How to choose the right metrics?
In today’s world, hundreds of metrics are available to gauge the performance of a company, and the main focus of management should always be on sales and marketing alignment, as they are responsible for driving the business. Therefore, using the right metrics to measure their performance is imperative.
But the main question is “Which metrics should I look at?”
Defining Metrics
Before we answer the main question, let’s begin with defining what ‘metrics’ means.
Metrics for Sales enable a company to:
- Identify and engage customer segments
- Spend less time crunching data and more time acting on it
Using the Right Metrics
Taken holistically; we can conceive that every company is on a different mission. Most want more efficiency, some may want to aggressively grow, and others may want to launch a new product.
How can we know what kind of metrics are suitable for assessing the performance of sales and marketing teams?
For the companies who are trying to grow aggressively, vital pipeline metrics can includes:
- Sales funnel conversion rates: Sales funnel conversion rates are the number of opportunities that advance through each stage of the company’s sales process. They pinpoint specific weaknesses in the sales process as well as show where the majority of opportunities are being lost.
- Sales cycle: At its most basic, the sales cycle is simply the period between a lead being recognized, and the date that deal is closed. An increasing sales cycle can indicate that reps are expending more effort to close deals and thus action is required.
- Win rates: This metric is calculated by dividing the number of opportunities the sales team has won by the total number of opportunities they are engaged with. This information is exceptionally valuable for management as it helps them to evaluate the performance of sales and marketing team.
- Lead funnel velocity: This is how rapidly sales and marketing progress opportunities through the sales cycle. This information can be used to augment, adjust, and/or eliminate campaigns that can make a massive difference in the efforts required in meeting the sales target.
For the companies looking at making their business more efficient:
- Time expended on core selling: Reviewing the time spent by the rep for actual selling activities. This excludes the time spent on looking for case studies, updating records, and other tasks that aren’t core selling activities. This metrics will help in reducing the time spent on ‘muda’.
- Time to quota: Measure how quickly new reps are matching quota attainment for the rest of the team. This will increase the use of best practices as quickly as possible and turn new reps into effective team members.
- Lead response time: When it comes to lead response, speed is vital to increase the chances of converting an opportunity. Research confirms that prospects equate a responsive company with a good company and analyzing this data will make the sales process more efficient and responsive.
Companies investing heavily in a new product should look at conversion rate metrics:
- What percentage of new product demos were won
- What percentage of prospect meeting’s progressed to the next stage of the sales cycle
- Average response-rate to cold-call emails for the new product
All of the above metrics will help in analyzing how sales and marketing efforts are contributing towards new product success.
Final Note on Metrics
There are ample metrics available, but it is critical to note that not all the metrics are meant to be taken into consideration. Limiting the number of metrics that management oversees is crucial, as a focused effort should be made based on desired outcomes and objectives. Therefore it depends on the goal of the company as to which metrics are most essential.
Sales Enablement for Effective Metrics
Sales Enablement can segment metrics according to company objectives and buyer personas, and help to maintain an edge on the competition.
Extensive visibility integrated with the CRM system allows marketing teams to segment interactions, understand value drivers from past behaviour, and present areas of focus for future success. These are combined with sales and marketing metrics (like the ones listed above) to enable adaptive sales cycles.
In essence, you’ll not only know where areas are lagging, but specifically why, and what was done by individual reps, and their leads, to achieve those metrics. Think of it as 3D metrics, or Metrics HD.
Are your teams making full use of sales and marketing metrics? Does your CRM system integrate standard sales metrics with predictive content consumption insights for effective buyer persona segmenting? Drop us a line, we may have a solution for you.
