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When you’re scaling an organization, it’s important that you’re able to measure the quality of your leads, pipeline, and sales talent. It important for business owners as well as sales reps, because simply adding people to the organization won’t necessarily result in more sales.
Today Rob Kall talks about the numbers that we might not be measuring and the importance of that data in helping your organization grow and improve.
Although they aren’t commonly measured, these data are the true drivers of your organization’s success.
Many sales leaders believe that the solution to any sales struggle is to throw more bodies at it. Though that option may work sometimes, it comes at a cost.
Eventually, you’ll find that you aren’t getting that much more out of the machine despite the added personnel.
In response to that problem, Rob and his company spent a lot of time looking at how you can move to tangible measurements instead of making decisions based upon gut feelings.
They have identified 5 metrics to improve your company’s performance.
1. Lead quality
Leads are not created equal. If I have 1,000 leads and a 2 percent conversion to close, that’s a super easy way to measure.
But if I get a referral from my rich uncle, that’s probably a much easier sale than calling someone who has never heard of my business or product.
We fail to pay attention to these factors, but they are important. Unfortunately, they can also be difficult to determine.
Begin by creating a baseline.
If you find that of 1,000 leads you generated in the last period, you were able to generate 20 sales, you can measure a 2 percent conversion.
You can also evaluate your leads by industry and location.
Once you understand those conversions, you can identify the leads that are not likely to close and stop wasting your time on them.
2. Prospecting effectiveness
Prospecting results in a lot of “no” responses.
The only thing that really matters is engagement. As a rep, you must get a certain amount of engagement every day.
Some people do it with sheer numbers. Others send fewer contacts but they personalize the ones they do send.
Whichever approach you use, make notes every single time an activity results in something. When you do, you’ll begin to recognize patterns.
Your numbers might look great, but if the outcomes aren’t there, those numbers don’t mean as much.
3. True pipeline
Rob points to a concept he calls a critical deal.
Some companies do pipeline reviews on a weekly basis but others do it on a daily basis. It’s a chance to see how well deals are progressing.
Consider the following three factors:
- Is it a big deal that matters? If it’s a $500 deal when typically your deals average $10,000, you probably shouldn’t even look at it. Is the significance there?
- Is it a deal that is unlikely to close? Consider the probability.
- Has something happened that would make you think it’s less likely to close? If you’ve had no communication with the customer or other indications that the deal may stall, consider those.
If these three factors aren’t there, you probably should focus on other deals. Move the critical deals forward and think about your deals in a structured way.
4. Product knowledge
On the rep side of the issue, reps must have product and industry knowledge. When you’re just starting out, you won’t have as much knowledge as those who have been there for years.
How well does this rep know the industry and the product? How does he compare to other reps?
Those with the best product knowledge won’t necessarily be the best performers. You can’t possibly know every single factor of the industry.
You simply must know enough to be credible. Those who haven’t reached that minimum threshold will struggle until they do.
Consider also closing ability or the ability to look at the last part of the deal.
When you get to the last stage of a deal, what happens? How often do you win? You’ll see patterns if you track this rate.
Does one rep have more of a killer instinct?
5. Engagement ability
If you are able to generate a lot of engagement, you’re probably a good communicator. You’re probably good at providing valuable information to the prospect.
Instead of measuring how the prospect responds to it, measure how much engagement the rep is able to generate.
The reality is that your sales team probably includes a few people who don’t have the right product knowledge and a few people that don’t have valuable leads.
You may have a few areas where your marketing team is spinning its wheels.
When you start addressing some of these shortcomings, you start to see amazing results.
By fixing the one thing that’s screwing you up, you unlock the potential for your sales organization.
As a sales leader, you probably have a gut feeling about your team’s morale. You know whether they are optimistic or not.
When negativity is present, it will affect your team’s ability to sell. It will also affect your retention and your on-boarding.
Though no product is perfect, there are frequently just one or two things that are causing grief.
- How do they feel about the materials they have?
- How do they feel about coaching?
- What kind of competitive pressures are they feeling?
You’ll likely identify multiple areas of improvement that will help your team perform better.
Many limiting factors don’t simply add up. They multiply.
If you can improve it a little bit, even if you can’t perfect it, you’ll get results from that thing. If the rep doesn’t know the product, train him. If the team doesn’t feel good about the commission plan, explain it.
If your product isn’t ready for market, figure out what you can do to improve it.
“Measure the Quality of your Leads, Pipeline and Sales Talent” episode resources
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