A guide to sales success with smart sales math
How to effectively use benchmarking statistics to evaluate the sales process across the pipeline.
THE CUSTOMER JOURNEY: BEFORE IT STARTS
Focus on social media and mobile engagement. The new business is on smartphones and tablets, which are increasingly responsible for a larger share of all time spent online.
The increase in the number of marketers who see social media marketing as a critical enabler of product or service development (from 25% in 2014 to 64% in 2015) proves that it works. Invest more resources to leverage social channels.
Aberdeen research reports that companies that use marketing automation report 53% higher conversion rates (from first contact to MQL) and 3.1% higher annual revenue rates than companies that do not use automation.
Over the past decade, digital channels and tools have grown at rocket speed. This has affected every industry, and it would not be an exaggeration to say that now the customer rules, and speed is the new currency in business. With an ever-increasing number of responsibilities and tactics to test, marketers must strictly focus on metrics that affect both revenue and customer satisfaction.
Statistics:
- 13-22% of MQLs are consequently converted into qualified sales leads
- 30% of marketers say customer satisfaction is one of their most important metrics
- Customer retention rate is one of the top 5 digital metrics for modern marketers
- 70% of the buying process is now complete when the potential customer is ready to engage with the sale
Tip: An additional reason to invest in a marketing automation system is lead scoring. These tools score specific criteria that include demographic factors and other parameters that align with a company’s target market or ideal customer profile. When leads are objectively scored to indicate when they are ready to sell, marketing passes on better qualified leads to sales. By eliminating low-quality leads, sales productivity increases. For example, a recent study found that a 10% increase in lead quality generates a 40% increase in sales productivity.
BUILDING A PIPELINE: KEY INDICATORS TO CONSIDER
Insightful observations
Fast response times can significantly increase the productivity of your sales team.
The automation of key sales processes and the use of data science will pay off by enabling sales representatives to respond quickly and effectively to inquiries.
Companies that have automated lead management report a 10% increase in revenue within 6-9 months.
Today’s competitive sales environment imposes the need to pay particularly close attention to all sales metrics. However, not all organizations track the number of phone calls and emails, response and reaction times, and other activities of sales representatives. With such data, companies could be more successful in expanding their sales lines and achieving their goals. Here are the stats that every marketing professional needs to know. sales to increase response and conversion rates.
Statistics:
- A best-in-class telesales representative is rated as someone who makes 15 meaningful calls for every 100 outbound activities.
- The average representative of the Sales development makes 52 calls a day.
- Making contact with a customer at least 6 times can increase the contact rate by 138%.
Tip: Contact the potential customer within an hour of the initial inquiry. Companies that contact a potential customer within an hour of the initial inquiry are seven times more likely to qualify than those that wait even an hour longer. Companies that wait a full 24 hours before contacting a lead are 60 times less likely to qualify the lead than those that respond within the first hour.
METRICS TO FOCUS ON IN THE INITIAL PHASE
In the early stages of the sales process, if you want to be successful, you need to measure the activities performed by your representatives within a certain time frame. Pay attention not only to the number of actions taken to generate opportunities, but also to whether those actions are effective in closing sales.
Statistics:
- 44% of salespeople resign after one follow-up call.
- 65% of a sales representative’s time is spent on activities that do not directly generate new sales.
- Only 2% of sales take place at the first meeting.
Tip: Monitor and reward sales reps for actions taken early in the sales funnel to ensure a healthy long-term deal stream and predictable revenue. The criteria that matter most in the early stages are speed of contact, opportunity qualification, estimating the buying cycle and planning the right sales strategy.
PUSHING DEALS THROUGH THE SALES FUNNEL
Closely monitor your sales cycle and sales funnel conversion. Compare your indicators with market averages. Historical trends of your company’s pipeline will allow you to identify and eliminate bottlenecks, and provide data to make well-balanced and timely decisions.
Once you understand how effective and efficient your reps are at creating a pipeline in the early stages of the sales process, it’s time to convert that pipeline, which means identifying buyer behavior while understanding which opportunity should be first in line.
Statistics:
- The average sales cycle has lengthened by 22% over the past 5 years due to more decision makers involved in the buying process.
- The probability of successfully closing a sale at the “presentation” stage does not exceed 30%. Up to 10% of SQL reaches this stage
Tip: If you want to optimize your team’s performance and increase win rates, you need to know where your reps are having the most difficulty converting opportunities to the next stage. Analyzing the sales pipeline by stage shows exactly where opportunities are leaking, so you can identify exactly where sales reps need to improve.
MAINTAINING A HEALTHY SALES FUNNEL
Encourage your sales reps to maintain clean and accurate data on their production line. Increased data accuracy is essential for building accurate sales forecasts and making better business decisions.
In addition, a clearer picture of the production line will help increase the conversion rate and generate more revenue.
