without telling you no. In my experience, these people are usually in a hurry. They don’t have time to find out what you’re selling; they just need a quick, easy way out. So they lie.
Don’t let it hurt your feelings. At one point in the field, I wore a badge that said “Tech Expert.” This was not the name of the company I represented — or any company that I know of. And at least once a day, someone would tell me, “Oh, I already use Tech Expert! Thanks!” It’s a quick and painless way to get out of the conversation.
They can carry on with their business, and you’re freed up to move on to the next customer.
10% are Fakers.
Unlike Liars, Fakers desperately don’t want to tell you no. But they’re also not going to buy your product.
Basically, this person fakes interest in your presentation. While they listen and nod, even saying “Oh, wow!” they’re secretly hoping an asteroid will wipe out the planet, and they’ll never have to actually tell you no.
Encouraged, you finally go for the close. At this point, a Faker will come up with some crazy excuse why they can’t do it “right now.” They don’t have their wallet, have to go wash their hair first, can’t remember their information, [insert lame excuse here].
Fakers are also the #1 most frequent travelers on the “Be Back Bus.”
Will you be here later?
Spoiler Alert: They are not coming back.
In their minds, saying, “I can’t do it right now, but I’ll be back!” is a way for Fakers to get out of the conversation without having to let you down.
Of all the NO’s, this is the one that frustrates sales people the most. Fakers exhibit all the classic Buying Signs, and you can’t help but get excited. You start checking that YES box in your head — SOLD. And then when they bail at the last second, that sucks. It’s disappointing.
If they really weren’t interested, why didn’t they just say so?
Believe it or not, saying NO is just hard for some people.
10% are Qualified Buyers.
First of all, what is a Qualified Buyer? This term can have a more refined meaning for different industries, but in general, a Qualified Buyer is someone who shows some interest and has the ability to buy.
How to reach more Qualified Buyers:
Sales people are achievers, and to us, 10% seems like a low number. So, of course, we want to know how to grow that 10% to 20%, and 20% to more. Our first thought is often: Work smarter, not harder.
Wouldn’t it be great if there was a way to filter out all the other people and just spend your time with Qualified Buyers? Of course! Depending on your business, there may be smart ways to narrow your audience by targeting those most likely to need your product/service.
After targeting the right audience, you will get the greatest ROI on your time and energy by maximizing your opportunity with Qualified Buyers. Instead of improving your LOA, you should work on your conversion rate (# New Customers / # Qualified Buyers).
#1: More is more.
If Qualified Buyers make up 10% of your audience, then you want to talk to 100 people instead of 10. 1,000 instead of 100. According to the Law of Averages, the wider your sales funnel, the more Qualified Buyers you’ll meet.
More Leads = Qualified Buyers = More Sales.
So focus on reaching as many people as possible who could possibly be interested in what you have to offer.
#2: NO’s are not personal. It’s not about you.
Remember that your potential customers are real people with full lives outside your interaction with them. Embrace the NO’s, qualify your customers, and focus on building relationships. The sales will follow.