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In this video tutorial, Ted demonstrates how to convert letters to numbers in Excel, specifically using a formula where A=1, B=2, and so on. He explains that the key function to use is "CODE," which assigns a unique numerical code to every character, including letters, numbers, and special characters. Ted highlights that understanding this function is crucial as Excel operates on numerical values for processing. He has a spreadsheet prepared to illustrate the steps involved in making this conversion. The tutorial promises that the process is straightforward, focusing on the correct application of the CODE function within the Excel environment.