A deeper look at the pipeline allows you to determine how it has changed over time, whether it is growing in line with increasing revenue targets, and exactly how much revenue to expect from it. A shrinking pipeline needs to be evaluated quickly, and this can only be achieved if the net flow of opportunities in the pipeline is carefully tracked.
Statistics:
- Only 46% of representatives believe that their pipeline accurately reflects future business.
- 80% of representatives believe they are doing well in qualifying opportunities.
- The average slippage in the pipeline is 21%.
- 51% of projected deals are not closed.
- Companies that effectively manage the pipeline have 15% faster revenue growth than those that do not manage effectively.
Tip: Use dynamic processes in your CRM to help sales reps keep their pipeline clean. The automated process guides users through the steps, alerts them to outstanding tasks and notifies them of any information required at a given stage.
LEARNING FROM RESULTS: SALES PERFORMANCE METRICS
Analyze the buying cycle of the customers you’ve acquired to gain an in-depth understanding of their journey, key touchpoints, and the main reasons why they chose to work with you.
Analyze your churn rate and identify the sales cycle that best correlates with high customer satisfaction.
At this stage of the sales process, you should already be measuring your reps’ activity, building and analyzing their sales pipeline based on historical data, and tracking how the pipeline has changed over time. Based on this information and other analysis, you can evaluate your strategy.
Statistics:
- Lost sales productivity and wasted marketing budgets cost companies at least $1 trillion a year.
- Sales teams that held at least three hours of meetings per month saw their revenues increase by more than 11%.
- Sales teams that implement best practices in their organizations achieve almost 90% quota realization – almost twice as much as organizations that neglect best practices.
Tip: Share the insights gained during the sales process with your marketing team. This will help the marketing team use these insights to further improve their campaigns, messaging and resources. Better alignment of sales and marketing will help you achieve your revenue goals. Recent studies show that organizations that are aligned achieve an average of 32% annual revenue growth.
CUSTOMER RETENTION IS A REWARDING ART
Use a proactive approach to customer service. Instead of waiting for problems to arise, a company that implements anticipatory handling can eliminate problems before they occur.
Implement a relationship-based marketing strategy. Use marketing automation tools to deliver personalized messages to maintain strong relationships with customers after the sale.
There is a saying that the rule of thumb for customer retention is that you must be willing to spend as much to keep a customer as you spent to get one. A successful transaction is not the end of the story, but rather the beginning. Customer retention, repeat sales and referrals are the holy grails of any business. Effective customer retention begins with an organization’s first contact with a customer and continues throughout the relationship.
Statistics:
- A 2% increase in customer retention has the same effect as a 10% reduction in costs
- Reducing the customer churn rate by 5% can increase profitability by 25%.
- Between 40% and 62% of customers switch brands if they are dissatisfied with customer service, even if they are satisfied with the product
Hint: 88% of customers will not purchase again from a company that has ignored their comments or complaints made through social channels. Making customer service a key part of business strategy sounds like a given, but it is not always put into practice. Treating CRM as a cornerstone of business development and a key element of strategy can potentially increase customer retention rates up to 90%.
PROCESS OPTIMIZATION BASED ON SALES MATHEMATICS
Why effective sales processes are important:
- 53% increase in the number of forecast deals won
- 65% increase in the number of sales representatives meeting their quotas
- 88% increase in the number of companies reaching booking targets
The sales process consists of the steps that sales representatives must take to sell a product and should be mapped out as a complete customer journey. This will help identify the activities that sales reps need to perform to successfully move an opportunity from one stage to the next. Therefore, the sales process should be created and formalized, while providing representatives with a clear understanding of all the steps in the process so that they can determine what actions they need to take to successfully close the deal.
Developing a formal sales process means having clearly defined milestones and milestones that are understood by all sales representatives. Your sales team shouldn’t have to guess what stage a deal is at or how they should manage opportunities at each stage.
Statistics:
- Win rate exceeds 50% for 2/3 of companies that have a defined sales process
- Companies that use a well-defined sales process are 33% more likely to achieve high results
- Companies that said they had a formal sales process generated 18% more revenue than those that used an informal process
Tip: In order to make incremental changes in the sales process, a thorough analysis and understanding of the important factors is necessary. Use sales metrics Tip: as a basis for creating a dynamic and flexible sales process that will help you improve performance and achieve sales goals.
SUMMARY
With more than a trillion dollars spent annually on sales teams, maximizing sales productivity is a key goal for any company. While all sales organizations are different, it is always important to measure KPIs and results at every stage of the sales process.
Sales is a numbers game. Having benchmarks to measure performance makes companies better prepared to work in the new sales environment. In addition, a process-based sales automation tool can help manage sales metrics to achieve the higher win rates that every company strives for.
There is no magic or quick fix for improving sales metrics – it requires careful analysis and understanding of important factors. Tracking the metrics described in this ARTICLE will help you create a dynamic and flexible sales process so you can improve your performance and achieve your sales goals.
