As sales leaders we all want predictable revenue from our sales team. To get that we often turn to data, but often gravitate toward the wrong sales metrics. The fact is that most sales leaders are focused on later stage sales pipeline metrics (opportunity to close), and neglect to monitor the early funnel sales metrics. The problem with this approach is that it only focuses on near-term goals. While these goals remain very important, they should not be the only key performance indicators the team is measured and rewarded by. By monitoring and rewarding sales reps on early sales activity metrics, you’ll be able to drive a healthy long-term pipeline of deals and predictable revenue for months to come.
There are two main categories of early funnel sales metrics that really matter: lead quality metrics and sales team management metrics.
Lead Quality Metrics: metrics that you can glean specifically from your sales team performance that help you understand what the relative quality of your leads are.
- Speed-To-Contact: Measuring the time elapsed before the first live conversation between a sales rep and the lead provides management with an understanding of the quality of leads being generated, especially when compared with speed-to-contact attempt (see below). For example, if you’re getting a lot of leads where the speed-to-contact attempt is fast, but the actual speed-to-contact is slow, then it means there’s not a high level of intention. If that’s the case, you need to talk to your marketing team and see what they might do differently to get you better quality leads.
- Qualification Rate by Lead Source: Most sales and marketing teams measure conversion rate and ROI by lead source but neglect qualification rate. However, this metric is really a leading indicator of how likely it is that what marketing produces will translate to pipeline. The sources that have a low qualification rate need to be tweaked or eliminated quickly.
Sales Team Performance Metrics: metrics that, as a sales manager, you can use to get better results out of each of your team members.
- Speed-To-Contact Attempt: Speed-to-contact is the time it takes from when a lead submits an inquiry to when the lead receives a response. This metric is a leading indicator of whether your sales people are covering the “basics.” Speed-to-contact is one of the most important sales metrics, because it is most closely correlated with your conversion rate. This metric also provides sales managers with insight into which sales reps are lagging behind or failing to contact leads in a timely matter.
- Key Metric Performance Index: For each of my sales teams, I track how their contact rates and qualification rates differ from the norm as a percentage. I chart my team according to the index and then typically dive into what is going on for low performers. On contact rate, I’ll work with them on the process they are following that is generating too little sales activity. For those underperforming on qualification rate, I’ll listen into some of their call recordings to determine if they are making the appropriate judgment calls.
By measuring and monitoring early stage sales metrics within your pipeline, you’ll have the ability to create an accurate map detailing how you can make or exceed revenue goals. With the metrics above in mind, and the right tools and technologies to monitor and take action, you’ll be well on your way to generating more predictable revenue than ever before.
About the author: Nick Hedges is president and CEO of Velocify and a 15 year veteran of the Internet and SaaS industries. Nick has spent the last six years helping organizations accelerate sales performance and recently became an advisory board member for the Association of Inside Sales Professionals. Nick is a Fulbright Scholar, holds an MBA with Distinction from Harvard and a bachelor’s degree from Manchester University.