#2: Key Funnel Conversion Rates
It’s one thing to measure the volume of your pipeline, it’s entirely another to measure the velocity through it. That’s what a funnel report allows you to do.
As soon as you have a pipeline set up in your CRM, you can use Nutshell’s funnel report to track your conversion rates from stage to stage. This will show you which parts of your pipeline are responsible for the most lost or stuck leads, so you can make targeted improvements to your sales activities in those areas.
Of course, conversion rates constantly fluctuate to some extent, due to a number of factors. To avoid “paralysis by analysis,” you might want to focus on just one or two key conversion rates within your funnel—i.e., the ones that have the biggest impact on whether or not a lead becomes a customer—and take action when significant drops occur.
For example, at Nutshell we pay close attention to how many of our new leads convert from “pre-engaged” to “engaged” by completing specific actions during their free trials. Since our engaged leads are 20 times more likely to convert to paid customers, this conversion rate is a key predictor of success, and a constant point of focus for our Sales and Marketing teams.
Again, if you’re measuring everything you’re measuring nothing. Identify the make-or-break stages in your sales process, and keep a close eye on how well leads are traveling through them.
#3: Win Rate
Win rate refers to the percentage of leads that become paying customers. Since this metric can be influenced by any number of sales activities from the presentation to closing stages, improving a sluggish win rate often depends on measuring the performance of individual sales activities until you identify the real issue, then fixing it.
Some common culprits behind low win rates include:
- Not enough qualified leads: You’re wasting resources attracting leads that don’t actually have the need for your product or the ability to buy. Putting more effort into defining your buyer personas and focusing the messaging on your website and in your advertisements can help address this problem.
- Insufficient lead nurturing: According to a 2017 LinkedIn study, B2B decision makers read an average of ten pieces of content before making a purchase. So once you have a prospect’s email address, don’t let them slip away. Get helpful content in front of them on a regular basis and check in regularly by email and phone. Monitoring the open rates and click-through rates of your emails can tell you if you need to improve the quality of your emails in addition to the quantity.
- Specific reps underperforming: If you discover that your overall win rate is being dragged down by an individual, relative to the rest of their team, it’s possible that they’re lacking a bit of secret sauce that the top performers use to stay effective.
“It can be very instructive to compare what top performers know and do at each stage of the process, and what their relative success rates are,” says Bob Apollo, founder of Inflexion-Point Strategy Partners. “Armed with these insights into behavioral gaps, managers can coach underperforming reps with the goal of progressively narrowing the gap between the best and the rest.”
And it should go without saying: If you discover that your top sellers have outstanding win rates due to their own proprietary methods of moving a sales along, you need to formalize those activities within your team’s sales process, pronto.
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#4: Deal Size
In addition to turning more leads into customers, another clear sign that your sales process is working is that the average amount of each closed sale starts to increase. This demonstrates that your sales reps are focusing on the leads with the greatest need for your product, and that they’re putting more effort into upselling.
What you want to look out for is inconsistency. Review the average deal size by individual salespeople, teams, products, territories, and sources. Is deal size increasing steadily across the board, or are the larger deals only being driven by certain teams, products, etc.? Again, the goal is to identify the cause of those successes and make sure the whole organization is following suit.
#5: Sales Forecast Accuracy
Sales forecast accuracy reflects how close your actual sales are to your predicted sales for a given time period, based on the value of your pipeline and your overall win rate. By using a CRM with forecast reports, reps can also see how they are performing compared to quotas.
If your results start to drift away from your projections, determine whether it’s the result of circumstances—i.e., a new competitor emerging with a comparable product, the unexpected departure of your best sales rep—or because one element of your sales process is less effective than you thought it would be.
Keep in mind that if your business is implementing its very first sales process, it can take a few months of establishing win rates and fine-tuning before your forecasts are even close to your actual sales data.
#6: Sales Cycle Length
How long does it take your sales team to work a lead through closing, on average? A well-implemented sales process reduces time inefficiencies by letting your reps exactly know what needs to happen at each step to move a deal forward.
If you don’t see any notable reduction in your sales cycle length after implementing a sales process, one thing you can do is reconsider your qualification methods. Think about the traits of prospects who quickly say “no.” Disqualifying them earlier in your sales pipeline can help increase your win rate while empowering your reps to focus their time on buyer personas who are more likely to become customers.
But what if your sales cycle is hitting speed-bumps near the end rather than the beginning? The time from ask to decision is one often-overlooked element of sales cycle length that refers to how long it takes a prospect to make up their mind after they have all the information in front of them and the sales rep has explicitly asked for their business.
To reduce the time from ask to decision, make sure you’re providing all the necessary information to each decision maker within a company. In B2B sales, it’s rarely one person who has a vested interest when buying a product—you’re usually dealing with a committee that meets before they buy. By having your team doing the legwork and providing data that addresses each parties’ concerns, your prospects can make faster decisions.