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10 Hidden Sales Metrics Sales Leadership is Not Likely Tracking

An echogravity Strategy tool for Winning


2 © echogravity 2012

Table of Contents

10 Hidden Sales Metrics Sales Leadership is Not Likely Tracking .......................................................... 1

Table of Contents ................................................................................................................................... 2

Why Your Company Needs to Track Key Sales Metrics .......................................................................... 3

Is the funnel a funnel or a pipeline? ....................................................................................................... 4

At what stage do opportunities typically fall off? .................................................................................. 5

What percentage of all opportunities are tagged as "Lost"? ................................................................ 6

What Percentage of opportunities die as "No Opportunity"? ............................................................... 7

What Percentage of First Calls/Meetings lead to Second Calls/Meetings? ........................................... 8

What Percentage of new calls are "exploring" versus "qualifying"? ..................................................... 9

How frequently do new "real" deals enter the sales pipeline?............................................................ 10

How accurate are opportunity values? ................................................................................................ 11

What's the average sales cycle time per sales stage? .......................................................................... 12

Over time, what is the total value of the funnel at each stage? .......................................................... 13

Conclusion ............................................................................................................................................ 14

About echogravity ................................................................................................................................ 14

10%20Hidden%20Sales%20Metrics%20ebook%202-29-12.doc#_Toc318744737



Why Your Company Needs to Track Key Sales Metrics The lifeline of companies lies in new business development and prospecting. Very few companies can live an extended life solely on business from current clients. So, tracking new logo and client acquisition is a must have for all SMB companies. If the objective in 2012 is to grow, paying attention to the details in the sales team is a must. We find that many of the companies we talk to have frequent turnover in their sales teams. There is a reason for this. For starters, hiring (great) sales people is a very difficult task. In addition, the cost for making a bad sales hire is astronomical when considering opportunity lost and sunk costs. So, in order to make the most of any sales investment, there are a number of keys trends of which should be paid very close attention. Typically, these metrics and numbers are hidden, and require that someone be accountable to delivering these numbers to upper management. Most CRM/SFA solutions only provide "point-in-time" results for reporting; burying key trending metrics that rarely get exposed. Each of the following metrics should be tracked against both a sales team as a whole, and the sales individual in order to visualize trends not normally accessible.

http://echogravity.com/2012/02/sales/the-dna-of-a-sales-champion/



Is the funnel a funnel or a pipeline?

There is a significant difference in these terms. Visually, a funnel is wide at the

top and narrow at the bottom. A pipeline is the same width at the top and the

bottom. The rule of thumb says that there are typically more opportunities at

the top being worked as leads and at each sales stage some drop off, leaving a

smaller percentage at the bottom. It's an age-old sales process that has been

used since the beginning of time. However, it's very likely that your best sales

reps have a pipeline, versus a funnel and there is one key reason why: top

sales producers know how to quickly sniff out money, and leave out the leads

and opportunities that are not likely to close. Therefore, their sales "funnel" is

more of a "pipeline". And conversely speaking, the sales reps that are less

likely to close more deals have more "stuff" in the earlier stages, giving

themselves false hope and the impression that many opportunities are being

worked.



At what stage do opportunities typically

fall off?

If your sales process includes defined stages with gates requiring passage to

the next stage, start tracking trends of opportunity drops. Most sales

processes have a period by which there is vision alignment or buy-in from the

prospect to continue the opportunity to the next stage. It is likely that your top

sales reps are passing a higher percentage of opportunities from qualified lead

to vision alignment. Less skilled sales reps are likely to see more drop offs at

this point. Companies have varying sales stages, so tracking and modeling top

performer metrics through critical stages of the sales cycle will give executive

management key signals about the effectiveness of the sales team.



What percentage of all opportunities

are tagged as "Lost"?

This is a very important metric because it tells management how "fluffy"

pipelines are and how effective the team is at closing. It's a rule of averages

that more opportunities will likely get lost versus won, but it is important to

measure the balance between the two; with the team and with each

individual. In addition to understanding the percentage of lost opportunities, it

would be extremely insightful understanding the details of why they were lost.

The top reps will have more "lost" opportunities that were won by

competition. Less skilled reps will have opportunities lost because of more

random and obscure reasons because leads in the "funnel" were low value to

begin with. All in all, weak closers and less skilled solution sellers end up losing

a great deal more than they win.



What Percentage of opportunities die as

"No Opportunity"?

This metric is a subset of point #3 above. When opportunities get taken off the

forecast as "no opportunity", they were likely a fishing expedition in the first

place. It's not to say that some opportunities shouldn't be added because of

the lack of clarity in the details, but more times than not, less skilled reps are

"chasing" weaker opportunities in "hopes" that something will transpire.



What Percentage of First Calls/Meetings

lead to Second Calls/Meetings?

Depending on the type of sales process that your product/services falls into,

one or more meetings are required to move opportunities through the stages.

If reps are required to meet with prospects more than once, tracking the

breakdown of meetings within a sales stage can be quite telling. There are so

many examples where a first meeting occurs with a prospect and the rep

leaves the opportunity in this stage for an extended period of time with an

associated value to the opportunity. It is likely that the opportunity could be

dead, but holds value and hope when both are meant to be $0. It's critical to

understand what kind of impression sales reps are leaving, and if the

leads/opportunities are being qualified from the initial meeting appropriately.

