In my newest venture, we’re at that point where we have to start paying attention to classic sales metrics to start heading towards certain growth targets. As I’ve been going through the exercise with the team, I find myself being overly enthusiastic about how valuable the exercise is and how telling the metrics can be as to the health of the whole sales and marketing activity. Our focus has been on the following (we’re using simple Waterfall displays to visualize the results):
- Raw lead generation — a month by month capture of raw lead generation. I find this is typically the starting point for the sales metric build-up. As we’re in the critical period of our sales season, we started tracking by week for a while so we have a finer handle on whether the top-down goals can be met.
- Lead2Prospect – in our scenario this is when we convert a lead to a qualified prospect. This means the prospect is interested in our offering, will return a phone call or email and has expressed interest in visiting or learning more. We’re not sure what the conversion rate is as yet, but tracking this metric will start to generate a pretty obvious trend after a few months. We’re also fine tuning the message we deliver, the supporting materials that go with it and the systematic way in which we are staging the sales process — all things that are key to developing efficient conversion results.
- Prospect2Trial — this is our key metric as historically the trial tends to lead to a commitment event. The challenge here is a lot of time is spent during a trial and we’re not yet sure we have enough people and/or an efficient enough trial process to handle enough trials to reach our overall goal for the season. Nonetheless, if we can ascertain the conversion rate, it’s the kind of problem I don’t mind having. Our emphasis here is on proper follow up and providing as good a trial experience as we can. It involves many people on the team and is something we have to mature substantially for it to scale to the next level as we grow.
- Trial2Close — we expect to be better than 50% on this metric but don’t have enough accurate history to really know. We also can develop sales cycle lengths at this point which can factor back into the Plan line on the Waterfalls for next season. For now, we’re assuming high conversion rate.
In parallel, we’re starting to keep an activity table aligned with the structure of the Waterfall that tracks each marketing event we undertake and how many leads come out of it over time. This will give us a feeling for the impact length of each activity and whether or not a ‘termite mound’ is building (credit to Cadman for this term). As an example, we’ll have an ad in the Toronto Star next week — which is hard to track but reaches a very wide focused audience for us — and are also going to regional sports events where families hang out totally in our sweet spot — easier to track these as we get calls or we don’t, more or less right away.
So, sales metrics, waterfalls, conversion rates — all simple to put in place but extensively important to providing visibility as to whether the business is in a healthy state from a growth perspective.
Some challenges:
- being honest about what we classify as a qualified prospect
- owning up to losses and reasons for losses
- timely follow up — if its our sales season it is for our competitors as well
- being professional when we review the metrics so everyone is on-board with their value versus using as a reason to be critical
There is some more detailed material on http://www.insidespin.com/sales-topics.php#salesmetrics which goes into this in a more formal way. I’m enjoying this stage of our business development — let’s hope it allows us to get to the next stage efficiently.