Do you know how to measure your sales process?
Are you wondering how the sales process measuring changed over the last decade?
Having a reliable sales process is mandatory in today’s rapid-fire digital business climate.
But simply having a sales process in itself isn’t enough: you need to be able to accurately measure progress through each step of the sales process (sales pipeline) in order to fully control and predict sales. Additionally such measures have to show what’s happening now as opposed to only reviewing what happened last quarter or last year. Let me explain:
Then: The “Tried and True” Methods
Traditionally the only measures of sales effectiveness have been those of reviewing the past. Sales figures for a month, quarter and, annually, a year, were reviewed in total and for each sales rep.
While such information is certainly vital, needed improvements to lead count, sales rep behavior or the sales process itself made after a month, quarter or year has already passed are obviously too late to make a difference in the outcome. If we had the power to change history Hitler would never have come to power, 9/11 never would have happened and the financial crisis of 2007-2008 would instead now be viewed as a boom. Unfortunately we don’t have it anywhere near that easy.
The only present-time sales process measurement many companies have had is the number of leads; they have figured that it takes a certain number of leads “poured into the sales funnel” to make a specific quota. But what is happening with those leads? How quickly are they being converted? Are those conversions happening fast enough to make quotas? And most importantly how can you measure the process of that conversion so it can be improved?
Without adequate measures sales managers are hobbled. Essentially they can only make reports along the lines of “we’re not there yet” and make their best guesses based on best guesses by those below them as to the future.
Now: Measuring in Real Time
The only way to effect positive change upon your quota outcomes is to be able to measure each step of your sales process as it happens. Once a sales process has been fully researched and established, metrics must be implemented which clearly demonstrate the progress of a sale through each step of the pipeline, in real time.
Such metrics must never be based on someone’s educated guess or opinion, but only on actual numbers and data. The more opinion and guesswork involved, the more likely you will end up with inaccurate forecasts, lost opportunities and, most important, lost sales.
Some suggested metrics might be:
- Leads in
- Leads converted to potential sales
- Sales velocity
- Length of time in pipeline
- Length of time at a particular stage of the sales process
- Average deal size
and many more as sales make their way along the sales pipeline.
Sales Force Control
At first glance such metrics might be seen to be mostly of value to sales management in overseeing salespeople. It’s certainly true that they will give sales managers a much greater measure of control and will allow them to make needed corrections before the end of a sales term when all numbers are in and it’s too late.
But what about the sales reps themselves? How much would it help an individual sales rep to readily see that a particular sale has hung up at one stage of the sales process and needs attention or help to move it along? What might happen if a rep could view his or her individual pipeline and see that they don’t have enough leads to make that monthly quota? For salespeople to be able to answer these and other similar questions would allow them to take action before a sales manager has to intervene.
Of course none of this is possible without an intuitive, flexible CRM solution that allows CRM to exactly mirror a company’s sales pipeline. CRM should also allow rapid implementation of metrics so that each step of the pipeline can be accurately but easily monitored and summarized. There should be the capacity to readily create reports that show overall progress on any level of detail necessary: from a single sale or pipeline step all the way to a rep’s or an entire sales department’s whole pipeline.
It is always important to evaluate and look over sales from the past. But to the degree that the present isn’t fully and accurately monitored and controlled, the future one hopes for doesn’t happen.
Look for our other articles on sales process measure and control.