Last week we talked about the importance of the database and reviewed six metrics to use to evaluate and understand your database.
Today, we’ll answer the question … just how big your database should be. How many prospects do you need in your sales funnel to reach your sales goals?
The size of your database is one very important measurement of its strength. It’s a critical element for forecasting and also a really good indicator of whether your sales and marketing efforts are working or not.
There are a number of ways to evaluate the size but to simplify the evaluation, these three questions must be answered.
- First, how many people do you need to reach capacity? In other words, if you’re a community, how many rooms do you have? If you’re an in-home care company, how many people can you serve, given your current staffing?
- Second, what is your expected turnover or attrition rate? This is a number you’re probably already tracking. In the senior living community, this could range anywhere from 25% to 60% a year.
- Third, what is your close ratio? It’s a significant variable which depends on the strength of your leads, and also the sales techniques that you’re using. You can do the math on your own and come up with how many you think you need.
However, using industry averages, you need three times your capacity in your sales funnel. In other words, if your capacity is 100, your database should be at 300. If you have enough staff to service 200 people, you should have a database or sales funnel that has 600 prospects in it.
Next week we’ll talk about the strength of your database and how you evaluate it.