In a recent seminar about “Building a Sales Management Function” that I was honored to facilitate, we talked about what metrics matter to an organization that wants to be forward thinking and use leading indicators instead of the traditional “Postmortem” metrics that most companies use. Looking backwards is fine if you are alright with using your rear view mirror to drive forwards, but companies that are focused on sales growth should be using a different set of Metrics. These seven metrics are both useful for production and for a sales management function to identify coaching opportunities for better sales performance.
These seven sales metrics are key to effective sales management for organizations focused on growth:
1. #of Face-to-face meetings with “new qualified targets” (not prospects or leads) regarding new opportunities
2. # of two-way phone or email conversations with “new qualified targets” regarding new opportunities
3. # of Face-to face meetings with existing clients regarding new opportunities
4. # of two-way phone or email conversations with existing clients regarding new opportunities
5. Amount of new opportunities added to their sales funnel
6. The # of actions that moved existing opportunities through their sales funnel
7. The amount of new business that closed from their sales funnel
These seven sales metrics will help identify how effective a sales rep is at both finding new business (volume) and moving business through the sales funnel (velocity). These seven sales metrics will also provide your sales management function with the information and business intelligence they need to coach your sales rep for better performance once you bench-mark them.
What questions would you ask as a sales manager to coach your sales reps once you have bench-marked these sales metrics?
1. How can we increase the average value of the new opportunities you find in new clients and existing clients?
2. How could we decrease the length of sale from 6 months to four months?
3. How can we increase the amount of opportunities in existing clients?
4. What else do you need to help add volume to your sales funnel?
5. What are the objections you are getting from clients and how are you navigating them?
6. What do you need to do differently next week to get better results?
7. How can I help?
You cannot manage want you do not measure and what you measure gets done, so what are you measuring and what else do you need to start measuring? A good sales management function will help their sales reps put money in their pockets so everyone is happy. I guarantee your sales reps want to know the measuring stick and know that someone wants to help them.
Please feel free to contact me if you need help identifying what sales metrics makes sense for you to measure for growing sales and how you can start using them to improve your sales performance.
Do any of these sound familiar to you?
- You do not have regular sales meetings.
- A member of your team quit and you have no CRM to access account information.
- You spend less than 60% of your time with customers.
- 20% of your selling efforts accounts for 80% of your sales.
- You recently lost sales because you did nothing.
- Your sales cycle is longer than last year.
- Your customers are buying less.
- Less than 25% of your sales come from new customers.
- You have seen less than 4 customers and prospects in the last week.
- You do not subscribe to any sales blogs or read any books on new ways of doing things.
If more than 3 of these reflect your organization’s selling function, you may want to consider making some changes to your selling processes, changes to your structure, changes to your compensation plan, and investing in some training.
With sales cycles getting longer, understanding the problems you are faced with will help you change the way you sell for faster sales.
1. Your sales process is not aligned with your prospect’s buying process. Most companies design their sales process on how they sell to the market without regard to how the market buys from them. If you start to think as a buyer, you would be able to identify potential obstacles earlier in the sale and develop solutions around them.
2. You do not follow your process. When you do not follow all of the steps when building a model or replacing your brake pads? What if pilots and surgeons ignored their processes and checklists? Experts say that it takes 10,000 hours to master your profession, so until then you should probably follow the steps.
3. You have not created a sense of urgency by discussing “risk” with the buyer. The best question you can ask if you feel an objection to your solution: “What is the cost of not doing this?” If you can you’re your prospect that the rewards outweigh the risks, you will help them say “yes” faster.
What steps should you take to correct these problems?
1. Define how your customer buys. If you ask “What would you like to see from me to help you make your decision”, you will save a lot of time trying to figure out what they want.
2. Have a goal for each and every sales call. When you understand all of the stages a prospect goes through in their buying process, you can identify milestones that need to be met for the prospect to reach the next stage. What needs to happen in your next call or meeting to make that happen to keep the sale moving?
3. Talk about rewards with your prospects. Companies are always concerned with committing funds to something that is not necessarily tangible. Help your prospect understand the opportunity costs of not saying “yes”.
By aligning the way you sell to the way your prospects buy, following a repeatable process, and helping the prospect see the rewards of saying yes, you will close sales faster.
In how many sales meetings this week is the owner looking at the sales funnel and scratching their head about the lack of movement of opportunities from one stage to the next? There seem to be plenty of opportunities and potential clients out there so what is the problem?
I guarantee it is a lack of proper qualification of the opportunity to begin with. The sales funnel needs to be cleaned up and by asking some basic sales leadership questions, you can help coach your team to identify the true opportunities to potentially “move the chains” and take them to the next level.
- Who is the potential client?
- What do they actually need and want?
- How do they make decisions?
- Who are the stakeholders?
- What other options does the potential client have?
- What is a clear next step that we need to do now to move this forward?