*Check out another echogravity eBook on this

subject: Nailing the First Face-to-Face Meeting

http://echogravity.com/free-sales-meeting-agenda/



What Percentage of new calls are

"exploring" versus "qualifying"?

Are your reps attending meetings with the intention of "showing up and

throwing up?" Do your reps spend more time talking in the new prospect

meeting rather than listening? Are the meetings staged such that the agenda

speaks to asking questions and qualifying the opportunity? This metric is very

hard to track, because of the soft measures included in the process. If there

are too many "exploring" calls set up by reps, they are reaching and stretching

to get meetings in order to hit

numbers in the hopes that

something may transpire in the

meeting. It's highly likely that your

top performers are queuing up

meetings with the expectation that

qualification is the key objective to

the conversation. If the meeting is

staged such that the prospect is

left asking many questions and your rep is left talking the whole time, there

will be little left in the tank to optimize the next steps of the relationship.

When less qualifying is taking place, there is a higher chance of missing the

mark on the client needs. Another note to take into consideration is that lesser

skilled reps are uncomfortable asking the tough questions and more

comfortable talking to avoid doing so.



How frequently do new "real" deals enter

the sales pipeline?

This measure is important to track in order to understand the value of

prospecting among the sales team.

Scenario: Take for example this situation: In

January of 2012, the value of the sales

pipeline is $1 Million for the entire sales team.

In February, the value of the pipeline

increases to $1.5 Million. Looks like progress,

right? Wrong. In this scenario, the value

increased because the reps increased the

value of a couple opportunities, making it

appear that the forecast is more

opportunistic. However, if there are no new

opportunities entering into the organization

through lead generation or other inbound

marketing activities, the real value of the

pipeline actually falls.

http://echogravity.com/marketing/

http://echogravity.com/what-we-do/

http://echogravity.com/what-we-do/



How accurate are opportunity values?

Measuring the accuracy of each rep's opportunities is very important for a

whole host of reasons. For starters, knowing the value of an opportunity

effects the importance and validity of a sales forecast.

Scenario: Sales rep A has an average opportunity value of $500,000 and

consistently changes, or closes, at a lesser value. Depending on the type of

business, this could dramatically hinder the overall operations of a company if

investments or cost planning is vital to fulfillment. Sales rep A has an

overestimation problem that also gives management a false sense of security

around the value of potential new business that may be on the horizon. What

we have found is that most top performers are more conservative in their

estimates of new business value, because fluffing up the worth of their

pipeline gives them a sense of security that they are not comfortable with

when they know deep down that the numbers aren't accurate.

We have seen a correlation between accuracy and sales effectiveness among

sales teams. Run a quick check to see if this is also true among your team.



What's the average sales cycle time per

sales stage?

Tracking duration of opportunities is a key measure. Many sales tools can track

this metric as "sales days outstanding". Most opportunities are time stamped

on the date entered. However, how many sales managers are looking at the

details around averages per rep based on each sales stage? The answer we

find is "almost none". There is a direct correlation between top performers

and shorter sales stage cycles. Again, the reason is based on the fact that top

performers know how to move deals through, have an acute sense of smell for

money, create relationships that bring deals to the table quicker, and know

when to add new opportunities into the sales pipeline. Lesser skilled reps will

drag opportunities through the stages on the "hope factor"; lengthening the

staying power of each opportunity. The weaker group will look for external

factors to help opportunities close, while stronger reps will take control of the

process, making certain that the key individuals are engaged and the process is

moving the way they want it to move. At any given moment, the snapshot of

the current pipeline has a maximum value that cannot be changed unless new

prospects enter over time.



Over time, what is the total value of the

funnel at each stage?

Measuring pipeline value across time segments is a critical measure that most

companies ignore. There is tremendous worth in tracking each stage value and

comparing it across weeks, months and quarters. By reviewing this data, there

are insights to be had that can forecast opportunity more precisely, and give

business owners operating data that can prevent/facilitate key business

decisions about revenue, profit and people.



Conclusion Tracking all of this data isn't an easy task. However, we believe that it is important to understand the

types of metrics that mostly go unnoticed. We challenge you to look at each of these we've listed

above and apply them to your sales team to see where each individual falls. We hope that your

team consists of Sales Champions and not Scary Creatures. Either way, start uncovering the data

right away so that your company can be lead to higher levels of success!

And if you already have a grasp on these metrics, tap into an Inbound Marketing Strategy to feed

the system even more!

About echogravity echogravity specializes in driving inbound marketing for IT Services companies, Contact Center

ecosystem organizations, and other small to mid-sized businesses. Whether it’s driving content

marketing, communicating on the social web, optimizing web sites, or pointing prospects to your

site, echogravity will make sure that your target market not only knows that you exist, but that you

are a leader in your space.

In a Nutshell, we are a group of skilled marketers that do the heavy lifting at the top of the funnel so

you can focus on closing in the bottom.

echogravity

3 Golf Center, Suite 270

Hoffman Estates, IL 60195

630.855.6900

echogravity.com

@echogravity

http://echogravity.com/2012/02/sales/the-dna-of-a-sales-champion/

http://echogravity.com/2011/10/sales/5-scary-creatures-your-sales-manager-should-avoid/

http://echogravity.com/contact/

http://www.echogravity.com/

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