There is a saying that goes “you can’t manage what you don’t measure.” Being aware of metrics is vital for every organization, particularly for metrics surrounding sales goals. Many organizations are very narrow in their approach to sales metrics, which could miss the larger story around performance and opportunities. For leaders to affect outcomes and drive growth, they need to look at the right indicators within the sales team.
The first metric that an organization should analyze is its leads. All leads are not created equal, and they shouldn’t be lumped together on sales reporting. Reporting should call out the number of qualified leads within the pipeline. What makes something a qualified lead will vary by business need and type. You should evaluate how the lead was generated and the specifics of the lead and their business. For example, a qualified lead might look like someone who has buying power within their company that personally reached out based on a relationship with someone within your organization. An unqualified lead might look like someone who filled out a lead form to be entered into a raffle. They might not have the authority or buying power or be interested in what your company has to offer. These two examples demonstrate why all leads aren’t the same and need to be reported based on their type. This additional detail in reporting will give leaders a much better understanding of how many leads could actually turn into customers.
You will also want to report out on where the lead is and how it is progressing. You can do this by creating stages or different classifications for where the lead is. For example, you can break into stages having the initial meeting with the client, meeting with the decision-maker, sending the contract, contract negotiations, and then converting by signing the contract to become a customer. Within each of these categories, you should also be tracking the activity that is happening with the customer. Activity metrics are a kind of sales metrics that measure what your sales team is doing every day. Examples of activity metrics are tracking calls/emails made, conversations, number of meetings, number of demos/presentations, etc. By being aware of what activities are taking place within your team, you can better manage the sales team to ensure that they’re doing what they need to do to manage and nurture leads actively.
Another valuable metric to look at is the performance by employee and then analyzing what that employee is doing that is resulting in success. For example, one employee may be closing 20% of their leads, whereas another only closes 5%. An additional metric to look at for employee-specific performance is attrition. Once you know who is successful and how your organization measures success, you can use a data-driven approach to replicate that performance in future hires. You can have the employee complete an employment assessment that measures how they are wired and then hire new sales team members based on that person’s profile. This data-driven approach will allow you to make the right hire that meets the needs of your organization.