I've sat over ten thousand kitchen tables. I ran sales floors for other men and then for myself for the better part of four decades, and I'm telling you that up front because this is the block where I have to walk into the room where I grew up and start asking it rude questions. The sales floor is my home floor. Which is exactly why I know where it hides things.
Block Five is six questions, aimed at the GM and whoever runs sales, and the first one is the biggest question in the book, so we're going to take our time with it. It comes in three parts — leads, appointments, sales, by salesperson — and it ends at one number that outranks every other number on the sales floor. I'll build up to it, because to trust the number you first have to watch me fight about the denominator.
For each salesperson: leads issued, appointments run, net sales written — and the number that falls out of them, NSLI: net sales per lead issued.
What's your time to close?
How often is financing required, and on which products?
What deposit do you collect up front, and on what terms?
How fast do you actually collect?
And a theory to test: the more you have to discount to close, the more of a pain the customer turns out to be. True, in your gut?
Close rate, to issued lead. Every sales manager in America knows his close rate, and almost every close rate you've ever been quoted is fiction — not because anyone's lying, but because everyone gets to pick their own denominator, and the denominator is where the fiction lives.
Let me show you the machinery. A lead gets issued. Maybe it confirms, maybe it doesn't. Maybe the customer's home when the salesman arrives, maybe not. Maybe both spouses are there — a real sit — or maybe it's a one-legger. Maybe it's "demo-able." Every one of those steps is a place where a lead can quietly exit the denominator, and every exit inflates the close rate of everything downstream. A floor that closes thirty percent of issued leads and a floor that closes thirty percent of qualified demo'd two-party sits are not in the same business. The second guy has laundered half his failures out of the math before the counting started.
There's a famous number in our industry — a legendary closer whose 92 percent everybody has quoted at some point at some conference. I have no quarrel with the man or the number. But the 92 was to sits — and to sits, it's believable for the best who ever did it. Nobody closes 92 to issued leads. Nobody ever has. If you hear a close rate over about 40 and nobody's specified the denominator, you're listening to a story, not a statistic.
So the exam takes one denominator and never lets go: issued leads. A lead issued is a dollar spent — you paid for it in Block Three money whether anybody sat it or not. Close rate to issued lead is the only version of the number that connects the marketing spend to the signed contract with no laundering in between. It will be lower than the number your sales manager is proud of. It's supposed to be. It's the real one, and it's the one that makes the CPA math from the lead-engine chapter actually compute. Stated, to verify — and this one verifies clean, because contracts and lead counts are both in the books.
But close rate — even the honest one — is still only half a number. And this is where I stop renovating the industry's math and hand you mine.
NSLI: net sales per lead issued. Take a salesperson. Count every lead you issued to him this year — issued, that's the whole religion. I don't care if it sat. I don't care if it confirmed. I don't care if one leg was home or both or the dog answered the door. The lead was given to him, it counts. Now take his net sales — written business, less the discounts, less the cancellations — and divide. Dollars of net sales per lead issued. That's NSLI, and it is the single most important number on your sales floor. Not close rate. Not average ticket. Not "he's a great closer." NSLI.
Here's why it outranks everything. Close rate and average ticket are each half a story, and salesmen are gifted at telling you whichever half flatters them. The guy who closes 40 percent by dropping his pants on price looks like a hero on the close-rate report. The guy who closes 22 percent at full retail looks like a problem. Put them both through NSLI and the report flips: the "hero" is netting $2,800 a lead and the "problem" is netting $4,400. NSLI is close rate times ticket times discount discipline times cancellation rate, all collapsed into one number that can't be gamed, because the denominator is money you already spent and the numerator is money that actually stuck. Every excuse a salesman has ever given you lives in the steps between issued and closed — the no-shows, the one-leggers, the "it wasn't demo-able." NSLI doesn't argue with any of it. Over enough leads, it all comes out in the wash. Every rep catches roughly the same share of dead appointments and one-leggers. If his NSLI is low over a hundred issued leads, the leads aren't the problem.
And here's the part that makes it a management tool instead of a scoreboard: you can forecast a salesperson's profitability with it, to almost zero error. The threshold moves by product — a sunroom floor and a gutter floor don't share a number — but in the lines I ran, the line was roughly $3,500 to $4,000 net per lead issued. Above the line, that salesperson is making you money every time you hand him a lead, and you should be finding him more of them. Below the line, every lead you issue him is a lead you paid Block Three money for and then paid again in the opportunity it cost you — because that same lead in the hands of your over-the-line closer had real dollars in it. Know each rep's NSLI and your CPL from the lead-engine chapter, and the whole floor turns into arithmetic: this rep, times this many leads, equals this much net. No gut feel. No "he's due for a big month." Multiplication.
