Working in sales is not an easy job. You’re constantly under a lot of pressure to meet your quota and produce results. If sales aren’t meeting the targets that are set, much of the responsibility falls on sales management. Sales managers are responsible for the performance of their teams. Luckily, with the use of sales management software, meeting targets is much easier than not using it to drive your efforts.
The best way to ensure that your team is meeting quota, closing enough opportunities, and driving revenue, is to measure sales activity and performance closely. Measuring and analyzing metrics is key to maintaining insight into your team’s results and identifying broken links in the chain so you can fix them and continue to perform at a high level.
To ensure that you’re getting maximum insights from your sales management software, we’ve compiled six key metrics that you should be tracking.
1. Close rate
Also known as the “win rate,” close rate refers to the percentage of opportunities that are won by sales. In other words, the percentage of prospects that sales have accepted and opened an opportunity for that are converted into customers.
It’s an easy metric to measure, but a very important one. Close rates vary widely by industry. There are many estimates of the average close rate across industries, ranging from 6% to 65%. So, your best approach will be to calculate your current close rate and focus on continually improving it. This will serve you better than trying to meet industry benchmarks because they vary widely and are not reliable.
If you find that you’re having a hard time increasing your close rate, ask yourself why that might be. It could be due to an array of reasons, such as:
- Your sales team lacks the product knowledge needed to close the deal
- The sales team is focusing too much on features and not enough on benefits
- Your reps cannot form a rapport with prospects
- The sales team is not fully understanding the prospect’s use case or presenting the product in a way that illustrates how it could benefit that unique prospect
- Your marketing team is qualifying leads too soon
- Your reps are not presenting your potential relationship with the prospect as a partnership, but rather coming across as only focused on closing the deal
- Your reps are pushy, which is a huge turn off for prospects
According to the Harvard Business Review, the top reason executives give for not buying a product or service is a lack of trust and respect for the salesperson they were working with. So be sure that your reps are building rapport with prospects and establishing trust with top decision makers.
2. Win vs. Loss rate
You can measure win and loss rate easily if you use sales management software with powerful metrics and reporting capabilities. Win vs. loss rate is simply the percentage of opportunities won vs. those lost.
Again, I suggest calculating your current win vs. loss rate and working to improve it continuously rather than looking at industry standards. If your team is losing more deals than they are winning, you’ll want to ask why. The reasons listed above are all potential explanations for a high loss rate.
Another benefit of measuring win vs. loss rate is that with robust sales management software you can look at individual lost opportunities and see the reason why they were lost. This insight is invaluable, as it allows you to find common reasons for losses and work to fix them.
3. Sales funnel analysis
How many leads are at which stage in the funnel? How quickly are they passing through to the next stage? Are leads getting stuck in one stage and slowing down the sales process?
These are the kinds of questions that a sales funnel analysis can answer. Analyzing the state of your sales funnel provides deep insights into how well your sales team is performing. Doing so allows you to identify bottlenecks that are preventing leads from moving from one stage to the next.
With that insight, you can dig into the issue and understand why those bottlenecks exist. Perhaps you are not delivering the right content at the right time. That’s why it’s important to map your content to the various stages in the buyer’s journey.
New leads don’t need to see product sheets and sales pitches. They need to see educational, inbound content that solves common problems they have. This helps build trust and enhances branding. Then, deeper in the funnel, you can start to pitch your product.
Or, perhaps, your sales team isn’t following up with leads fast enough, and they end up engaging with your competitors. This leaves them stuck in your sales funnel with a decreased chance of moving to the next stage.
There are many reasons why your loss rate could be high. Analyze your losses to gain the insight you need to fix any issues and keep leads moving through the funnel towards conversion.
4. The sales pipeline
Analyzing the sales pipeline is different than analyzing the sales funnel. While funnel analysis looks at all leads and where they are in the buyer’s journey, pipeline analysis measures the number of open opportunities and the rate at which you are closing them.
When you know your average win rate over the past few months, you can use pipeline analysis to predict future revenue based on how many opportunities are likely to be won. Tracking opportunities also help in assessing individual sales rep’s performance by sales managers. If half of the open opportunities belong to one rep, you have a problem.
Ideally, you should see a near even distribution of opportunities across all your reps. There will always be reps that outperform expectations and those the underperform. Pipeline analysis allows you to see which reps need help improving their results.
Expert tip: If you find that one rep is knocking it out of the park on a consistent basis, while another rep constantly struggles to hit her targets, you can pair them and ask the overperformer to mentor the struggling rep. This type of collaboration will not only improve the struggling rep’s performance but also build a sense of camaraderie in your team.
5. Customer retention rate
As you’ve likely heard, it costs significantly more to acquire a new customer than to retain an existing one—five times more, according to Invesp.
It’s very common—almost the norm—that sales reps are more focused on winning new customers and earning commission than they are on nurturing existing customer relationships. However, maintaining high levels of customer satisfaction and reducing your churn rate will have a significant impact on your bottom line.
How do you get your reps to focus more on tending to present customers? Oblige them to do so. Task them with calling to check in with one customer every day—or as often as it makes sense for your business.
You can track calls of an individual sales rep if your sales management software includes advanced telephony capabilities. And today, it’s easy to find a solution that provides it. Those capabilities allow you to track and record calls made by sales, so you can hold them accountable for keeping up their end of the bargain.
6. Sales call data
Every sales organization makes sales calls. It’s a central part of the job. But how many calls is each rep making each week?
With the use of the advanced telephony features mentioned above, sales managers can closely monitor calls made and the length of those calls. They can also record calls, and those recordings are stored in your sales management software. This lets managers listen in to reps’ conversations and identify reasons why calls are successful (or not) at moving leads to the next stage.
Measuring sales calls also lets you calculate the number of calls it takes your team, on average, to close a deal. You can use this metric to set call quotas, which will help you maintain insight into how you’re going to perform in the future.
Maintaining insight into the health of your sales efforts is critical to business growth. With the help of sales management software, this is easily done. But which sales management application should you use?
These days, many smaller and growing businesses are using all-in-one CRMs because it includes sales management software, marketing automation, and customer support capabilities, all on the same platform. This lets sales managers dig deeper into issues their teams are facing, as they have access to marketing and support metrics as well.
Plus, some of these systems are available at no cost, meaning you can implement free sales management and CRM software and receive complete marketing and customer support automation for no additional fee.
With robust reporting and analytics, you can keep your finger on the pulse of your efforts and grow your business by continually improving your sales team’s performance.
Boosting productivity and closing more deals doesn’t happen on its own. You need the insight gained from the metrics described above to make data-driven decisions and form your sales strategy. And you can’t obtain those metrics without sales management software to drive your team’s efforts.