It goes without saying that sales are important. For many companies, profit starts with a sale. If you’re a sales manager, you already know that tracking data is important, and not just tracking the number of sales your team makes in a given month or quarter. On the other hand, these big picture data sets are what matter most for upper management. This means you’ll have to find a happy medium between tracking numbers that reflect your team’s overall performance and tracking actionable data that helps your team close more deals and turn a better profit.
The Pitch n’ putt: How long is your sales cycle?
The sales cycle starts with a pitch and ends with a conversion, or sales contract. For many sales though, this involves more than one conversation. Not unlike a round of golf, the sales cycle starts with a long shot and progresses with smaller, more precise movements toward the final goal. The time between the pitch and sale is important for two reasons: it reflects the quality of your sales process and it exhibits customer behavior.Not unlike a round of golf, the #salescycle starts with a long shot and progresses. Click To Tweet
A few things to consider when examining sales cycle duration:
- If the sales cycle is too long, potential customers could lose interest in your product and move on to a competitor.
- On the other hand, the cycle should be long enough to let your customer get comfortable with the product and gather the information needed to make a decision.
- If the cycle involves down time (like playing phone tag or waiting for an email response), who is responsible? Generally speaking, lag time should be caused by the customer, not you.
Success rate: how many pitches does it take to get a win?
Not every sales pitch turns into profit, but throwing spaghetti against the wall and seeing what sticks isn’t a good strategy either. Keep a close eye on the percentage of opportunities that turn into actual profit for your business. Several factors influence this number, including the quality of your sales team and the quality of your product. If this number is low, investigate every possible culprit:
- Timely communication with potential customers
- Fast responses to inbound leads
- Personable, informed communication with customers
- Relevance of your product / service to potential buyers
- Product quality and price compared to competitors
Efficiency, efficiency, efficiency
Getting the most out of your sales team’s time is one of the fastest ways to improve performance metrics. Even good employees can be inefficient if they don’t have a clear and effective strategy to follow. One of the biggest efficiency indicators is the average size of each sale. Simply put, make sure your team is targeting sales that yield a large return. If your team tends to generate small leads (compared to your industry standard), focus on improving your lead generation tactics.
Retention rate: How long do customers stick around?
Customer retention is important, but it’s easy to forget that for many customers, retention is tied up in the sales process. Not completely, but to a certain extent. Yes, retention is farther away from the sales cycle than most metrics, but that doesn’t make it any less important. In the spirit of keeping an efficient sales strategy, identify the common factors between repeat customers:
- Did they have a superior customer service experience?
- Are they customers who spent more than average? Or Less?
- Were they inbound our outbound leads?
- How much time did they take to make a sales decision?
Now do the same for customers who didn’t come back. With this information, you can start to build a profile of your “ideal” customer – the type who returns to use your product or service again. If your retention rate is low, use the information you find to improve your lead generation techniques and invest in the ones that will bring in more customers like your ideal customer.
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