In our last post we looked at measuring proposal success. But it takes time to get on bid lists and work through the proposal process. It can take months, even years. We need earlier visibility into the sales pipeline.
So, what measurements are worth looking at?
Before getting started, let’s look at why we measure in the first place. Don’t want to end up expecting a silk purse from a sow’s ear.
Sales measurements provide visibility upstream into future revenue so we can sleep at night knowing the doors will be open next year.
If we have employees selling, we want visibility into their efforts. We want accountability to see we’re getting value from our sales investment. This is true even if we’re the ones doing the selling.
Reality of Sales Measurements
The farther up the sales cycle a measurement is, the less reliably it’ll tell us what we want to know.
For example, the number of proposals submitted is a fairly reliable measurement of future sales. Multiply the number of proposals submitted by your historical win rate (use a conservative ratio for safety) and you can see what you’re sales will most likely be.
However, the number of meetings your salesperson had with a contact, or the number of mailings sent, doesn’t give the same level of clarity into future sales.
Although we can’t bet the farm on sales measurements, they do provide visibility for improvement. They enable us to see how well we’re moving opportunities through the sales cycle.
And they identify where we should make improvements to sales and marketing activities. Think response rates from direct mail.
And they still provide accountability for sales management.
Leading Sales Indicators
Tracking everything isn’t a good idea. Pick the vital few measurements and use them to improve results. Here are a few to look at:
- Response rate to direct mail or online mailing campaigns
- Initial contacts (live phone or face2face) between your sales reps & decision makers
- Site surveys or visitations (before a bid)
- Web inquiries
- Prospects from tradeshows
- Call-in referrals
- Sales referrals from your other divisions, or your vendors & subcontractors
For any or all the above, track:
- Conversion rates from responses into proposals into signed contracts
- Quantities by source (i.e. number of educational prospects responding from web)
What leading sales indicators do you measure?
Let us know what measurements give you the confidence your revenue’s on track.