Sales Performance Analysis – The Vital Signs of Your Sales Cycle
Vital Signs – Give Your Sales a Checkup by Analyzing Crucial Data
Kimberly L. McCall is on target in her article, “Vital Signs – Give your sales a checkup by analyzing crucial data†in the February 2007 issue of Entrepreneur Magazine. She summarizes six keys to monitoring sales performance with my additional commentary from a sales operations and executive-level perspective:
- Know your close rate: knowing your close rate and the time it takes to move across the sales cycle is critical to forecasting and to understanding issues in the sales cycle. Track confirmed interest to demo, demo to proposal, onsite demo to contract, contract to signing, and signing to implementation.
- Improve your qualified leads: whether it’s inside sales, website leads, or tradeshow leads, marketing should do all it can to improve qualified leads handed off to the sales team. Keep track of these leads as they move across the sales cycle, looking for need improvements in marketing tactics.
- Keep your sales cycle short as possible: See item #1. Once you identify each step in the sales cycle, you’ll be able to problem-solve on why there’s a drag in one step versus another. This will allow you to determine if there’s a process problem, channel problem, or other issues that may lengthen your sales cycle.
- Review sales rep performance: Set monthly, quarterly, and annual goals aligned with company goals. Each rep should have a clear understanding of their quota. They should have ample opportunities in their individual pipeline so they can achieve their close rate and sales quote. Sales managers or VPs of Sales should meet regularly with sale rep and sales team to review actual performance to goals. Discuss should ensue about problems and how sales management can help.
- Understand your profit margin per sale: while you may know your profit margin, don’t forget about the cost of sending out your CEO or CTO to close the sale. Often, these key players are sent to prospective client to close the deal, but at an opportunity cost to the company. If the CEO’s on sales trips, then that’s one or many things that CEO can’t work on that’s vital for the company or running the business. Try to understand why the CEO or CTO is need.
- Perform a regular sales audit: deep dives are invaluable; especially when budgets are set and you sales is budgeted into the budget as cash flow to cover company expenses. Monitoring key sales metric monthly and quarterly allows an executive team to prepare for any shortfalls and manage accordingly.
Key Metrics: Sales Dashboard and Reports
Sales is hard, managing that sales data is equally as hard. Think “garbage in/garbage outâ€. It’s critical that your company uses a CRM like Salesforce.com and those sales reps are mandated to keep their data up-to-date in SF.com.
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[...] 2. Sales Performance Analysis – The Vital Signs of Your Sales Cycle Working in sales is hard work. It’s hard for sales people, even harder for executive teams or marketing people to manage sale metrics for a highly effective sales team. Understanding sales performance analysis is vital for sales operations, executives, entrepreneurs, and marketers. [...]