In sales and business, there are a lot of metrics to track. It’s really a game of numbers, and you should have all the necessary data to make sure that you are on the right track in terms of sales and revenue growth.
Equally important to analyze are the sales metrics that track how you and your team are performing. In our white paper, “The Sales and Marketing Daily Checklist: What You Can Should Do Every Day to Close More Deals,” we discussed how important it is to review numbers and strategies every day. Having these sales metrics in place will help you perform this particular task efficiently.
Here are some metrics we recommend for you and your team’s improved performance and optimized sales activities, beginning with the prospecting stage—or lead generation.
LEAD GENERATION
- Sales Activity and Efficiency
You need to track your team’s daily activities. Usual activities include: calls, emails, conversations/interactions, appointments scheduled, sales presentations, proposals sent, leads sourced, and so on. Track how each team member does at each activity at a given period. It’s simple: If the team is not doing enough activities at a given period, you won’t hit your target. But it’s not enough to just track the number of sales activities, you also have to see the efficiency rate. They may be doing all the activities as mandated, but not getting anywhere.
The simple ratio is “activity:results”—so this can be number of calls to number of connects; number of meetings scheduled to number of opportunities; number of opportunities to number of deals; and so on.
By tracking activity and efficiency ratio, you can also see the problem areas—weak calls, bad scripts, wrong pitches—and address them.
- Time Spent Selling
Part of tracking sales activities is tracking the time spent selling—because time is very valuable in sales. Which activity takes up most of your team’s time? Is it in researching and sourcing leads? Is it chasing contacts trying to get an appointment? By tracking the time spent selling, you can address whatever is slowing down the team. A sales acceleration CRM, and specifically automation, can help you do this.
- Lead Response Time
How quickly do you respond to a lead? Normal business protocol requires that you reply within one business day, but in sales, the quicker you act on an inquiry, the better your chances of closing the deal. That’s because a customer won’t wait for you; there are other providers out there ready to pounce on an opportunity. By tracking your team’s lead response time, you can see who is lagging in speed and mediate immediately.
- Sales Pipeline Coverage
Sales Pipeline Coverage (SPC) tracks the frequency and number of leads added to the pipeline. You will be able to see if the team is doing well or badly, and if the existing number and frequency will help you meet your targets. Tracking your SPC also helps determine your lead conversion rate later on in the process. To calculate for SPC, you can divide the total pipeline coverage in a given time period by the sales quota for that same period. So if your quota is $100,000 and your pipeline so far is $200,000, your SPC is double.
However, it’s best to have at least an SPC of 5, meaning: in the above example, your SPC should at least be $500,000.
- Sales Funnel Leakage
There’s leakage in your sales funnel when leads are dropping out of it. It’s wise to track at which stage in the funnel you lose them. For example, if you see that leads are lost post-sales presentation, you can narrow down the possible reasons contributing to the dropped lead: Was it a bad presentation? Did the salesperson negotiate badly? Did he/she have a bad spiel/pitch? By tracking and knowing, you can address these setbacks immediately.
- Sales Qualified Leads
Sales Qualified Leads (SQLs) are prospects worth pursuing. Leads are usually qualified by determining the size of the prospect’s company, the point of contact’s decision-making power, their level of interest/engagement, or the project size, scope, and budget. Of course, higher SQLs help speed up the selling process and have more potential for revenue, so qualifying leads is paramount.
- Customer Acquisition Cost
There are related expenses to acquiring new customers: this can be advertising, digital marketing, brand activations, and so on. You have to know your Customer Acquisition Cost (CAC) because it’s the investment you made to get a customer, and you have to recover that cost. By tracking your CAC, you can manage your cash flow and do better projections for quotas, among others. To calculate for your CAC, just divide the total cost (that’s the total money, time, and resources spent) in a given time period by the number of customers acquired in the same period.
Next up, we’ll be defining our recommended pipeline sales metrics for when you're closing the deal. Read Part 2 here.
