Joshua Melick Provides a Brief Insight Into Approaching Sales as a Science Rather Than An Art

No business can survive without making adequate sales. Hence, all companies must maintain the right approach towards it. A lot of people face confusion in regards to approaching sales as an art or a science. According to Joshua Melick , it would be smart to consider sales to be a science rather than an art. When sales people align their behaviors with science their interactions are enriched and so is their effectiveness. To effectively gain an understanding of the science side of sales, one needs to dwell on the factors of sales economics.

Maximizing their sales prospects must be a key priority of all entrepreneurs, regardless of the type of business they run. They ideally must firstly properly assess the worth of a customer to their business with the help of their Lifetime Value (LTV). In an ideal situation, you would want a 3X Customer Acquisition Cost (CAC) to LTV for your business. However, the calculation is not that easy. There are multiple important elements to be taken into consideration in this assessment, including CAC payback time, sales overheads, marketing spend, and more. Joshua Melick mentions that marketing can be even more complicated than sales, and it would be prudent for people to incorporate the majority of the marketing related tasks within their sales calculations itself. Joshua has an educational background in engineering and math, and therefore he strives to leverage his strengths whenever possible in his venture. He paid a good level of focus on getting the math right in the process of transitioning to an entrepreneur and sales leader.

Coming to the CAC calculations, Joshua himself likes to do the CAC and sales spend exercise in two separate ways. The first one is the top down method, and is easier than the second approach. In this method, a person has to take the whole department to spend on sales, marketing, and business development, and ultimately divide it by the number of new customers and sum of money closed during that period. In many causes, one may find an almost equal amount spend on sales and marketing during this calculation process.

Even though the top down approach does have its own benefits, Joshua Melick himself prefers the second method, which follows a bottoms up system. This system can significantly aid an entrepreneur to gain a good level of understanding about what exactly is going on with their venture. Joshua usually follows a unit economics type approach for the bottoms up method. There are multiple elements that go into the bottoms up budget, including the average commission rate per deal,

the amount of base salary going into each deal, the level of marketing spend allotted to each deal, and much more. To incentivize more cost-effective channels and cut down expensive ones, one needs to incorporate incentive-based plans and uncapped commissions into their business. This can lead to superior sales prospects in the long run.