8 Pipeline Metrics That Will Boost Your Sales
Sales quotas are relatively easy to track because these are opportunities that are won on a specific date, with actual dollars associated with each one. In a recent Quotable Podcast Denise Lee Yohn summarizes it by simply indicating that sales managers who only track quotas are lazy. Unfortunately, too many sales managers and executives only measure sales quotas to evaluate the performance of a sales person. Although sales quotas are important to the financial responsibility of each sales person, they only tell the story of what happened. Pipeline metrics, on the other hand, are where most of the focus needs to be when evaluating the performance of a sales person and a sales team.
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Pipeline metrics tell the story of what could happen. Your sales team relies on the pipeline to track opportunities, potential incoming revenue, the status of accounts and other important information. Salesforce, the leading CRM solution, can analyze many metrics associated with your sales cycle, giving you key insights capable of optimizing your processes. When creating pipeline metrics for your company, here are important metrics to pay attention to in your Salesforce pipeline.
Sales and Marketing Qualified Leads
How many leads meet sales or marketing’s qualification criteria? You can see the status of each lead at a glance, allowing your sales team to focus on productive prospects rather than giving each equal time. Unqualified leads may get directed to a more appropriate solution or taken through lead nurturing.
Your sales staff might look busy, but how many tasks do they accomplish in a day? You can view calls, client visits, meetings, emails and other sales activities for the team. Activity equals money, since these actions fill the pipeline and keep revenue flowing. Your sales team has to be focused on not only closing deals but filling the top of the funnel, working opportunities through the pipeline and nurturing current accounts. All of these require activity. By tracking this KPI, you are able to ensure all these areas are being completed successfully. In addition, you also ensure opportunities, accounts and contacts are being touched and worked by sales.
You can tell a lot by the number of prospects responding to the sales team. If you have a low response rate, you may be focusing on the wrong audience, using poorly targeted nurturing messages or lack effective sales techniques. This metric is especially useful for inside sales teams and business development reps. Generally these individuals are responsible for cold calling and following up on inbound leads. Use this metric to identify weak points in your overall process of filling the top of the funnel.
“The early bird gets the worm” is a common saying, and it holds true in sales. HubSpot reports 50 percent of businesses go with the first vendor to respond to their inquiry, so a fast response time is an important part of landing a sale. If your company is slow in this area, you can use Salesforce features such as automated responses and workflows, Salesforce Engage and Pardot to help your team address inquiries as quickly as possible.
Pipeline Stage Quotas
Although sales people have quotas on revenue they bring in they should also have pipeline quotas broken out by each stage. In my opinion this is the most important metric a sales manager needs to be watching as this will provide insight into what opportunities your sales people could be winning. The general rule of thumb is to place a pipeline quota of 3x revenue because generally sales people win about 30% of their opportunities. If you find that this figure is lower than you prefer, you can adjust sales efforts to make up for the deficit.
Closed — Won Accounts
This metric makes all your salespeople happy, as it indicates the accounts successfully won. These customers get handed off to account managers for relationship building, and the sales team may have opportunities to present additional solutions suited for their needs.
Marketing Content Usage
Which digital assets get the most use during the sales cycle? Your content creation team can focus on replicating the success of these pieces while looking for ways to improve underperforming assets. You can also discover if the sales team is overlooking content that’s well-received by prospects. They may not know how to match opportunities to the right pieces or lack appropriate access to these assets.
Ratio of Sales Cost to Revenue
Your deal size metric only goes into the gross sale associated with the account, but this ratio lets you see exactly how much the revenue is compared to the cost it took to win that prospect. If you’re spending too much on the sales side of the equation, you need to dive deep into any inefficiencies and weak points inherent in the process.
Salesforce empowers you to track many pipeline metrics, but it’s important to understand the ones most relevant to your company. Over time, you optimize your sales cycle and help your team to maximize the available opportunities.
Originally published at Galvin Technologies.