4 Key Sales Metrics

Posted on January 5, 2011. Filed under: Lead Generation, Pipeline Measurement, Sales, Sales forecasting, Sales Management, Sales pipeline | Tags: , , , , , , , |

This week’s blog entries are related to Hitting the Ground Running in 2011.  Click here to go back to and start at the beginning of the week.  A good place to begin your review is with these four sales related metrics:

1-      Number of sales made

2-      Size of sales

3-      Percent of sales coming from existing customers versus new customers

4-      Mix of sales

Number of sales closed is important for several reasons.  Consider some extremes.  If you made one sale the entire year then your results were highly vulnerable.  If you win it, you’re a hero.  If you don’t, you’re a zero.   On the other hand when you spread your sales results across many, many sales you  could be losing some sales due to a lack of enough focused selling effort on each one.  You lightly skip from deal to deal doing just enough to be in the running but not enough to take it across the finish line.

If the number of sales you made this year was markedly different from the number you made the year or two years before then take the time to understand if your approach to the funnel also has to change. If you need a higher number of sales, then your funnel might need more opportunities on it too.  If you need fewer sales of a higher dollar value then you might need to improve your qualification of those larger deals.

It’s important to know the typical size of sale you win.  If you’re more comfortable winning smaller deals and now you’re being asked to win bigger deals you might want to get coaching on how to make that shift.  One of my clients had a sales force that was not equipped to sell seven figure deals.  The VP of sales wisely and quickly brought in ‘big deal’ talent that knows how to sell at that level.  If you typically win few big deals and now you’ve got to win a higher number of smaller sized deals you might have to prospect more than you normally do to fill your funnel full of smaller sized deals.

Knowing the percent of business coming from existing customers versus new ones can expose important things about how you should work your funnel and find leads.  If you’re a ‘farmer’ type seller you might be more comfortable getting incremental business from existing customers.  The focus of your lead generation might be selling more stuff to the base of relationships you have, or selling to sister divisions of the division you sell to.  On the other hand if you’re a ‘hunter’ type seller you’re probably turning over more sales from year to year and you’re active in filling your funnel with new leads.  Now, if you’re a farmer being asked to prospect more, or a hunter being asked to do more account management your funnel management approach will have to change.

Finally, knowing your mix of sales and how it has changed can lead to changes in how you manage your funnel.  One of my clients launched a new service that could be sold to existing customers but also could help them get in the door to new customers.  Generating sales from the new service will require new approaches to lead generation that might differ between existing and new customers.  Sellers that have a low turnover of sales year to year might be surprised at how much prospecting effort is needed to generate opportunities with the new offering.

Tomorrow we’ll look at last year’s results from the perspective of three key metrics, win rate, velocity and push rate.

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Hit the ground running in 2011

Posted on January 4, 2011. Filed under: Sales, Sales forecasting, Sales Management, Sales pipeline | Tags: , , , , , , , , |

With another year of selling behind you, the important thing to remember is it’s gone.

I salute you if you had a great year and I’m sorry if your year didn’t turn out as you wanted.  For this new year all runners line up at the same starting line once again.

The sales numbers might not lie but they don’t always tell the entire truth either.  Therefore, regardless of last year’s results the important thing to do is to learn.   I devote this entire week’s blog to last year and helping you learn from it.    This week I’ll discuss:

  • 4 key sales metrics to understand the raw numbers
  • 3 key funnel management metrics that every salesperson must manage to
  • 2 key metrics related to lead generation and the customer buying process

As you read through the entries and perform the review remember this:

  • Be honest with your assessment and answers.
  • Be factual.  The better ‘data’ you have about your performance the better your analysis will be.
  • Give yourself credit for doing the exercise.  The vast majority of sellers don’t do this.

Here are the 9 metrics I’ll cover:

1-      Number of sales made

2-      Size of sales

3-      Percent of sales coming from existing customers versus new customers

4-      Mix of sales (if you sell more than one product or service)

5-      Win rate

6-      Velocity

7-      Push rate – percent of sales that don’t close within the timeframe you originally state

8-      Lead source

9-      Funnel stage of discovering the lead

In the next blog post, I’ll tackle the first four.

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