Are you a data-driven sales leader? If so, you’ve realized that simply measuring revenue does little to inform or impact success. Rather, you must measure and optimize the actions and processes that lead to revenue. As such, there is likely a number of key sales metrics and formulas that you rely on a daily basis, from team capacity and call outcomes to lead source conversions and win rate.
Discovering the right sales metrics for your team takes time and patience, and even the best data-driven sales leaders sometimes find that they’ve missed a key calculation along the way. Here are three sales metrics that are often overlooked but can be critical to improving your sales productivity and performance.
Time to First Action
The instantaneous nature of social networks and Google search has accustomed consumers to receiving immediate answers and attention. In fact, it’s been proven that companies that are able to respond to leads within one hour are 7X more likely to qualify the lead as those that reach out after two hours.
Monitoring your sales team’s time to first action, or the amount of time it takes for your reps to reach out to a prospect once they enter your CRM as a lead, can offer actionable insight into how to improve your sales conversions. Identifying which reps are lagging behind opens the door to coaching opportunities, while recognizing those with the fastest response rates reinforces valuable behavior.
Taking this a step further and viewing time to first action by deal outcome enables you to calculate the ideal response windows for your reps.
Think about your sales funnel, which is essentially a visual representation of your sales cycle. Now imagine a handful of leads being dropped into the top or wide end of the funnel, and closed deals (both wins AND losses) falling out the narrow end or bottom of the funnel. If someone were to ask you why some deals fell faster than others and emerged as wins versus losses, how would you explain it?
The answer is, you’d have to guess, because you have no idea what’s actually going on inside the funnel. This is where stage duration comes into play. Stage duration refers to the amount of time each of your deals spent in a given stage of the sales pipeline, such as Qualified, Quote or Close. Conducting a stage duration analysis like the one below reveals where deals are getting stuck or lost in your sales pipeline so that you can improve your processes in these stages.
Digging further into this information also enables you to identify the types of deals that take longer to close than others, or are more likely to get stuck in a particular pipeline stage. It also enables you to calculate the win likelihood of a deal based on the amount of time spent in a particular stage compared to deals that have been won. This kind of information is highly valuable when it comes to knowing what deals to bank on and nailing that forecast.
Deal Loss Reasons
Frustrations aside, there is a lot you can learn from a lost deal. Rather than closing the books and moving on to the next opportunity, leading businesses take the time to compare won and lost deals to identify the key differences between the two. One way to do this is by defining a set list of reasons why a deal might be lost (poor follow-up, chose a competitor, price, etc.), and requiring all reps to choose a reason from this list each time it happens.
After a period of time, enough data will have been collected that you will be able to see which of these reasons are the root cause of your losses. Once you have this information, you can begin taking steps to turn these losses into wins.
For example, if you discover that you are consistently losing to a competitor, you can provide your team with more competitive insights and a fresh pitch deck. On the other hand, if you were to find out that you were being consistently outsold on product functionality, you may dig into what exactly these lost prospects were requesting, and then get with your product development team to make it happen.
Metrics Made Easy
To aid businesses in ensuring that key metrics such as these are not overlooked, some CRMs and sales platforms offer the ability to generate pre-built visual reports in just one click. To learn more about these types of metrics and reports, download our free white paper, Understanding the New Metrics of Sales.
Source: Business 2 Community