Favorite metrics: 5 indicators that each sales team must follow
We all know this “wonderful” feeling when the end of a sprint, quarter or even a year comes, and there is a reporting period ahead. While you are working on a task, everything is clear and adequate. As soon as there is a need to accurately track the results (and evaluate their work), a huge number of metrics are dumped from non-existence and interfere with concentration.
All of us are swimming in a huge sea of data - and they can really help improve the sales process. But which ones to choose? One of the most pressing problems that sales managers and marketers are facing today is setting up reports. And this setting consists in understanding what exactly will give the team a clear vision of the situation and will require the smallest efforts from the executors themselves for tracking and calculations.
Not properly
From personal experience, I know that this is a problem with a capital letter. And in order to solve it effectively, I had to create a reliable system of sales indicators, not losing a single useful metric and throwing away all unnecessary.
To begin with, we have written down the level of our “expectations” in detail, in order to definitely be delighted with the information coming from the statements. At this stage, we immediately faced another serious problem. We created too much work, and because of the influx of data, it was extremely difficult to enter accurate values and track real effectiveness. More than half of the bizarre indicators did not report anything at all.
But this story is not about problems, but about solutions. After working with dozens of sales departments, with managers, smm-schiki, arbitrazhniki and marketers, we formed the top 5 indicators. And they should start tracking right now.
The number of deals at each stage reflects the total number of deals currently in operation of your pipeline. If you want to understand where the holes are in your process , this indicator is most important.
This is important because each sales process has different stages. A specific number at a glance will give you to understand that this is (or not) the perspectives of your team. Each stage must have its own criteria, according to which it is considered “closed”. For example, you need to understand the budget and deadlines before moving on to the work itself. If you are able to detect the “pipeline segment” where the number of transactions falls or the speed of the process slows down , you can discuss it in detail with your team and remove the obstacle.
You will most likely find that the case is stuck, because your sales team cannot reach the decision maker in order to get an oral agreement, permission to move forward. Or the accounting department does not approve the invoice on time, complaining about the lack of acts (although they were just stuck somewhere halfway from department to department). Or the developers can not get from the "business" normal TK.
In any case, by tracking the number of transactions at each stage of the process per week, you can more accurately determine what problems your team has, and not just guess who is breaking the deadlines this time.
Exactly. Not “this task you have to do during the week”, but time as a monitored parameter. Chasing a team is pointless, especially if there are obstacles on the way to the conveyor (see item 1).
Just as you want to know which deals easily go through all the stages, and which ones get stuck, it is important for you to find out the amount of time spent on each leg of the journey . All stages can not occupy the same amount of time, but there is an idea of the average amount required for a particular job.
For example, you can learn that transactions that close quickly and bring in the future the best customers take, on average, 2 weeks at the preparation stage. Knowing this average value and tracking time “on the conveyor”, you will be able to immediately understand 2 things:
Now, when you analyze transactions that take more than two weeks (depending on your sales cycle, of course), you can make assumptions:
All this will enable the sales department to stop wasting time on transactions that take a lot of time and are not profitable.
This is the average number of days it takes for you to go from the moment you create a transaction to the “closed” status. Although this parameter is similar to the second metric, it is more focused on the process as a whole and accurate prediction.
As transactions move along the pipeline stages, the probability of their successful closing increases. When your process and sales reports become more accurate, you can make a forecast and prepare your teams to increase or decrease the future amount of work.
Increasing or maintaining income is always our primary goal. Yours probably too.
As your company grows and grows, you will want to understand how the size of transactions changes and when it is best to “declare” your customers. By tracking the average transaction size over time, you can see how revenue is growing overall, and it’s better to track how many transactions are needed to achieve a common goal.
Set more realistic goals based on the average size of the classic transaction and their total number. Such a calculation will allow the team not to rely on “magic” deals, the amount of which goes against the norm (although, we all confess, we love these successful cases that come to save the quarter).