That's why the worksheet for this block leads with a grid, not a blank: every salesperson, leads issued, appointments run, net sales, NSLI. Run it for the trailing twelve months. I have watched that one grid reorder a sales floor that a decade of contests and pep talks never touched — because for the first time the owner could see, in dollars per lead, who was actually worth feeding.
Time to close. Days from issue to ink. Owners underestimate this one chronically, because memory keeps the one-call closes and forgets the ninety-day grinders. Why it matters: time-to-close is follow-up load, and follow-up load is where sales floors quietly die. A floor that closes in one sit runs on skill. A floor that closes in five touches runs on systems — and if the rehash discipline lives in your salesmen's personal habits instead of in a system, then your pipeline is evaporating in the gap between appointments, invisibly, every single week. We'll come back to that leak at the end of this book, because it turns out to be the most fixable number in the whole exam.
Financing. How often, and on which products. Two reasons this is here. First, financing percentage by line is a customer X-ray: it tells you who's actually buying each product — cash-rich retirees, payment shoppers, move-up families — which sharpens everything the lead engine thinks it knows about targeting. Second, financing is margin with a toll booth on it. Dealer fees come off the top, approvals stretch the close, fallouts kill signed deals weeks after the high-fives. A line that closes heavy on paper carries costs and cancellation risk that the sales meeting never discusses. The books know. We'll ask them.
Deposits and terms. What do you collect at signing, and what's the schedule after that? I've watched owners get talked down from thirty percent to ten to "we'll bill you at completion" one competitive concession at a time — and each concession moves the job further onto the contractor's money. You're not just building the customer's sunroom. You're financing it while you build it. The deposit question tells me whose cash is actually funding the work-in-progress on your schedule board, and for the shops that answer it badly, it explains a mystery they've lived with for years: profitable on paper, broke at the bank.
Collection speed. And then the number nobody tracks and everybody feels: how many days from finished to paid. Not terms — actual days, job by job, in the books. Because a job isn't done when the crew leaves. It's done when the money clears. Every day in between, that job is an interest-free loan you made, and some lines and some customer profiles borrow a lot harder than others. When we score the year, collection speed gets folded into the real economics of every line — and it regularly demotes a "great" product two or three spots in the ranking once its receivable tail gets weighed.
I want to press on these last two questions harder than the others, and I've earned the right to, because the float is the thing that finally got me. I told the whole story in my first book, so here's just the business-school version. A sunroom company runs on float by design: you carry inventory, you carry receivables, you carry work-in-progress on your own money, and in normal times the float is fine — you sell what's on the trucks, you bill, you collect, you pay the manufacturer, the cycle compounds. I ran one of the largest single-market sunroom operations in the country on exactly that cycle. Then 2008 arrived, the phone stopped ringing in a single October week, and every dollar of float converted from working capital into debt with my name on it — about two million dollars of it, on a company that had been profitable. Understand what that means: the P&L never fired a warning shot. The kill shot came entirely from the questions on this page — whose cash carries the work, and how fast does the money actually land. Profitable on paper, dead at the bank isn't a figure of speech to me. It's a year of my life. In good times, weak deposits and a lazy receivable tail cost you margin you never see. In the bad year — and the bad year always comes — they're the difference between a company that shrinks and a company that ends. So when the exam asks how fast you collect, don't give me the terms off your contract. Give me the days. The days are the fuse.
Now the theory. I saved the last question for its own section because it's the one owners argue with — right up until they check it.
Here it is again: the deeper you have to discount to close a customer, the more of a pain that customer will be for the rest of the job.
Every veteran closer already believes this. Ask your floor tonight; watch them nod. The customer who beat you up on price at the kitchen table doesn't stop being that person when the contract's signed. The negotiation was a preview of the relationship. The full-price customer bought your value; the hammered-price customer bought a victory, and a victory needs defending — so here come the change-order fights, the punch-list wars, the slow-walked final check, the review held hostage over a screen door.
That's the gut version. Forty years of kitchen tables told me it was true. Here's the beautiful thing: your books can actually test it. Take every job in the year and line up discount depth against the trouble that followed — change orders, honest callbacks from the last chapter, collection days from this one. If the correlation's there — and I'll just tell you, it usually is — then your discount policy has been quietly selecting for your most expensive customers. Which flips the whole meaning of a discount. It was never just margin you gave up at the table. It was margin you gave up at the table plus a premium you paid to acquire a harder job. The discount is a price you pay twice.
And once an owner sees that on paper — his own jobs, his own discounts, his own service log — the conversation about holding price stops being a pep talk and starts being arithmetic. I've watched that one page fix sales floors that a decade of rah-rah meetings couldn't touch. The books don't have feelings, but I've seen them end a fistfight.
