Daily Traction in Sales !!
So, is sales tracking important for all businesses? Yes, sales tracking can help businesses, both big and small. It doesn’t matter if you’re a B2B or B2C, no matter what size and industry your business in, a sales tracking system can help optimize your performance and give you better results.
Sales tracking is important because it helps you prevent further losses and encourages you into making smart gains. By knowing the numbers, you don’t have to make second guesses; you can make smart decisions based on the numbers you already see, making you a more efficient and savvy leader. "YOU ARE BOUND TO FAIL IF YOU DO NOT TRACK YOUR SALES HOURLY" "MONTHLY TARGETS NEED TO BE BROKEN DOWN TO WEEKLY/DAILY & THE HOURLY PER HEAD"
What Are Sales Metrics?
Sales metrics are collected data that can help brands understand what’s working and what isn’t in their sales process. Tracking every single part of your sales process – from lead generation to conversion – helps businesses focus on the most effective techniques, and recalibrate those that don’t perform well.
Instead of relying on guesswork and gut feeling, sales metrics take the stress out of data science by making customer information easier to interpret and implement. The information you track depends on your priorities as an organization.
There are tons of metrics to look into, including:
- Percentage of revenue from existing customers VS new business
- Year-over-year growth
- Win/conversion rate
- Amount of qualified leads
- Percentage of leads who move to the next step in the sales funnel
- Successful cold calls/emails
- Accounts lost to competitor
- Average contract duration
- Open rate and response rate for emails
- Average time a prospect spends in a part of the sales funnel
- Number of proposals sent
- Assessing quality leads through different acquisition methods
How Does It Work?
The best thing about sales metrics is that they’re completely customizable. Depending on your future goals and current resources, you can study different aspects of your process to ensure its efficiency.
If your focus is on productivity, you could look into your sales team’s quotas to figure out whether they are underperforming, maintaining or overachieving. Realizing your team’s performance will allow you to directly improve their efficiency, as well as look into the individual strengths and weaknesses of each team member.
If your focus is on eliminating time prospects spend in the sales funnel, you might want to divert most of your resources into acquiring high-quality warm leads in the first place. This way, you can spend less time convincing prospects to sign on as clients by prioritizing those that are highly likely to sign on.
Why Are Sales Metrics Important
The sales process is a giant machine made up of little cogs that all work together to produce the best results. When one cog starts malfunctioning, the entire machine is affected and sometimes even damaged.
The same thing can happen to your sales process. When you’re seeing nothing but bad results, there’s something about your process that needs improvement. Your sales metrics will tell you exactly what that is.
But it’s not just for improving the bad parts; sales metrics can also be used to bolster the entire sales process into a stronger version of itself.
If you’re a business owner who wants to save time and devote available resources to expanding the business, sales metrics can tell you your best products, team member, techniques, clients, and partners. With this information, you can augment your strategy and make it more effective year after year.
The Benefits Of Tracking Sales Metrics
Keeping track of your sales metrics can seem tedious to the uninitiated, but it’s really simpler than you think. With software ready to automate data collection and interpretation, business owners don’t have to spend as much time doing the menial part of sales tracking. Instead, you can focus all your energies on decision making.
1. Ability to see patterns
Patterns are crucial symptoms to any business. They don’t just emerge out of nowhere – they’re clear signs of something going wrong or right in your sales process.
Let’s say 60% of your prospects tend to spend 3 to 4 weeks in the decision making process. If you’re an organization profiting from quick turnarounds and short contracts, you need to be converting as much of your prospects as possible, and fast.
With sales metrics, you can see that this tendency isn’t just a coincidence. If it’s happening year after year, there obviously is a reason as to why this occurs. By tracking your sales metrics, you can study your sales funnel and understand what’s causing the bottleneck.
2. Projection and prevention
Clever decision making is at the core of every successful business. But with dozens of moves to make, how do you ensure you’re making the right one? With sales metrics, you can rely less on instincts and more on scientific evidence.
When you’re acting on the results of your sales metrics, you’re not wondering what could happen. You’re using patterns from old sales to improve bad techniques and bolster good ones. By tracking sales metrics, you already know what’s going to happen.
Instead of tiptoeing around strategies wondering which ones will work, you can use sales metrics to find your best performing techniques and implement those across the board.
On the other hand, sales metrics aren’t just useful for preventing losses. It’s also beneficial for scaling your brand at an above average pace. Instead of wasting your resources experimenting with a hundred dozen things, you can project your growth by analyzing data that already exists. Throw in various variables to simulate different possibilities and follow the best result.
3. Cause and effect
Cause and effect relationships are hard to catch in a process because you can never be sure about how one variable affects the others. However, by tracking sales metrics, you can do exactly that and underscore relationships between variable and result.
With data ready for you to analyze, it becomes easier to ask questions and find answers for them. You can start getting answers for questions like:
- Which team member is performing the best/worst?
- What outreach channel is performing the best/worst?
- What percentage of prospects sign on after being introduced to the product/service?
- What are the most relevant services/products I offer?
- What part of the production process is irrelevant to my business?
- What seasons do I perform best/worst in?
- What is the customer acquisition cost per customer?
- What percentage of prospects are lost to a competitor?
