However successful your sales and marketing efforts, you probably wish you could turn more prospects into clients.
You’re not alone. Only a fifth of businesses are satisfied with their conversion rates, according to Econsultancy. When it comes to closing deals, every sales team could be doing more.
Yet despite this, too many companies are failing to adequately monitor their sales performance, preferring to focus on vanity metrics and numbers that provide commentary but no insight. If you want to truly understand the effectiveness of your sales efforts, you need these five metrics on your dashboard now:
1. Leads by source
Your sales and marketing teams are using a range of prospecting methods to keep your pipeline full. But which ones are working best? And which aren’t delivering the results you need? Tracking leads by source will help you identify which platforms or marketing initiatives are delivering value.
As ever, drilling down into the numbers will provide greater insight. Perhaps a certain tactic - personalized email shots or targeted social ads - work best for targeting clients in a specific sector. Detail such as this will allow your sales team to tailor their approach to each prospect.
Additionally, measuring leads by source gives you clarity around which leads should be contacted first by your sales team and which will require a little more nurturing.
2. Lead conversion rate
Generating quality leads is only part of the battle. However full your pipeline, it counts for nothing if you aren’t closing enough deals.
That’s why it’s vital to track your lead conversion rate over time. Fluctuations in performance will give you the insight required to iterate on your sales tactics.
For instance, does your conversion rate increase when you’re targeting a certain type of client? Perhaps you convert more leads when you’re speaking to prospects with a specific job title or level of responsibility? Tracking this metric allows you to hone your team’s approach to deliver the best results.
3. Cannibalization rate
Every sales manager can relate to the challenge of product or service cannibalization.
You’ve launched a new innovation - something that sets you apart from the competition - and your sales team are fixated on discussing it with clients. But is it actually delivering an upturn in revenue, or is it just eating into your existing sales?
Monitoring the cannibalization rate will help you decide whether a new product needs a bigger sales push, or whether it’s time to scale back and refocus on your regular offering.
4. Positive email response rate
Your latest email shot received an unprecedented response rate. That’s got to be great news, right?
Not necessarily. Looking solely at the response rate makes the numbers look better than they are. Many analytics tools class automatic replies - such as out-of-office messages - as a genuine response, while others fail to filter out negative responses and even unsubscribe requests. This issue is exacerbated when multiple emails are being sent as part of a sales campaign.
Instead, you should be tracking positive email response rates. This allows you to truly gauge the performance of your email marketing efforts. Remember to pay particular attention to the emails that produce the most useful sales conversations (and ideally lead to the most deals being closed).
5. Opportunities past due
After a certain amount of time, a lead ceases to be useful. This can make your pipeline look a lot healthier than it really is.
Measuring opportunities past due - that is, leads that haven’t closed in time - allows you to identify shortcomings in your sales funnel.
If a high proportion of opportunities are showing as past due, it may be an indication that your leads need to be nurtured for longer - or conversely, that your sales team aren’t being proactive enough in chasing up prospects. It could even show that your team are struggling to spend sufficient time on each opportunity, indicating that it’s time to start hiring new salespeople.