The transaction amount by source is the total amount of all transactions received through certain channels. For example:
This metric is a big deal for marketing and “leveling” sales.
By actively tracking where the most predictable revenue comes from , sales and marketing can focus on the most successful sources.
Tracking this metric allows your teams to confidently invest their budgets in the channels or sources responsible for the highest amount of revenue . For example, to attract more speakers to the conference or, on the contrary, to increase the advertising budget for the social networking department.
Yes, we promised 5 indicators, but this one is the sixth, albeit not numeric, but also necessary.
The amount of the transaction by type keeps track of the total amount for each specific product (kit, kit, package of services). Having this metric, easily accessible and understandable to each department, often helps to keep everyone “in one field of vision” so that the team can concentrate.
It is often possible to come to the conclusion that a single product brings the greatest profit, since it accounts for a large amount of the transaction. But it is worth looking more closely, and it turns out that smaller contracts for another product outweigh the number and frequency.
Understanding this metric in terms of large-scale planning will allow sales managers to focus on the areas with the most opportunities.
Setting up and tracking sales figures is one of the best steps you can take to improve all processes, but this step will not solve all your problems.
These indicators are designed to help identify key areas of success that need to be developed, and areas that require additional support. Often the problem lies not in the process as a whole, but in small details, such as building trust at a certain stage or allocating a larger budget to more successful sources.
And, thanks to the progress, all these tasks are solvable.
All of us are swimming in a huge sea of data - and they can really help improve the sales process. But which ones to choose? One of the most pressing problems that sales managers and marketers are facing today is setting up reports. And this setting consists in understanding what exactly will give the team a clear vision of the situation and will require the smallest efforts from the executors themselves for tracking and calculations.
Not properly
- We report on the indicators that are obtained
- We force to report by those criteria about which they heard “this is - indicators of success”
- We invent a bicycle and display our own “well done / not well done” scale.
- We divide the indivisible, add pieces and kilograms, enjoy the numbers
- It’s hard to expect something simple that can be downloaded from the banal Google Analytics
From personal experience, I know that this is a problem with a capital letter. And in order to solve it effectively, I had to create a reliable system of sales indicators, not losing a single useful metric and throwing away all unnecessary.
To begin with, we have written down the level of our “expectations” in detail, in order to definitely be delighted with the information coming from the statements. At this stage, we immediately faced another serious problem. We created too much work, and because of the influx of data, it was extremely difficult to enter accurate values and track real effectiveness. More than half of the bizarre indicators did not report anything at all.
But this story is not about problems, but about solutions. After working with dozens of sales departments, with managers, smm-schiki, arbitrazhniki and marketers, we formed the top 5 indicators. And they should start tracking right now.
1. The number of transactions at each stage
The number of deals at each stage reflects the total number of deals currently in operation of your pipeline. If you want to understand where the holes are in your process , this indicator is most important.
This is important because each sales process has different stages. A specific number at a glance will give you to understand that this is (or not) the perspectives of your team. Each stage must have its own criteria, according to which it is considered “closed”. For example, you need to understand the budget and deadlines before moving on to the work itself. If you are able to detect the “pipeline segment” where the number of transactions falls or the speed of the process slows down , you can discuss it in detail with your team and remove the obstacle.
You will most likely find that the case is stuck, because your sales team cannot reach the decision maker in order to get an oral agreement, permission to move forward. Or the accounting department does not approve the invoice on time, complaining about the lack of acts (although they were just stuck somewhere halfway from department to department). Or the developers can not get from the "business" normal TK.
In any case, by tracking the number of transactions at each stage of the process per week, you can more accurately determine what problems your team has, and not just guess who is breaking the deadlines this time.
2. Time spent at each stage
Exactly. Not “this task you have to do during the week”, but time as a monitored parameter. Chasing a team is pointless, especially if there are obstacles on the way to the conveyor (see item 1).
