Learn how to improve your sales process by using metrics
An issue that regularly comes up with us when dealing with clients is working out the fact that sales success is more than just targets. Now, what I mean by this is that almost every business has targets of turnover, which means sales that they’d like to reach. Their targets are often based on the performance that they’ve had previously or an average based on the whole team’s target, but ultimately it’s all about the top line. The sales targets themselves. Usually, in many organizations, that’s all the salesman needs to know and often all that the sales manager focuses on rather than focusing on a handful of other metrics — measurables.
So, what do we mean by the metrics in sales? Well, imagine that you sell a product worth £1,000. It could be that you sell watches. You’ve got a sales team in your retail store which aims to sell these watches. It could be that your target for the year is to sell 100 of these watches. Now, if you’ve got a complex sales tracking in your business, you should be tracking how many people inquire about the watches all the way down to the number of people who actually go and buy it. These are two metrics which are effectively the lead to converted sale metrics in its very basic form.
Every business should be focusing on generating leads and then also converting those leads into sales. But there’s no real excuse for not knowing the numbers all the way down through the sales funnel. Those leads could come from a variety of different directions. But, whatever it is you sell, you should always know how many people inquire about (or express an interest in) a product or service, all the way back down to how many people actually buy it. This will give you something measurable. This means that if some members of your team are performing better than others, based on the same number of leads as everybody else, this then gives you two straightforward things to examine to try and improve overall performance.
Those two things are: why is it that this particular person is selling more or closing more deals than the others? And: why are those who aren’t doing so well not doing so well?
Knowing the numbers will give you this information and a starting point for improvement. A quick way to improvement across the board is to encourage those people who aren’t doing so well to learn what it is the successful person does, again for their own benefit and to the benefit of the company. This may seem a bit over-simplified but it seems crazy that many companies will hire external sales trainers when simply studying the star players and emulating what they do is a faster and cheaper way of upping the game.
This takes planning and it also takes knowing the numbers. The example of a watch is a very straightforward retail example. But, if you’ve got a lengthy sales process and various stages in the funnel then it’s a little more challenging. It could be that clients have to get through from the initial inquiry, through to perhaps having a meeting, then from meeting to formal proposal, from formal proposal to looking at finalizing the details and overcoming objections, all the way down to sale and where the client says, “Yes, we’ll do it” and is willing to part with some money.
But here’s the interesting thing: if you improved conversions by just 10% in each of those 4 stages then your sales would improve by 46%. But the best bit is that you only need 10% more leads at the top of the funnel.
So here’s what we mean:
- 10% more leads
- 10% more leads converted to meetings
- 10% more meetings leading to proposals
- 10% more proposals to sales.
Every single one of those stages should be measured. It doesn’t matter what you sell. Every business should know its numbers versus the number of people who inquire about a product all the way down through those various stages to how many people actually go and buy.
However, there is some good news; It’s more straightforward than you might imagine.
Most CRM systems, client or contact relationship management systems, will enable you to use these metrics. Salesforce and Infusionsoft are a couple of examples whereby they’ll be able to help you track how you are doing as you go down the funnel. So, the ultimate aim is to examine every step of the process to find where things are falling off and look to improve it.
As Peter Drucker said, “What gets measured can be managed.” But, if you’re not measuring your numbers, all the way through from inquiry or lead generation through to sale, then it’s going to be very, very difficult to do. You can generate all the leads you want but if your conversion processes are weak then you’re still going to struggle. You’re going to spend a lot of money filling the funnel and miss a lot of opportunities as they filter down through. It could well be that your sales are quite strong and your conversions are quite strong, but you need to fill the top of the funnel. Again, that’s where knowing these numbers and understanding how this is all put together will come into its own.
So, one of the things we would look to do at TyrrellCooper is to enable you to take a look at this whole process from the top to the bottom. We’ll help you to examine what you’re measuring and whether you’re doing it effectively. From there we can work out where there are areas of weakness that can be strengthened and areas that are strong that can be leveraged.
So, if you have any questions about this, or want to learn how to improve your sales process then give us a call on 0116 430 0020 or send an email to bruce@tyrrellcooper.com.