In sales, there are only two things you can change:
- Reach: The number of potential customers you reach
- Conversion: The proportion of potential customers you convert
This concept can be expanded to many things: Blogging (articles vs viral article%), dating (dates vs relationship%), Venture Capital (investments vs exit%).
The principle can even be shown graphically. A high reach with a low conversion rate will look as follows:
and conversely, a low reach with a high conversion rate will look like the following:
If you are a salesperson, you are employed to increase the area under the graph; the amount of conversions in total. If you increase the area under the graph (preferably in an ethical way), you will succeed.
That brings us to the question: How do we increase the area under the graph?
How to increase your area under the graph?
So how do we increase the area under the graph? There are two ways: Increase conversion or increase reach:
Let’s take a look at conversion: The close rates of salespeople rarely differ by an order of magnitude. According to this article companies close 30% of qualified leads while the average closes 20%. It’s a 50% increase, yes, but compared to increasing reach, the results are minor.
It also makes sense for a mathematical perspective: There is an upper limit to how big of a percentage you can close. Once you get to 100 (if it were even possible), there is nothing much to do.
So if your conversion leaves little return on investment, what about reach?
Increasing your reach
In high school, I self-publishing 4 books for high school students. After printing them, we decided we wanted to get them into bookstores – and so I had to venture into telemarketing. After all, book store owners would not order a book if they didn’t know it existed.
I knew that there was not much I could do to change the conversion. Some bookstores did not live close to a high school.
What I could do, however, was increasing my reach. By calling each relevant bookstore – and changing my pitch, once I found something that worked better – I rapidly sold a few hundred books.
Not because of a high conversion-rate, but rather because I called every bookstore in Denmark.
Finding an acceptable Conversion
As we have seen, of stressing over how to increase your conversion a few percentage points, leaves few results. Instead, we should find a rate of conversion that is acceptable, take advantage of the low-hanging fruit and then move on to increasing our Reach as much as possible.
If you wanted to, you could even use the Prince of Nigeria-principle:
The Prince of Nigeria-principle
Even with an atrocious conversion rate, you can still reach results if your reach is high enough.
The emails of the Prince of Nigeria scam are blasted out to millions and millions of people. Most hit the spam folder. But once in a while, someone still responds. And because their reach is so big, they end up with some conversions (albeit horrible conversions that ruin people’s lives).
Reach increases conversion
Another connection between reach and conversion is the fact that a high enough Reach might indirectly increase conversion. By getting enough experience, your conversion might increase automatically.
That’s why people say “it’s a numbers game” in dating. If you meet enough people (Reach) your chance of meeting someone you connect with (Conversion) is higher. And as you meet increasingly more people, your rate of conversion might increase even more.
Of course, if you smell like a sewer and have problems talking to strangers, your conversion will be lower. But if you met enough people, you would probably find someone eventually.
Focus on Reach, not Conversion
One way to use the principle of reach and conversion is when communicating through email.
Let’s say you want to create a podcast, and you want to interview someone impressive. You could either spend 2 hours putting together the perfect email for 1 person, or you could spend 2 hours sending a semi-decent email to 5 people.
Let’s take a look at how that would play out:
Even though we assume that the response-rate is 40 percentage points lower, we can still expect at least 3 times as many responses.
Implications and wrapping up
The implications of the principle of reach and conversions are many. A few of them are:
- Don’t spend weeks writing one perfect job application – write 5 decent application each week.
- If you want to get good at something, increasing your reach/output might be the best way.
- If you don’t meet new people often, your dating life will be worse off.
- Don’t try to do something perfect – usually perfection is the enemy of action.
Exceptions
There are – as with most principles – a few exceptions and caveats:
- If you are in a VERY small market, the tactic of increasing reach drastically might not work out as you might end up burning bridges.
- If you increase your reach by contacting those who are not potential customers, your results will suffer.
