If you wait to judge success on whether or not there is a sale, you’re already too late. You have to measure the effectiveness of the process that leads to the sale so you can improve your sales strategy at its weakest point. This post will provide five important sales metrics that you should be tracking to measure your sales team’s progress: retention, average number of calls to close a deal, customer satisfaction ratings, sales cycle, and activities vs. outcomes.
An article about meaningful sales metrics advises that mangers keep sales reps aware of the rate at which the company is adding and losing customers. The business can’t grow unless you know customers are coming back. Have each sales rep report on their active and inactive customers. These numbers help determine the product’s or service’s market appeal. If a company loses touch with the bulk consumer market, there is potential for sales disruption. While shedding less profitable customers can help reps maintain earnings at the moment because they aren’t wasting time with unqualified leads, watch out. Dumping too many “potential” consumers can prove disastrous.
2. Average Number of Calls to Close a Deal
Inside sales reps rely on making phone calls to make their sales. By realizing how many phone calls it takes reps to close each deal you can give them tools to make each call more efficient so they can work with more customers. CSO Insights Telemarketing/Inside Sales Performance Optimization: 2010 Key Trends Analysis cites the following statistics:
As is shown here, the vast majority of sales are made after 3-9 calls between the sales rep and the consumer. Each sale takes a lot of effort on the part of the rep, but if managers track each call they can help their reps to work more efficiently. Improved training processes can lessen the amount of calls sales teams must place. HubSpot suggests using social media to better prepare sales reps before they make sales calls. The less calls reps need to make a sale, the more sales they can make!
3. Customer Satisfaction Ratings
Satisfied customers are returning customers. A blog post on The Sales Challenger suggests having sales reps conduct a quick survey of customers. Ask about satisfaction with previously purchased product or service. Ask if they are interested in learning about your new offers. Ask if they would recommend your company’s products or services. This data is easy to collect and analyze, and it forces the sales team to focus on the customer relationship. Net Promoter is a management tool that can be used to gauge customer loyalty quickly. Net Promoter asks customers to rate on a scale of 0 to 10 how likely they are to recommend the product or service. The program then categorizes responding consumers: Promoters (9-10), Passives (7-8) and Detractors (0-6), and a Net Promoter Score is then calculated by subtracting the number of Detractors from the Promoters. Companies can also ask customers to elaborate on their response and explain why they would or would not recommend the product or service.
4. The Sales Cycle
Track how long it takes an individual rep to resolve a single deal. The Sales Challenger advises that this time frame can serve as an indicator of the market and consumer demand. If there is an improvement in the sales cycle this could be an indicator of increased demand or latent demand. If the sales cycle slows, then the market has slowed and research should be done to determine if there has been a change in consumer preferences.
5. Track Activities vs. Outcome
If you set a goal for your sales reps to generate $1,000,000 in sales revenue this year, set strict guidelines for the process you want your sales team to follow to reach that quota. Marci Reynolds sets up this process nicely by suggesting the following process goals:
- Make X customer contacts per day, month, quarter
- Build X dollars of sales pipeline
- Cross-sell product X to customers already using product Y
- Increase face to face customer visits by X% compared to 2010
By focusing on metrics other than sales revenue will allow your sales team to focus more on the process of conducting each sale rather than solely closing the deal. Emphasizing these steps within the sales process will bring your sales reps back to the core of selling: their individual relationship with each customer.
Have new and easy metrics with which you measure you sales team? Share them in the comments.