If you cannot measure it, you cannot improve it!
Sales Metrics refer to those aspects of sales which must be measured for informed decision making. In the absence of these metrics marketers tend to hit in the dark and squander their precious little resources. The question here is to understand what is exactly needs to be Measured, Monitored and Maintained!
Let us look at the Sales Journey and pin point the aspects to be measured in each part of the sales journey , as shown below viz. Presales Process, Sales Process, Sales Installation and Post Sales. I am sure you would like to know what exactly is to measured in each of these aspects of Sales Journey.
1. Suspect: Prospect Ratio
|S.No.||Suspecting Silos||Sub Silo||Lead Magnet code||Lead Magnet Fed||Prospects generated||Suspect: Prospect Ratio|
If Suspect : Prospect ratio is poor the inference may be one of the following
a) Quality of Suspecting is poor
b) The database collated in the silos is not up to the mark
c) The quality of lead magnets is not good enough to solicit a response
2. Sales Funnel Ratios
|Salespersons Name||Suspect (Nos.)||Prospect (Nos.)||Leads (Nos.)||Proposals (Nos.)||Negotiation (Nos)||Order (Nos)||Lost cases engaged|
a) L : Pr (Low Proposal conversion means poor need analysis)
b) Pr : N. (Low conversion to Negotiation means that Proposal writing / presentation is not good)
c) N : O ( Low order conversion means that Closing and Negotiation skills are poor)
d) L : E (Those leads which do not convert into orders have to be engaged till you bill with them. If no of leads engaged is much more than no of leads closed, we will have to look at the merits of the sales process)
3. Lead Scoring Analysis
|Total leads||MQL * 30%||SQL * 50%||BANT * 75%||MQL:SQL||SQL:BANT||MQL:BANT||Lead Score|
|(0.3MQL + 0.5SQL + 0.75BANT) / Total no of leads|
MQL = Leads which are willing to buy
SQL= Leads which are willing to buy, have capability to buy and urgency to buy
BANT = Budget, Authority, Need, Timeframe
If Lead Score is more than 50%, it is good. If the lead score is less than 40% it means that the sales funnel has more of MQL. This translates into poor sales in the short term.
4. Salesperson’s Performance Index
The performance of salesperson is measured in two forms
a) ETC: Expected to the Company.
(This denotes the business expected to the company by virtue of customers acquired in the past)
b) NTC : New to the Company
(This denotes the new business acquired for the company by virtue of new customer acquisition.)
Always track the ETC and NTC business for all salespersons over the months. If ETC targets are achieved and NTC targets are not , this is an indication of the salesperson’s dipping performance.
If NTC targets are being met but ETC targets are not happening, it means that customer engagement and service is poor.
Ideally, ETC and NTC must be achieved every month for overall salesperson’s performance index to be good.
5. Product Performance Index
This is required for company’s which have multiple product categories and even multiple SKU within each product type. It is important to track how a particular SKU is doing in terms of sales , collection and market penetration.
6. Market Performance Index
Each geographical territory also needs to be studied vis a vis performance. The market is divided into Beats, Routes and Journey Cycle. Each of these markets has a market potential. It is important to study the performance of these markets vis a vis its respective potential.
There are times when a salespersons performance is good but the product performance or market performance is poor. Juxtaposing s no 4, 5 and 6 will show an over all performance index.
7. Sales Installation Quotient
|S.No.||Name of customer||Sales Order Supplied||Sales Order Installed||Customer Rating|
There is a difference between “supply” and “installation” of an order. Physical supplies when backed by empowering the customer for optimum usage of the product supplied is called “installation”.
Installation is the fulfilment of the brand promise without the customer demanding for it. Customer accepts the brand promise and purchases a product. The brand in return must install the product with 100% fulfilment of all brand promise.
8. CRM Metrics
|Name of customer||Average Basket Value||Average Basket Size||Stickiness||Lapsation||Recency||Frequency||Monetary Value|
Each of these concepts has to be understood as follows;
Average Basket Value =. Total value of billing divided by the total no of bills in a given period
Average Basket Size = Total no of categories of products purchased by a customer from you
Stickiness = These are customers who buy one product category from you and buys another category from someone else , even though you manufacture this product
Lapsation = Customers who are no longer billing with the customer are said to have lapsed
RFM = Recency, Frequency, Monetary Value are three metrics which have to be analysed as permutation of each other.
Frequency = No of bills billed for a customer in a given time frame
Monetary value = Total value of billing in a predefined time frame
In a nutshell
The above named 8 metrics are the bare minimum that every marketer should track and follow to be able to make informed decision making in Sales and Marketing.
It is not a good idea to deal with the function of Sales without sales metrics in place because that is exactly what a Sales Quack will do!