Many sales people can’t say “no” to potential opportunities and clients even though they are not ideal prospects. This causes their sales funnel becomes full of opportunities that get stuck at the proposal phase because they have no clue what to actually offer to them.
If you are looking at the sales funnel and can’t understand why the actually sales are not happening, try drilling down deeper into each opportunity with these questions to coach your team to move their chains.
If you need help integrating some of the best practices to help coach your sales team, please contact us to schedule a SWOT analysis of your sales structure, sales process, and sales skills
Many organizations are unable to grow fast enough because their sales teams spend too much time with opportunities that are wrong for your business.
Have you ever:
- Thought your weekly sales funnel reviews are the same week after week with no progress?
- Been tired of hearing phrases such as “They asked me to stay in touch” or “They are still deciding”?
- Believed your sales efforts are focusing on prospects that you do not want to do business with?
The simple fact is that sales people hate saying “no” because they believe they can every opportunity they find and hence every opportunity they find becomes a prospect of some sort. This leads to waste of time and efforts on opportunities that will never close, your opportunity funnel becomes clogged with bad prospects, and your business does not grow. I guarantee these opportunities were never a good opportunities to begin with because you have not identified the characteristics of your good clients and what a good opportunity looks like to your organization for the sales team to call on.
What was done by the salesperson to identify the opportunity as ideal? What questions were asked to qualify the opportunity? Can your organization even identify what an ideal client is and what an ideal opportunity looks like to help your sales team target better opportunities?
If a company is able to define what an ideal client looks like, then the marketing and sales efforts are able to work more efficiently because selling time is only spent on qualified opportunities that match the characteristics of your ideal clients. Additionally, your operations should perform better because you are only doing business with ideal clients that you are meant to be serving.
Should your ideal clients be of a certain size? Should they have certain annual revenue? Should they be able to purchase one or more of your products or services? Should they have a certain structure? Should they have a certain credit rating? Should they be able to lead you to more business?
By identifying your ideal client characteristics, you will be able to identify what an ideal opportunity looks like and hence your sales team will be able to identify where their time should be spent and become more efficient with closing more ideal clients to grow your business faster.
There are many CRM systems that measure the “Probability to Close” metric of a sale for our organizations. There are also many discussions on social media about how we can effectively measure the likelihood that a particular piece of business that we are chasing will become reality for the organization. This potentially creates a problem for our organizations when that particular piece of business might not actually become a reality at all. How can our organization effectively plan resources based on a “Whim” that is entered without a factual basis by us?
As sales people, our organization trusts that we are bringing qualified opportunities that will close within a given amount of time so they can plan on delivering the goods and services that we are selling to make the customer happy and deliver a profit for everyone involved.
What criteria do we use to measure probability for our organizations? I would offer the following criteria to ensure the proper amount of resources are dedicated to the proper opportunities that we deliver. We need to answer the following criteria that define the actual sale and assign a value to it to ensure success for all of the stakeholders. The criteria is known as “BANT”
Budget = 20%: Do the prospects have the budget to purchase what we are offering to them as a value?
Authority = 20%: Are we speaking with the decision maker(s) that can purchase the product or service that can add value to them?
Need = 20%: Do they need what we are offering as a product or service and can it add value to them?
Timing = 20%: Can they purchase the product or service that we offer within a given timeframe that will produce value for both stakeholders?
The remaining 20% is all “Us”. Are we and our company a credible source of the product or service that will bring them the identified value in the time frame that they expect instead of the competition that they have also met with? I guarantee you that we are not the only choice they have!
Most of us do not ask the right questions to discover the “Budget” before we present a solution and then are surprised by a response from the prospect that they can not afford our product or service. How do those sales meetings and reviews work out for us after the time and resources you have spent chasing the business?
By using the above criteria to measure our opportunities, we can ensure that the organization will align behind us to deliver the necessary resources for the qualified opportunities that we are delivering. Don’t miss the “B”!
The question “How do we grow sales quickly?” is asked in every business on a weekly basis. The easy answer for us is that you would not have to ask that question if your sales function was doing three simple activities on a regular basis.
Asking for additional business from existing clients
When was the last time you met with your top clients to review the current business you were doing with them, showed them what else you could do for them better than others, and asked what they were planning that you might be able to help them with?
Asking for referrals from existing clients
Your clients have stayed with you for a reason. When was the last time you asked them who they knew in the industry that you could help as well and who else they do business with where you might be a fit?
Asking for new business from other “ideal” future clients
Can you identify your best clients and why you have been able to be a partner with them? Take your success and replicate it by producing a marketing piece about why people do business with you and send it to other “ideal” prospects with a call to action about engaging you.
These simple activities are often overlooked because businesses get caught up in their business and do not focus on them. Make these activities part of your regular sales meetings and their will be no need to have conversations about how you can grow sales quickly.