The Paradox of Lost Sales

Are you aware of the monthly costs that your sales go unaccounted for? Each year? Let me give you two quick examples. This is what we refer to as the – The Lost Sales Paradox.

Example 1: Your average sales are $1000 each order. Five salespeople are on your team. The average close percentage of their sales presentations is one in three. Each month, they see around thirty potential prospects. The results are that an average salesperson closes ten deals per month, generating 10,000 in revenue each month. Your organization closes 50 sales per month, which is $50,000 in revenue. However, you’re also losing one hundred sales per months (the 2nd of 3 they don’t close) which amounts to $100,000. This is around a million dollars in lost sales each year.

Example 2: Your average sales is $5,000 per order. There are twenty salespeople. Their average closing percentage is 1 out of 3 prospect presentations. Each salesperson meets with forty potential prospects every month. The results are that your average salesperson closes 13 sales per month, which is $65,000 per revenue. If you add twenty salespeople, the organization’s total monthly revenue is just under one million dollars or $60,000,000 annually. However, you also lose almost three million monthly revenue ($36,000,000).

To summarize:

Example one: Yearly sales revenue $600,000. Lost sales revenue $1,000,000.

Example 2 – Yearly sales revenue of $18,000,000; lost sales revenue for the same year of $30,000,000

The above paradox applies regardless of the products or services your organization offers, the number sales staff, your sales-generating model or market share.

First, very few salespeople and organizations have a 100 percent closing rate with new customers.

Second – Clients and customers are lost for a variety of reasons.

Third – Each day, the world becomes more competitive.

Fourth: If you don’t innovate, stay ahead of the trends and keep in touch with reality, it’s only a matter time before you become a statistic.

Let me ask you this question: What would you answer if I asked you the next question? What if you could invest $25,000 in either of these situations to reduce your ‘lost income’ losses by 25 percent or even half?

Guess what? After teaching modern and proven sales techniques to hundreds upon hundreds of companies around the globe for more than thirty-five year, the most common answer I received was when I asked the question.

No. No.

It is a risk. I understand it. You have other options. For example, you could invest in technology or pay more for employee compensation. But if you look at the cumulative losses over the years, you can see what you could have done if you had that extra revenue every month!

Yes, technology has allowed the sales process to evolve over time. The world is becoming a global village. Yes, the world is changing with the rise of social media, internet shopping patterns, and economic uncertainty. Three things are certain that will not change: One, people trust people and organizations. Two – technology can’t replace the human touch in major, critical, or important purchases. Three – Success will always require a “Blending”, process that combines the best strategies, approaches and techniques from the past, present and future.

If you notice that your company is losing sales revenue more than it is achieving, and you’re ready to do something about it, you can change the way you approach sales and marketing.

We are a team of professionals with each having two decades of experience in start-ups, sales, marketing, finance, HR, large scale project and profit centre management and running mature cross functional operations. At we are big believers that knowledge transfer is critical to our industry’s evolution. We love to share our experiences and learnings through our online resources.

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