Now, before your sales manager uses that theory to outlaw every discount in the building, let me draw a line — because there's one discount that doesn't select for painful customers, and I've been giving it at kitchen tables for forty years. I told you in Chapter 3 that the thing I carried out of that Sears floor was the initial visit discount. Here's how it actually worked, because the difference between this and the discount we just convicted is the whole point.
It starts at the top of the appointment with an innocent throwaway. Could I have a glass of water, please? Whoo — it's good to get off the road for a minute. I've been averaging twelve, fifteen hundred miles a week. We cover from the Florida border to upper South Carolina. Then you let it go. If they ask, you tell them a little more. You've planted a seed and moved on.
Two hours later, after the summation, you ask: other than price or payment, is there any reason we couldn't get started today? No — no reason. Good. So if I'm hearing you clearly — if I can get the price right, you'd like to move forward, right? Second confirmation. Great. You're gonna love this. Remember when I was telling you how much we travel? They nod. And now you draw it — cities on a legal pad, lines connecting them, and they can see how much of your life is windshield. Time is your most valuable commodity, and you just made it theirs to look at.
Then the scenario. Imagine we get to the end of the month. People start calling back at the end of the sale — it always happens that way — but we already have appointments set. Just like yours. How long have you been waiting? A week? That's a while. How would you have felt if I'd called an hour ago and said, hey, I've got someone across town ready to sign a contract, I need to go see them — I'll come see you next week? Not very happy. Right. But if we don't go get the business, they might not wait. You can see the problem.
They can. Everybody can. So here's the offer: if you like everything, and the price is right, and we can take care of the paperwork while I'm here — we save you an extra ten percent. An efficiency discount. Does that make sense? Retail, less the advertised savings through the end of the month, less ten. Sign tonight and the second trip never happens.
And here's why this survived my own theory: it's a real discount. If I have to see every customer twice, my most expensive resource — a closer's day — gets cut in half, and you can see the conundrum from the driveway. The negotiated discount rewards the customer for beating you up; the structural discount rewards them for saving you a trip you'd otherwise have to bill everybody for. One selects for combat. The other selects for decisiveness. Same ten percent on paper, opposite customer on the schedule board. Most of them laid down right there at the table — and they were the easy jobs afterward, not the hard ones. Your discount question on the worksheet isn't "do you discount." It's "what is your discount paying you back for?" If the answer is nothing — if it's just where the negotiation ended — the books will show you what it's been costing.
That's the money block. NSLI by salesperson — the one number that forecasts a rep's profitability to almost zero — close rate with an honest denominator, the speed of the close, whose cash carries the job, how fast it actually lands, and a theory about painful customers that your own history will confirm or kill.
Notice what we just did across these last three chapters: we followed a dollar all the way through your company. Block Three paid to make the phone ring. Block Five turned the ring into ink and the ink into cash. Block Four built everything in between. Every stated number flagged, every belief on the record, every reality pair waiting on the books.
One block left. It's the shortest one, and it's the one that cuts closest to the bone — because it's not about your leads or your crews or your closers. It's about the work itself. Which of it you were built to do, and which of it you've just been doing.
WORKSHEET — BLOCK FIVE: Sales & The Money
Stop here. GM and sales in the room. Two ground rules. First: the denominator is issued leads — issued, not sat, not confirmed, not demo'd. Anybody who launders the denominator gets sent back to their desk. Second: net sales means written business less discounts less cancellations. Full-size sheets — including the NSLI grid — at myeasysystem.com/worksheets.
In the room: GM + Sales.
22. The NSLI grid — trailing 12 months, every salesperson:
| Salesperson | Leads issued | Appointments run | Sales closed | Net sales $ | Close rate (to issued) | NSLI ($ net ÷ leads issued) | |---|---|---|---|---|---|---| | ____________ | ______ | ______ | ______ | $ ________ | ______ % | $ ________ | | ____________ | ______ | ______ | ______ | $ ________ | ______ % | $ ________ | | ____________ | ______ | ______ | ______ | $ ________ | ______ % | $ ________ | | ____________ | ______ | ______ | ______ | $ ________ | ______ % | $ ________ |
Your over-the-line number for your product (roughly $3,500–$4,000/lead in most lines): $ ________ Reps above the line: ____________ Reps below: ____________
23. Time to close: ______ days 24. How often is financing required, and on which products? ______________________________________________ 25. Deposit collected up front + payment terms: ______________________________________________ 26. How fast do you actually collect? ______ days 27. [BELIEF] Theory to test: the more you have to discount to close, the more of a pain the customer is. True in your gut? ______________________________________________
The grid in question 22 is the whole chapter. A rep's NSLI over enough leads forecasts his profitability to almost zero — no-shows, one-leggers, and dead appointments all come out in the wash. Question 26 is the quiet killer: "sold" is a feeling, "collected" is a number.
From The 48 Questions No Marketer Ever Had the Guts to Ask You. Read Chapter One free →