Dangerous multipliers

Say you have 25 accounts in your territory, and you’re pulling in $50,000 a year.

Makes sense to think, therefore, that if you doubled it to 50 accounts you’d make $100,000 a year.

So why not ramp up to 100 accounts and make $200,000 a year?

Using the easy multiplying math, you only need 500 accounts to make a million bucks a year.

And of course, this is not realistic. There is no way to call on 500 accounts unless your product is 99.99% passive (selling business level cable TV and internet service, for instance. Once it’s installed and works there is little reason for the sales rep to ever step in again, and hence their commissons are microscopic).

Even the idea of doubling from 25 to 50 accounts to achieve double the income is dangerous. Your 25 accounts that make a solid base of commission for you right now cannot be duplicated easily.

The same trap applies to your wine portfolio. If you have 800 wines in the book, doubling to 1600 doesn’t double business.

The same trap applies to retailers. You don’t double business by doubling your staff or your footprint.

And the trap is not just when talking about x2 multipliers. Maybe it’s a multiplier of 1.1, a 10% increase. If you have 50 accounts, adding 5 doesn’t necessarily add 10% more income.

If a restaurant pours ten wines by the glass, adding two more doesn’t increase sales 20%.

Beward of planning and dreaming and thinking in multiples and multipliers. And be very aware when others try to shape your world through such talk. There is so much more to sales growth than overtly simple formulas.

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