Let’s say you are the VP of Sales for a $250M manufacturing organization and are currently using CRM to track your opportunities and manage your sales forecast. The good news is that at any given moment you can log into CRM and look at what the sales pipeline looks like for that month or next quarter. You can leverage this information to be more effective on your weekly sales call and you can give a real time update at the executive meeting. This summary is representative of the current state of many organization’s abilities to manage their sales forecast today in their respective businesses.
Have you ever stopped and asked yourself these 3 questions:
- How good is my team at managing their sales forecast or deal accuracy?
- How do I and my sales directors help coach our sales team to get better?
- What impact does it have on the organization if we improve our sales forecast accuracy?
Let’s take each of these questions in order:
How good is my team at managing their sales forecast or deal accuracy? The answer probably is “I have some data and an instinct for this but I don’t really know for sure.”
The fact is that unless you are tracking a number of metrics on your sales team’s performance, you won’t have a good idea of how good or bad they are. Here are our 12 recommended metrics to track to give you a deeper understanding of your sales team’s performance:
What if you had all of the above information about your sales team’s performance? This leads to our 2nd question:
How do I and my sales directors help coach them to get better? The answer is “There are a number of ways with the above data.”
Let’s take a few examples to illustrate:
Avg Revenue by Owner and Opportunity Stage – This insight will allow you to see how the average deal size changes as it moves through the pipeline for each rep. In this case you can identify where reps might be discounting to close deals, not capturing enough requirements in their discovery or too optimistic when they first get new opportunities. These insights can assist you in helping individuals improve their ability to manage their average deal size and the profitability on each deal.
Avg Days in Stage by Owner – This insight will allow you to see how long it takes in each stage of the sales cycle for each rep. In this case you can identify where reps might be taking too long in a particular stage of the sales cycle, or where they are hanging onto deals for too long. These insights can assist you in helping individuals improve their ability to manage their sales cycle time and to identify when they need to be qualifying out sooner.
Win Rate by Rep – This insight will allow you to see how likely each rep is to win a deal based on the current rating of that opportunity. In this case you can identify where reps might be too optimistic about “Committed” deals or how often they actually win when they forecasted a deal as “Best Case”. These insights can assist you in helping individuals improve their ability to manage their forecast accuracy better.
What if you and your Sales Directors were now able to more effectively coach the sales team with this kind of insight? This leads to our 3rd question:
What impact does it have on the organization if they become better at it? The answer here is there are a few key ROI metrics you can look at:
- Increase Revenues – With the above insight, helping the team improve close rates and better qualify their opportunities could conservatively have a 5 – 15% impact on your sales number. Using our $250M company example at the top, that would be $12.5M to $37.5M impact to sales
- Increase Average Deal Size – With the above insight, helping the team increase their average deal size by even 5 – 10% could have a $12.5M to $25M impact on sales
- Improve Operational Costs – With the above insight, the operations of the company can better plan the resources and inventory required to produce the products and/or services of the organization. If this could be improved by even 2%, that would add approximately $5M to the bottom line
- Reduce Sales Cycle Times – With the above insight, helping the team reduce their sales cycle could have a by 5 – 10% impact on your average sales cycle times
If you are ready to improve your sales coaching with this additional insight, reach out to talk to us about how we can help you implement these 12 key metrics. If you would like to see some additional information on how our solutions deliver these 12 metrics, check out our blog post: Sales Analytics with CRM and Power BI.