By Sean Gordon, CEO of Intelliverse
Mid-year is a great time to go back to the drawing board to evaluate your mid-year sales figures and see where you truly stand. The good news is there’s still time to make some smart mid-course adjustments even if you may have made some bold and fearless sales forecasts back in December that are now lagging.
Whether you’re a novice or pro, there are key sales management metrics that can be used to measure and align performance to reach your desired outcomes and results. Key performance indicators (KPIs) are simple metrics tied to targets. They usually are shown as a ratio to let you know whether you’re on or off plan – so you can make adjustments accordingly.
Here’s a refresher of three key sales performance indicators (KPIs) that can be used to leverage internal data to boost revenue:
Sales leaders know it’s not just about what’s in the sales pipeline. What’s the point of a full sales pipeline if a large portion of the deals are stale or filled with stalled opportunities? This is why it’s important to see opportunities advancing through the various stages of a pipeline at a steady pace, and closing, closing, closing. That’s where pipeline velocity comes into play. It’s all about measuring how quickly deals are moving through the various sales stages.
Velocity is all about time. Knowing that, it’s a good idea to align your customer’s buying cycle times to your pipeline stages – and identifying where your tracking methods can be improved.
Company A – May need to reduce pipeline stages. If opportunities are moving rapidly through the sales cycle, it might make sense to have less stages in the sales process. This would not only help reps make clear choices on which stage to place their opportunities, but also would help the sales forecasting of the pipeline stages to be more accurate.
Company B – May need more pipeline stages for bigger deals that take longer to close. Additional stages can provide sales leaders with insight, since a lot can happen between the creation and closing of an opportunity. When the deals involve long sales cycles, and the big payoff makes it worthwhile, additional sales stages can help improve the overall measurement of how opportunities are progressing. This also helps identify bottlenecks more quickly – before sales get stuck in one stage for too long.
Lead Response Time:
How important is lead response time to your sales organization? According to a Harvard Business Review study, businesses that follow up on a lead within an hour were 7x more likely to qualify the lead and were 60x more likely to qualify the lead than companies that waited 24 hours or longer.
The faster a rep responds, the higher the conversion rate. Therefore, tracking your lead handle times is critical to the success of your sales organization. Why? If a sales rep responds immediately, the prospect while likely still be engaged in the thought process and will have a heightened level of interest in your business. However, if the rep is working on a proposal and decides to call later in the day, guess what’s likely to happen? By then the prospect, which may have very well been “your” [company] prospect has moved on to something else or worse, moved on to another company. That’s why the response time is so critical to measure – and to measure in minutes – as opposed to hours or days.
The bottom line is that when a new lead is ready to talk, your sales team needs to respond to that lead immediately and not risk the chance of having that lead slip through the cracks. By tracking lead response times, a sales organization can greatly improve its lead handling processes. If you want to make a good first impression and maximize each lead opportunity, you’ll want to track and optimize your lead response times.
Rate of Contact:
Creating more conversations with the right people is a leading indicator worth tracking to increase sales opportunities and ultimately, sales performance results. Since sales is a numbers game, it’s important to maintain a high outbound call volume to make this happen.
A study from AG Salesworks & BridgeGroup estimates for every 1,000 outbound calls made, sales reps should have generated 32 opportunities into the sales pipeline. How many outbound calls will it take your sales reps to create the best contact-to-opportunity ratio on a weekly and monthly basis? Once you have determined this metric and have it in place, you can then focus on the results to ensure the contact-to-opportunity ratio is working in your favor. If not, perhaps there is an opportunity to provide more coaching to see what can be improved, such as the pitch spot and address troubling trends. For example, if a sales rep’s log shows a high number of contacts but poor results, this may be a good opportunity to provide some coaching, Maybe all it takes is giving some pointers on overcoming objections or working on the pitch.
By leveraging your organization’s own historical data and analytics, you can measure and manage your sales organization’s performance with fact-based decision making to drive desired outcomes.
Sean Gordon is CEO of Intelliverse. Sean’s passion is ensuring that his customers and employees win every day. He drives Intelliverse to exceed the expectations of every customer with cloud communications solutions that leverage the most current technologies and are reinforced by a world-class customer experience. Sean joins Intelliverse from West IP Communications where he was most recently Vice President and over the past 11 years helped turn a $30 million dollar unknown company into a $1.5 billion industry leader. He has also held various leadership positions at AT&T, EMC and Nortel Networks Corporation. Sean holds a degree from the University of Connecticut and enjoys spending time with his two sons and coaching them in baseball and football.