Measure What Matters
As the saying goes, “You can’t fix what you don’t know.”
A surprising number of decision makers look at their company’s bottom line and immediately start to change products and services to increase revenue. That might work in some cases. But a more prudent approach is to include a review of your sales process, because it might be where you can make the most impact on your bottom line— with the least effort.
It doesn’t take “big data” or hours of poring over spreadsheets to precisely determine how you generate sales. And it doesn’t have to cost a lot of money to set up or maintain. Read on to learn how to do it.
Take Stock of Your Sales CRM
If you have a CRM (like Salesforce or Oracle), you can run reports that provide you with the information you will need. If you don’t, you can set up a simple Excel spreadsheet that will obtain similar insights.
How to set up a CRM spreadsheet
- List all of your customers. Make sure to separate them by first name and last name so you can easily export this list and upload to other programs later.
- Add fields for other relevant pieces of information (e.g., email, mailing address, company, etc.). The more info you capture, the better. You’ll be glad you did.
- Add columns to capture the following information:
- Where did the sale come from?
You need to know where your sales are coming from in order to focus your time and attention in the right places to obtain more.It is important to answer this question as specifically as possible. For example, did you meet this customer at a specific tradeshow? Did they find you online? Were they a referral? If so, who referred them to you?If multiple salespeople will be accessing your spreadsheet, make sure everyone is entering information that will yield insights. It’s not enough to say, “Tradeshow” for example; You need to know which tradeshow.
- Which product(s) or service(s) did they buy? You want to break this down as much as possible. Try to list the individual items or services they bought, rather than the category that they belong to.
- How much revenue was earned?
Depending on how you divide up your services or products, you want to be able to assign profitability numbers to each. This will allow you to review categories (“tradeshows” for instance) and determine your ROI by each tradeshow your company attended. This, in turn, can inform your decision to participate in following year’s tradeshow or not.
- How often does the customer purchase?
Do the majority of your customers buy once? Do they place an order every two months? The frequency of their purchases will help you understand how often to communicate with them.
- How can you contact the customer?
Ideally, you will already have an email address. Pay attention to whether or not the contact is the decision maker for their company. For example, if you have the bookkeeper’s info, make note that they are not the decision maker and try to obtain the necessary information..
- Where did the sale come from?
Assess Your Situation (Review Your CRM)
The numbers always tell the story. Use the information collected in your CRM to identify these four key metrics:
- Where your opportunities for upsell and cross-sell are,
- Who/what your best referral sources are,
- Who your best customers are,
- What your most profitable products/services are.
Now that you have a system in place, it will be easy to see what’s working and what isn’t. Review this information with your sales team, and use it to adjust your sales and marketing strategy.
Case Study
Learn how 19 Oaks helped a Maine based non-profit to organize a 5k race to raise funds.
Spring Clean Your Sales Strategy
If your salespeople are not achieving their sales numbers, do you really think they understand the activities needed to achieve the assigned quotas? Are the activities necessary for achievement clearly articulated and celebrated?
Successful salespeople understand the tasks needed to achieve results because they were either coached by a sales manager on the behaviors necessary to deliver the desired sales numbers, or they were blessed to figure it out.
Not all salespeople receive the same blessings. For your salespeople who are not reaching the desired results, the front line sales managers need to look into the employee’s numbers. The past two months are apparent, and the month you are in is here.
Here’s what you need to ask yourself about your sales process:
- Are sales reports reviewed and discussed with the salesperson?
- Are the sales numbers hiding in a CRM or dashboard with no conversation?
- Are tasks and activities being related to sales results?
Whether the salesperson is achieving the desired results or lagging in the sales numbers, both types of salespeople need feedback and an understanding of what behaviors and activities they need to perform for the desired results. You don’t know what you don’t know. People learn through reflection. If you want your sales staff be held accountable for results, the numbers need to be reviewed.
In most sales cycles, it is the activities and tasks assigned that will create the results you need.
Start the next quarter off by making sure everyone understands activities needed to make the numbers. The strategy needs to be communicated with clear expectations to be executed and an explanation of required activities—not just the number to hit. Just saying “close more sales” will not change behavior.
Look at your salespeoples’ activities and identify the gaps. Don’t go into another sales season without cleaning up from the last one. If the numbers are not where you want them to be, examine the processes that got you the numbers you have, and create next quarter’s winning strategy.
How to Determine the Length of Your Sales Cycle
Companies spend significant time and money acquiring leads. What’s your process for converting those leads into sales? Knowing how long your sales cycle is simplifies the sales process for your leaders, sales professionals, and customers—and ultimately makes it easier for people to buy from you.
Today’s customers use the internet and social media to learn about the companies that they do business with. Your buyers are engaged with you before you even know it! That means it’s more important than ever to develop a strategic sales process that lays out specific lead conversion metrics and clarifies expectations for development and growth.
What your sales cycle can help you achieve:
- Sales forecasting
- Performance measurement
- Needs assessment
- Allocations of resources
- Barrier identification
To figure out the length of your sales cycle, look at the stages in your process. Most CRMs have various stages to choose from. There are also reports to summarize each individual stage which identify where the potential customers are in the process. Begin measuring from when the leads were received.
Ask yourself these questions:
- Does your organization have an expectation set for when leads need to be acted upon?
- How long does it take your sales team to contact leads?
- Do your sales teams have easy access to lead information?
- Are your leads being managed and monitored for maximum results?
Once the leads are contacted by Sales and the buyers are engaged, the prospective buyer is now moving through the sales process. The decision makers are identified and the needs that your product or service will address are determined. At this point the buyer will need to make a decision.
Once the decision is made, look at when you received the lead. What was the length of time from when you received the lead to the agreement of services and payment was made? That is the length of your sales cycle.
Now that the length of your sales cycle has been determined, look at where in the sales cycle the most prospects/buyers are getting stuck and failing to move forward in the process. You can see where the barriers are in your sales cycle and can then develop a strategy to remove them.
Take a look at your individual salespeople and identify where the majority of their prospects are getting stuck. CRM reports can show where prospects are in the sales cycle and the length of time the prospect has been lingering in a stage. The information from these sales reports need to be shared with salespeople and used as a coaching tool by sales leaders. This enables them to understand where the barriers are in the sales process, identify solutions to remove barriers, and create more sales.