One of the biggest mistakes a sales manager can make is to focus solely on quotas and revenue. While this adds to the bottom line, meeting revenue goals is also the hardest to sustain once the performance of your sales team dips.
Keep a steady eye on these numbers – yes. Because, ultimately they determine the survival of your business. However, also devote some of your attention to 6 key sales performance metrics that measure the effectiveness of your sales team.
These key sales metrics give you a purview of what really goes on with each closed deal and lost opportunity. You can then come in where there is room to improve; and create management strategies and goals that address your specific needs.
Key Sales Metrics 1: Lead Response Time
“The No. 1 key to success in today’s sales environment is speed. The salesperson who delivers the most valuable information to their customer or prospect first, wins the game.” – Dave Orrico, VP of Enterprise Sales at InsideSales.com
The life span of a lead – especially one that comes from your online channel – is short. Consider the accessibility of your competitors as the most serious threat. A prospect who reaches out to you with an email or a click of a button can do the same with your competition.
So, don’t wait a full day. Studies show that companies qualify leads seven times more likely when they get in touch within an hour of the inbound query. On the other hand, companies that wait a day are 60 times less likely to qualify inbound leads.
When you want your lead to take the next step with you, get in touch ASAP and provide them with the information they need.
Key Sales Metrics 2: Selling Time
A successful sales team spends less time on repetitive support tasks and more time on actual selling. After all, this is what they do best, right?
Information is one of the biggest hindrances when it comes to time spent selling. Research shows that sales reps spend almost nine hours each week just looking for information. Arguably, this is part of the sales process – your agent has to know who they’re dealing with, their pain points, etc. But, it is also something that can be done faster and more efficiently with powerful data-centric CRM integration.
Observe the selling time of your team. Or, have them log their daily tasks for a sample period. Then, analyse what takes them away from actual selling, and how much time is spent on these non-selling tasks. You can empower your sales team with tools that speed up these tasks.
Key Sales Metrics 3: Use of Marketing Materials
“The modern sales professional doubles as an information concierge – providing the right information to the right person at the right time in the right channel.” – Jill Rowley, Social Selling Evangelism & Enablement, Oracle.
Over the years, content marketing has increased in importance, especially when it comes to lead generation and client engagement. It follows that investment in content marketing has increased too, taking up around 16% of a company’s overall budget, according to the Information Technology Services Marketing Association.
The gap lies in the use of these marketing materials. The American Marketing Association has found that sales departments fail to use around 90% of marketing materials/ marketing content. This can translate to missed opportunities and sales funnel leakage.
A quick solution here is the implementation of a comprehensive sales content management system that allows you to track marketing material usage and push important content directly to your sales team.
Key Sales Metrics 4: Opportunity Win Rate
Consider the game of basketball. A dazzling player may amaze us with their dribbling and blocking skills. They might run the fastest and play the best defense. However, this doesn’t win the game. What wins a game is making a shot and landing it in the basket.
The same goes for sales. The most dazzling rep may have an impressive network. They may draft the best deals and work leads through the sales funnel like water down the drain. But, are they able to close sales?
Watch this metric and then spend time with your low-performing reps. Listen in to their conversations and provide feedback. Sometimes, all it takes to increase the win rate is a little coaching.
Key Sales Metrics 5: Sales Cycle Metrics
When you’ve been in business for awhile, you will notice patterns emerge from your team’s sales cycle. You can derive the average time it takes for leads to go through each stage of the sales funnel, according to the size of the deal. You can predict the likelihood of a win or sale.
Constantly monitor your sales cycle metrics to stay on top of your sales team. Use this data to streamline your efforts. Manage your team’s time by investing in leads that are more likely to convert into clients.
Your sales cycle metrics also gives you a glimpse of possible bottlenecks at each stage of the sales funnel. Is your team member devoting too much time stuck on the first stage with a single lead? Flag circumstances like this, and address the source of the bottleneck.
Key Sales Metrics 6: Sales Cost to Revenue Ratio
Each sale you make comes with a cost. This includes salaries and commissions, as well as the expenses incurred by your sales team. You also need to consider lost opportunity, or leads you forgo in favor of others.
What you get is your sales cost to revenue ratio. Use this metric to assess the overall efficiency of your team. Measure yourself against the industry average. How does your team fare? Do you need to invest in more sales training to improve the productivity of your team? How much additional investment – in training, manpower and the like – is necessary to achieve future revenue goals?
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