I often get asked what metrics should be tracked. The answer is that it depends on what you are wanting to improve and what you want to measure. There is also a difference between metrics that are leading indicators and those that are lagging indicators. Leading indicators help predict the future, where lagging indicators help clarify what happened in the past and determine what changes need to be made. A good mix of the two helps to create a recipe of success.
With that said, here are a few key metrics to keep in mind.
Quote to close ratio: It still amazes me how many companies have to guess when asked about this. Using this metric will help with greater accuracy within company pipelines and it will also help show whether your people are quoting unqualified prospects. Also, if your industry requires highly paid technical resources that are brought in on quotes or presentations, you can determine if that’s producing a return. Connected is the cost of a proposal. Do you know that figure? It has been eye opening to many businesses.
Cost of a bad hire: Hire slow and fire fast. Too often companies do the opposite. Have you ever sat down and determined how much a bad hire costs your company, in salary, time, resources, benefits, and lost opportunity cost? The number may shock you. Depending on the size of your organization, consistently lowering this metric is a key to steady growth.
Number of new qualified opportunities in the pipeline: Opportunity numbers will help predict business for the year. This metric will help provide insight to the quantity and quality of sales reps’ prospecting behaviors. Tracking opportunity to close is another great, related metric.
The bottom line is, track what you want to improve. There are various metrics that can be tracked throughout the sales organization. If what you are tracking today isn’t changing a behavior, then stop tracking it, because a greater challenge exists in your organization. By discovering the key metrics that fit your organization’s strategy and tracking them, you will notice the path to success is more predictable. You’ll be able to take the guesswork out of your salesforce.
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