What Are the Most Important Sales Metrics
1. Lead Response Time
How quickly your reps respond to an inbound inquiry can predict whether you convert the lead or not. Based on a study, the average response time of B2B companies was 42 hours, while only 37% responded to their leads within an hour. However, research suggests that sales reps should aim to respond within an hour to increase your chances up to 7x more of qualifying a lead.
If your sales reps aren’t hitting their monthly quotas, look into their lead response time and see if it can be improved.
2. Win/Conversion Rate
Conversion rate refers to the percentage of leads that successfully convert into paying customers. Measuring this metric will help you forecast your revenue targets, allowing you to manage costs and budget in advance. If you get 150 leads per month and convert 30 of the, then you have a conversion rate of 20%
Knowing your monthly conversion rate will also reflect your team’s performance. If your conversion rate is increasing every month while closing the same or greater amount and quality of deals, then your sales team is improving.
However, if your monthly conversion rates are dropping, you can infer that your lead generation efforts or sales team need improvement.
3. Sales to Cost Ratio
The sales to cost ratio reveals whether the revenue earned from the deal outweighs the cost of acquiring the deal in the first place. It helps you understand whether you’re paying for services (or people) that aren’t actually profitable.
To calculate, look at your average deal size and compare it to your customer acquisition cost. This metric can help you avoid financial problems in the future by reflecting your current sales performance. If you’re spending more than you’re earning securing a sale, you might have to rethink your target market or shorten your sales cycle.
4. Monthly Sales
Measuring your monthly sales will allow you to evaluate your historical performance. It’s a clear indication of whether your brand is growing, degrading, or stagnating.
Moreso, your yearly sales record will reveal annual trends in your sales. Do you tend to lose customers around a certain season? Do product/service changes affect your monthly and yearly sales? How do budget cuts affect team performance and sales quotas?
Tracking your monthly sales will give you an overview of each month, which can then be translated into yearly forecasts.
5. Average Deal Size
This metric can be calculated by dividing your total number of deals by the total amount of those deals. Keep in mind that outliers should be kept out of the calculation to get a more accurate estimate.
The average deal size is crucial for businesses trying to move upmarket. If your average deal size is increasing, it means your organization is steadily moving up from small businesses to mid-market to enterprise-level contracts.
The average deal size could also be measured according to team member. Watch out for sales reps with the lowest reported deal sizes; they’re either going for the easiest leads or giving too many incentives that are costing you money.
6. Sales Funnel Leakage
Your sales funnel is composed of various stages that could make or break a sale. To determine which stages are causing you leaks, track the stage-by-stage conversion rates and see at which stage leads are likely to drop out
Let’s say that 70% of your leads agree to a discovery call. From this you can tell that reps responsible for outreach are persuasive and have a good eye for quality leads. 60% make it to the demo phase but only 15% end up converting into a subscription or purchase. By seeing the stage-by-stage progression, you can infer that the demo is a big reason why prospects lose interest.
Knowing this, you can make a number of changes including:
- Improving your demo
- Giving more incentives for sign ups / subscriptions
- Changing the reps responsible for signing on new contracts
- Experimenting with different ways to talk to prospects
7. Visitor to Lead
Every business with a website should have an SEO strategy to loop in new customers. One way to measure your SEO team’s efficiency is by tracking visitor to lead conversion. How many of your page visitors actually become paying customers?
If you’re seeing no improvement in your visitor to lead conversion, you might want to look into things like site ranking, site authority, content quality and quantity, as well as design, UX/UI, and all the other things that revolve around online customer experience.
How Do You Keep Track of Sales
- Identify your KPIs (key performance indicator). Every organization has a different set of KPIs. Find the ones most relevant to your business and track them.
- Use mailing services built for automation and tracking. There are tons of subscription-based services like MailChimp and Woodpecker that will help you keep track of opens, bounce rates, reads, and click-throughs.
- Choose the right sales tracking system. Choose one that can sync up with your existing apps, offer report automation, and allow project and individual member management.
- Know where your leads are coming from. Are more prospects entering the pipeline from offline or online outreach? Are you getting more inbound leads from landing pages or outbound leads from your email marketing campaigns?
- Create categories you can track. For instance you can track metrics by sorting it out by client, by win/loss, by team member, by stage in the pipeline.
- Integrate social media. Use reporting on Facebook, Twitter, and Instagram to see which types of content your audience likes best. Use this to develop new ways to target leads and develop ads to increase sales.
What Is a Sales Tracking System
A sales tracking system is a service that provides actionable sales info through data you enter or extract from other sources. No one sales tracking system is the same; most have general features for all industries, while others have industry-specific features that are only beneficial to certain businesses.
A sales tracking system can help you track everything from leads and quotes in the pipeline. It’s a system that gives you a bird’s eye view of your relationship with clients, partners, and even vendors.
Commence is a CRM-focused (customer relationship management) sales tracking system. Our features include direct B2C relationship management such as customer support and customer portal. We also offer administrative features such as lead management, sales and opportunity tracking, as well as reporting and analytics for smart decision making.
How to Use Commence
As a sales tracking software, you can use Commence to:
- View every stage of the sales process
- Execute sales tasks within a single data repository
- Manage accounts based on revenue; separate highest earning accounts from those with limited prospects
- Evaluate individual campaigns with detailed analytics
- Track customer transactions
- Track customer interactions
- Manage inventory levels in real-time
- Measure losses and successes using data