Call Economics Reverse Engineering
Translate each rejection into measurable progress toward the next transaction
- Difficulty
- Easy
- Time to result
- ~days to results
- Steps
- 5
- Confidence
- 95%
David Temko describes re-engineering the math from a completed loan or transaction back to the number of calls required to produce it. First estimate the commission from one deal, then determine how many calls typically lead to that outcome. Dividing the commission by the call count gives an expected value for each call and turns a revenue objective into a daily activity target. Temko says this framing lets a caller interpret a rejection as another small increment of progress rather than as wasted effort. He illustrates the mindset by thanking someone after a no because the call has still earned an expected amount in the model. He also acknowledges that the exact value depends on how effective the person is on the phone, so the calculation should be grounded in observed performance.
Origin
Extracted from Coffeez for Closers. David Temko recalled learning commercial real estate in a boiler-room environment where prospectors built a database by repeatedly calling.
Core principles
- 01Historical conversion rates can turn a revenue goal into an activity target
- 02A rejection still advances a rep through the calls required for a transaction
- 03Knowing the expected value of a call makes persistence concrete
- 04The calculation must reflect the caller's actual effectiveness
How to run it
- 1
Define the deal value
Choose a completed transaction and estimate the commission it produces. Use the amount the salesperson can realistically attribute to that outcome.
Watch out Do not use gross deal value when the relevant reward is the salesperson's commission.
- 2
Measure calls per deal
Count how many calls are normally required to produce one completed transaction. Base the estimate on the actual caller or team whenever possible.
Pro tip Separate raw dials from genuine conversations if that distinction materially changes the conversion rate.
Watch out An invented conversion rate creates a misleading activity target.
- 3
Calculate call value
Divide the expected commission by the number of calls required for a deal. Use the result as the expected economic contribution of one call across the funnel.
Pro tip Keep the figure visible during a prospecting block to make progress tangible.
- 4
Execute the activity target
Make the required calls while treating each no as one step through the modeled funnel. Continue until the activity target is complete rather than stopping after individual rejection.
Pro tip Temko frames a rejected call as having earned its expected contribution before moving to the next one.
Watch out The model supports persistence; it does not excuse poor call quality.
- 5
Recalibrate with results
Compare completed transactions with the calls actually made and revise the calls-per-deal assumption. Let current performance improve the next target.
Watch out Market conditions and caller effectiveness can change the economics.
In the wild
Temko says a salesperson can estimate how many calls produce a deal, connect that deal to its commission, and reverse engineer the value of each call. After a prospect says no, the caller can thank them and mentally credit the expected value before continuing.
→ Rejection becomes a measured part of the conversion process rather than a reason to stop prospecting.
Common mistakes
Guessing the conversion rate
Temko says the economics depend on how effective people are on the phone, so a generic number may not describe the caller's funnel.
Treating every no as failure
In the model, each call is one of the required inputs for eventually producing a completed transaction.
Is it for you?
Best for
It is best for salespeople with a trackable phone funnel and enough past activity to estimate calls per completed transaction.
Not ideal for
It is not ideal when conversion data is absent or when calls vary so widely in quality that one average hides the real funnel.
From the transcript
“you could you know re-engineer the math how many calls it takes to get a loan or get any transaction”
“I know that it's going to take this many calls to get to a deal which means this much of a commission and then reverse…”
“I don't know what that is how how effective people are on the phone but that's the way it works”
From the episode
Getting to Know David Temko