When it comes to negotiating with promoters, it literally pays to know your numbers.
By that, I mean, your closing percentage: the percentage of the room that buys what you sell after your presentations.
If you have a high closing percentage, you’ve got clout with promoters.
Think about it. Since the promoters generally receive 50% of your sales, it stands to reason that the more sales you make, the more valuable you are to them, and the more likely you are to get what you want.
How to Correctly Calculate Your Closing Percentage
A common mistake that speakers make when calculating their closing percentage is to use the head count, rather than the buying units. The head count is everyone in the audience. A buying unit is a person, couple or group that can make a purchase.
For instance, if you’re speaking to a room with 1,000 people, but, because of the topic, they’re all couples, you don’t have 1,000 buying units. You have 500, because, typically, a husband and wife are only going to buy one of your programs. Also counted as one buying unit could be a boss and his or her assistant or a small group from the same office.
To calculate your closing percentage, just divide the number of people who bought your product or service by the number of buying units in the room. So if you sold 100 copies of your program, and there were 400 buying units, you had a closing percentage of 25%.
Now, let’s say the head count of that room was 800. If you mistakenly used that figure, you’d get a sales ratio of only 12.5%.
Obviously, there’s a big difference in how a promoter is going to view you if you do 25% in sales versus 12.5%.
Even more important, that ratio wouldn’t accurately reflect your skill and achievement. So you could think that you’re not doing very well in your sales presentations, when you’re actually excelling.
How to Use Your Clout
Knowing your numbers can help you get booked, secure an optimum time slot, and give you leverage when promoters want to make changes.
For instance, if the promoter says, “I know your contract says you can speak for 90 minutes, but we need you to do it in 60. Can you do that?”
“Well, I could,” you’d respond, “but let me tell you what it’s going to cost you. If I do it in 60 minutes, we’re going to lose about 30% in sales. I’ve got an average closing ratio of 20%. You’ve got 500 buying units here. My product costs $1,000.” Pause to do the quick calculation. “That means you, personally, would lose about $15,000.”
“Oh,” your promoter says as the figure sinks in. “Okay. You can have your 90 minutes.”
If your closing percentage were artificially low because you didn’t calculate it properly, you just wouldn’t have the same impact.
Sure, you could insist that they honor your contract, and you should if the situation warrants it.
But it’s far better to turn potentially awkward interactions into win-wins.
Know your numbers and show promoters that it’s in their best interest to give you the consideration you’ve earned.