Sales Metrics To Close More Deals
Selling can be full of positivity, nothing beats closing a sale, right? For every deal you close, you likely face countless unanswered calls and emails — not to mention uninterested or even hostile prospects.
“It’s not about having the right opportunities. It’s about handling the opportunities right.”– Mark Hunter
There isn’t a one size fits all approach to closing deals and that makes it tough to determine what’s working and what’s not.
The key to any sales environment is to have processes, systems and the ability to track your sales and pipeline activities, both on an individual and business-wide level. Without this you really have no idea of knowing what works, what doesn’t, where are the bottlenecks or issues occurring. Of course, who gets excited about dull and boring sales metrics and managing what’s happening in your sales environment, it’s much better to be selling and just closing deals – can’t agree more!
“If you can’t measure it, you can’t improve it.”– Peter Drucker
When you think about the famous quote from Peter Drucker, it should immediately become apparent how true it is. Because, if you can’t measure something, and define the measurable goals to establish the desired outcome, you can’t possibly get better at it.
How can Sales Metrics and Analytics improve sales performance?
Regardless of the priorities of your sales leadership, sales metrics should be monitored on a regular basis. Reviewing any metric in a silo, once a quarter, will not give you the information you need to make better decisions. There must be a disciplined approach to monitor the metrics and address what the data shows.
Sales metrics and analytics improves performance by revealing the strengths and weaknesses of individual sales reps and the sales team, thereby allowing sales managers to tweak processes, behaviours and sales strategy to ensure success.
In the remainder of this article, we want to share with you some important sales metrics that you should track if you are serious about raising your sales performance and results.
1. Lead to Opportunity Ratio
Lead to opportunity ratio is important efficiency metric. It tracks the number of leads that become opportunities. It might show you problems in your sales approach or / and might highlight problems with your lead generation activities.
The lead to opportunity ratio allows you to assess strengths and weaknesses of your team members involved in the sales process, providing you with the insight necessary to identify which members of your team need more coaching and guidance. Also, if you are finding your lead to opportunity ratio is lacking across the board, you’ll know you need to re-evaluate your sales process as a whole.
The problem of poor / low lead to opportunity performance could result from your marketing tactics and not attracting the right sort of customers. A lead, for example, is any individual who may eventually want to buy products or services from you. Leads, however, don’t always result in an immediate sales opportunity because the individual may not be ready to make a purchase right away.
Improve performance of how many leads you progress to the opportunity stage:
Investigate how you are qualifying your leads or/and generating your leads. It’s important to target the right audience/persona that have a need for your products and services and are good fit in terms of type of customer you can support. Also, validate how your sales process, sales team members, collateral and messaging are enabling a better qualitative and quantitative lead to opportunity conversion ratio.
2. Opportunity to Deal Ratio
This sales metric compares the number of deals won to the number of deals lost. The opportunity to deal ratio gives you a long-term snapshot of how successful your team is at closing deals given the number of leads they were given.
We know instinctively that we need to qualify our pipeline for best results. After all you cannot chase every deal with the same level of rigour and discipline. A systematic way to choose where to invest time and energy has been shown to be a key differentiator of high performing sales teams. So don’t hesitate to not bid for a deal and to say No thanks!
Improve performance of how many opportunities you progress to the Deal stage:
Dedicate a page on your website for users to book demos. Shortening the conversion path to the initial call can fast-track ideal prospects through the qualifying stages. Removing barriers in the early stages of the process takes the pressure off of closing the deal prematurely resulting in lost sales.
Regardless of the CRM system you choose, using one is definitely a best practice when it comes to managing your sales pipeline, opportunities, and process effectively.
3. Sales Pipeline Stage Conversions
Pipeline stage conversions are the points in your sales process where prospects are evaluated against criteria that determine whether they’d be a great fit as a customer.
A classic flow will help you see where your leads and opportunities are – Prospecting/Lead Stage, Needs Analysis, Value Proposition, Propose/Price Quote, Negotiation/Review, Deal Won/Lost
Having a repeatable sales process will ultimately allow you to measure your pipeline stage conversions and see where your opportunities are and where to put the focus… and so much more!
Improve performance of your sales pipeline conversions:
By seeing how your opportunities are progressing through your pipeline and pinpointing the stages where you have considerable drop-off, you can know how and where to start addressing the health of your sales efforts.
To effectively manage your pipeline, use the data you’ve gathered to identify your most promising opportunities and prioritize those. These may be the:
- Highest-revenue deals.
- Deals that are closest to closing.
- Deals with the most engaged decision-makers.
Regardless, the key to success is to have a process for recognising which opportunities need special attention.
4. Sales Pipeline Coverage Ratio
Pipeline coverage refers to the number/value of opportunities you have in your sales pipeline to ensure you reach your sales target.
The shape of your sales pipeline and funnel will tell you where your problems are. A fat in the middle funnel suggests a problem in converting opportunities to deals. A slim top of funnel means you’re lacking leads…a slim bottom of funnel means you’re going out of business soon!
Sales Pipeline coverage is the ratio you use to measure how much open pipeline you have, relative to how much sales quota you need to close. Sales Pipeline coverage is one of the better metrics for identifying which parts of the sales process reps need to focus on.
Strong pipeline coverage means they should be focusing their attention to activities further along the sales process, whereas weak pipeline coverage means sales team members need to work on its early stages — namely, generating more opportunities or marketing might need to be generating more leads.
Improve the coverage of your sales pipeline ratio:
Once you have your pipeline coverage ratio, have your sales team members adjust their day-to-day workflow accordingly. For example, if you’re noticing that you have weak pipeline coverage, have team members spend more time prospecting leads for a week or two. If your pipeline coverage ratio improves, you know that your prospecting goals for the next quarter should be higher to better support the pipeline.
5. Average Days per Sale for Won or Lost Opportunities
Tracking the length of your sales cycle with respect to won and lost opportunities can help you identify likely and high-risk buyers going forward. This kind of historical data can show how long prospects spend in specific stages before abandoning ship — giving you a picture of when an opportunity should be considered high-risk. It serves as a reference point for planning sales team members’ schedules and prioritising their time, so they don’t get hung up on deals that won’t close.
Sales organisations should also track the amount of time deals stay in each stage within the sales process. This will help them spot at-risk deals so they can determine whether the sales opportunities are stale and in need of purging or whether there are actions they can take to push them forward.
How to Improve Average Days Per Sale:
To keep your prospects engaged throughout the sales process, strike a balance between days where you reach out and days where you don’t. Leaving too much time in between touch points can add unnecessary downtime throughout the deal while reaching out too often can scare your prospect away.
25 Sales Metrics we recommend considering
- Annual Recurring Revenue
- Average Revenue Per User
- Quota Attainment
- Win Rate
- Conversation Rate
- Sales Cycle Length
- Average Deal Size
- Average Profit Margin
- Deal Slippage
- Churn Rate
- Net Retention Percentage
- Sales Productivity
- CRM Score
- Sales Linearity
- Calls To Connect
- Lead To Opportunity (1)
- Opportunity To Deal (2)
- Call To Deal
- Pipeline Stage Conversions (3)
- Quarterly Pipeline Growth
- Inflow/Outflow of Opportunities
- Pipeline Coverage and Shape (4)
- Average Days per Sale for Won or Lost Opportunities (5)
- Quarterly Sales Growth vs. Pipeline Growth
- Forecast Accuracy
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