Sales metrics are important when we talk about selling more and better. After all, if a company wants to sell more and better, it needs to have its processes optimized – and the sales process is essential.
To grow and be a reference in what it does, having the commercial team’s time focused on selling well, to those who have the potential to become customers, is vital for the long-term viability of any business.
For this reason, analyzing the main sales metrics is the work that every manager needs to do to fine-tune the commercial process. And that’s what this text is about.
Know which sales metrics you need to analyze and understand the importance that good CRM software has in this function.
Let’s go.
Good reading!
Sales metrics: After all, which ones should I observe?
Ramping up sales is what every company wants, but doing so without a fine-tuned commercial process is a difficult task.
Therefore, we have separated 7 important sales metrics to be observed to improve the sales playbook. Check out:
Opportunities: open and lost
Having the dimension of how many opportunities each salesperson works is essential for:
- understand, in a week or a month, how many opportunities the seller has to work;
- new opportunities in the sales funnel,
By doing this, it is possible to define a target of opportunities that need to be opened for the chosen period. If they are below the desired level, increasing prospecting for, for example, social networks such as Facebook, and also qualifying leads are outputs.
After all, if a seller opens few opportunities in a month, he will probably not be able to reach his goal and this will impact the company in a medium period.
There is also the risk that the salesperson will open up too many opportunities and, in this way, let the leads cool down. Even having a good CRM to carry out the actions, it is necessary to act assertively so as not to let the potential client’s interest go astray.
Missed opportunities
Understanding opportunities missed by salespeople is another important sales metric.
To understand a salesperson’s ability to successfully close a sale, you need to know the number of lost opportunities for the entire sales team.
Being aware of the average, you will know how to identify the problem. Are few opportunities generated? Is the seller unable to close the sale? Leads fail to qualify?
By understanding what happens, it is possible to seek the reason and, later, the solution.
Conversion rate
This is one of the sales metrics that is linked to the topic above. Conversion rates show how many of the leads that entered each salesperson’s sales funnel became customers.
Taking an example, let’s say a specific salesperson had 200 opportunities throughout the month. Of these, 20 became customers. That is, your conversion rate is 40%.
Knowing the success rate that your sales team had, it is possible to know if this is an acceptable number according to your business – it depends on what you sell and to whom.
To increase this rate, within your CRM, see which stage of the funnel – and in which funnel – your sales team has more difficulty, no matter what it is.
Average sales time
From the first contact with the commercial team to acceptance of the proposal. How long does it take a seller to close deals?
Within CRM software, it is possible to measure this time due to the record of activities. Emails sent and recorded calls serve not only to find out how long this process took but also how it occurred.
So, by analyzing a good number of opportunities handled by several sellers, you can understand if someone on your commercial team is taking longer than usual to complete a sale and, thus, adjust the process.
The problem may lie, for example, in the absence of information from the lead, especially regarding their pain so that the solution can be adjusted to them, making the speech assertive.
The more qualified the lead, the more information an SDR can extract, the easier the sale will be. Therefore, a structured pre-sales team is essential for any commercial operation.
Response time
If someone showed interest in your service or product, they may have possibly also been interested in your competition.
For this reason, lead response time is extremely important.
Think for yourself. Would you pay more attention to the one who responds quickly and cordially to your request, or to the one who, a day later, sends a flat reply, without any indication of help?
Okay, no need to answer – that one was easy. Especially because, as a Harvard study addresses, sellers who approach leads up to 7 hours after the first contact are the ones with the highest sales conversion rates.
It’s easy, to go… email, phone call, WhatsApp.
As soon as the lead enters your pre-sales funnel, why not have an automatic action programmed? An email blast offering your public address book for a phone call is all you need.
Follow-up and contact: How are these rates?
The prospect needs to trust the seller. This is the basic starting point. The relationship needs to be good, but the commercial team also needs to be insistent – but without irritating.
Therefore, always being available to help, offering rich material that will help you with some pain that you have already identified, all this “ant work” is rewarded.
Can it take time? He can. But, showing notoriety in the subject, that the salesperson is an available person, who understands the pains of the prospect, at some point he will stop and consider you as the ideal solution.
Follow-up is indeed important. Even if it’s an “I miss you” email, giving him something of value or being available for a conversation makes all the difference.
CAC, LTV, ROI
Customer Acquisition Cost, the so-called CAC, is nothing more than how much it costs each customer to get to your company.
To calculate it, let’s say you got 500 new customers in two months. Your spending in these 60 days was $1,230.00. So it’s easy: Divide $1,230 by 500 and you’ll know your company’s CAC.
To find out if your CAC is high, we go into the second item of this paragraph, the LTV. If this is less than the CAC, then your business is in trouble.
Customer Acquisition Cost needs to be much lower than Life Time Value – this identifies the value each customer left for your company over the period they consumed your solution.
ROI is the return on investment made. You can calculate the return on what you invested to qualify your team to sell more.
The ROI calculation is based on: (Return on investment – investment cost) / investment cost.
Let’s go to numbers: let’s say that the current result of your commercial team is $82,000.00 per month.
After a series of training sessions, for $10,000.00, the application of new techniques doubled monthly sales, reaching $164,149.00.
In this way, we will have (82,000 – 10,000) / 50,000= 1.44. In other words, for each real investment, we have a return of $1.44. In other words, the return on investment was 144%.
Sales cycle
Last but not least, is the sales cycle. This is the total time that the customer takes from the first contact with your company until finalizing the purchase.
This sales metric is different from “average sales time”, as it is about contact with your company as a whole, such as filling out a form to download an eBook.
This is where marketing and sales work together.
For this metric, it takes into account the average time per meeting, meetings held and all types of processes required to win the opportunity.
The time invested in each opportunity is directly linked to success in sales. If the lead stays in your sales funnel for a long time, then it is likely that he will not choose you to solve his problem.
By taking care of these sales metrics, it is possible to improve the commercial process and sell more and better.
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Enjoy and also read our article on how to identify where your sales process fails.
Good sales!
