Tracking and managing sales performance is all about finding and improving the right key performance indicators. Here are four of the main ones for the modern marketplace.
1. Lead Quantity And Quality
Lead quantity and quality, also known as your lead flow, measures the opportunities your salespeople have to connect with potential customers. If you don't have sufficient leads available, your people won't have the opportunities they need to display their customer service and closure skills. However, too many poor-quality leads may lead to your staff wasting time and reduced sales performance. Note where the best leads come from and the demographics of the people in the prime lead groups to work out where to focus lead gathering in the future rather than simply seeking increased volume. Also, make sure your lead numbers are sufficient to support your sales staff in producing their best work.
2. Lead Engagement
How many of the leads you've given to your salespeople have they fully engaged with? Lead engagement might take the form of a one-to-one conversation, targeted information or a simple personalized email, but the point is good sales performance requires your staff to go beyond mass marketing. Customers insist on being treated as individuals, and your staff members must go the extra mile to close the deal. Leads that have been engaged with in this way are also known as qualified leads.
Some companies calculate conversion as simply the number of new customers in a period divided by the number of qualified leads, claiming this gives an idea of the effectiveness of sales performance. However, this formula doesn't take into account the length of your sales pipeline or the effects of any marketing or sales work done outside of the direct sales conversation. What conversion rates can do is give you an idea of the effectiveness of your selection processes for qualified leads and help you to refine your procedures. Plotting new customers against lead engagement over time to calculate lag times is one way to do this, and this can also help you to measure and account for any seasonal effects. By including the timing of particular campaigns, you may also be able to calculate marketing and sales performance for those pushes.
4. Revenue Changes
It's important to realize revenue changes include not only new business but also increased and renewed contracts. Some of your most important leads may already be customers to some extent, and unless you take their additional business into account, you may consistently underestimate your sales performance. Maintaining ongoing relationships with existing customers is at least as valuable a skill as cultivating new ones, and the work your salespeople do to keep your contracts relevant and growing should be acknowledged.
While a number of useful KPIs provide you with a better understanding of some aspect of sales performance, it's important to remember that no one figure tells the whole story. Looking at the sales pipeline from leads to revenue can help you get a more comprehensive idea of exactly what's going well and where changes need to be made.
Photo courtesy of stockimages at FreeDigitalPhotos.net