Just as you want to know which deals easily go through all the stages, and which ones get stuck, it is important for you to find out the amount of time spent on each leg of the journey . All stages can not occupy the same amount of time, but there is an idea of the average amount required for a particular job.
For example, you can learn that transactions that close quickly and bring in the future the best customers take, on average, 2 weeks at the preparation stage. Knowing this average value and tracking time “on the conveyor”, you will be able to immediately understand 2 things:
- the likelihood that the transaction will close quickly and successfully;
- answer to the question “how quickly should the process be completed for success?”
Now, when you analyze transactions that take more than two weeks (depending on your sales cycle, of course), you can make assumptions:
- most likely, we will not close the deal;
- most likely, if we close it, communication with the client will be difficult.
All this will enable the sales department to stop wasting time on transactions that take a lot of time and are not profitable.
3. Average number of days to close a deal
This is the average number of days it takes for you to go from the moment you create a transaction to the “closed” status. Although this parameter is similar to the second metric, it is more focused on the process as a whole and accurate prediction.
As transactions move along the pipeline stages, the probability of their successful closing increases. When your process and sales reports become more accurate, you can make a forecast and prepare your teams to increase or decrease the future amount of work.
- We keep within 4 days from the moment of the first call before discussing the conditions = close the first client and switch to the second one.
- Large order, about 25 days before signing = you have 3 days to present and allocate about 5 days for negotiations and correspondence.
4. Average transaction size
Increasing or maintaining income is always our primary goal. Yours probably too.
As your company grows and grows, you will want to understand how the size of transactions changes and when it is best to “declare” your customers. By tracking the average transaction size over time, you can see how revenue is growing overall, and it’s better to track how many transactions are needed to achieve a common goal.
Set more realistic goals based on the average size of the classic transaction and their total number. Such a calculation will allow the team not to rely on “magic” deals, the amount of which goes against the norm (although, we all confess, we love these successful cases that come to save the quarter).
5. The amount of transactions by source
The transaction amount by source is the total amount of all transactions received through certain channels. For example:
- backlinks
- targeted advertising
- contextual advertising
- referrals from customers
- conferences and other offline events
This metric is a big deal for marketing and “leveling” sales.
By actively tracking where the most predictable revenue comes from , sales and marketing can focus on the most successful sources.
Tracking this metric allows your teams to confidently invest their budgets in the channels or sources responsible for the highest amount of revenue . For example, to attract more speakers to the conference or, on the contrary, to increase the advertising budget for the social networking department.
6. Transaction amount by type
Yes, we promised 5 indicators, but this one is the sixth, albeit not numeric, but also necessary.
The amount of the transaction by type keeps track of the total amount for each specific product (kit, kit, package of services). Having this metric, easily accessible and understandable to each department, often helps to keep everyone “in one field of vision” so that the team can concentrate.
It is often possible to come to the conclusion that a single product brings the greatest profit, since it accounts for a large amount of the transaction. But it is worth looking more closely, and it turns out that smaller contracts for another product outweigh the number and frequency.
Understanding this metric in terms of large-scale planning will allow sales managers to focus on the areas with the most opportunities.
Suppose my team starts tracking these 6 indicators, what next?
- You choose the right direction for yourself or make changes to the strategy, supported by the data of the entire sales group.
- Team, individual trainings, the choice of advanced training courses - now you can focus on areas where there really is not enough training or knowledge
- Marketing and sales will be able to make more efforts to work with those sources (with those products and in those areas) that open up more opportunities.
- Success will be predicted long before the client is ready to make a final decision.
Setting up and tracking sales figures is one of the best steps you can take to improve all processes, but this step will not solve all your problems.
These indicators are designed to help identify key areas of success that need to be developed, and areas that require additional support. Often the problem lies not in the process as a whole, but in small details, such as building trust at a certain stage or allocating a larger budget to more successful sources.
And, thanks to the progress, all these tasks are solvable.
Source: https://habr.com/ru/post/440048/