In my previous post, I discussed overall sales metrics and then focused on Prospect Management. In part two, I’ll cover sales force metrics for Opportunity Management and Account Management. While everyone may have their favorite pipeline reports, I’ll explore conducting a historical pipeline analysis for the Opportunity Management stage.
Opportunity Management Metrics
During this stage, sales leaders should track potential sales opportunities that move through the pipeline. Most people use leading indicators to better manage deals in motion, and those reports are very valuable. This is an intelligent practice for obvious reasons, but these reports and metrics are relatively common. I’ll mention a few of these in a moment, but first, I want to go in a different direction and share a report I have used for diagnostic purposes. I use it to unearth data-driven insights about where to explore further to improve performance in meaningful ways.
Historical Pipeline Analysis Report
This report is tricky to put together but well worth the effort. The metrics examined here are the number of opportunities per sales process stage and the conversion ratios between stages.
Here are some tips to build this kind of report.
Build around your process.
Start with your process stages and the conversion ratios between them. I’ve used both the number of opportunities per stage and dollar figures but favor the opportunity numbers.
Pick a time frame to examine.
I usually look back two to three times the average sales cycle. With short cycles, I might look back further; with longer cycles, perhaps less. In some companies, we produced the report monthly on a rolling basis.
Consider segmenting and create benchmarking groups.
Sometimes, based on the variance of the sales cycle by product, I’d look at individual product lines. Next, identify a group of known top producers (i.e. top quintile) in the buckets you’re examining (if, for example, you’re separating product lines) and gather their results. Do the same with the third or middle quintile of average/mid-producers.
Determine the reporting structure.
Then, create the report by manager, and their team members. You can create company, divisional, regional, or other roll-ups, but the front line sales manager reports are the most practical and useful, in my experience.
With the report built, managers can compare their individual reps to their own teammates and to the mid and top producers in the company. They can compare the raw number of opportunities per stage as well as the conversion ratios between stages. As I said earlier, what this report won’t do is help manage the current pipeline (although, interestingly, it can point out where to spend more time with reps’ current opportunities or where to poke in). What it will do is expose areas of strength and for improvement. This helps managers identify peer coaches or mentors as well as identify where they should focus to lift their team’s performance. We recommend this report in our Sales Coaching Excellence™ course for this exact reason.
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More Helpful Pipeline Reports for Opportunity Management
In addition to the Historical Pipeline Analysis Report, these are other pipeline reports I’ve found helpful.
Standard-fare process stages and conversion rates metrics: I like to focus on the big rocks of First Appointments Run, Opportunities Qualified, Proposals Made, and Deals Won/Closed. I look at stage-to-stage conversions, similar to the Rearview Mirror report above, but also like to explore the relationship between each stage and the outcome. Analytics purists will know there are dozens of pipeline metrics you can track. Remember, my strategy with metrics is to identify that things are going as expected or uncover problems and learn where to drill down to find a root cause.
Time in Stage: If you correlate this measure to outcomes, it can help predict when deals are likely to stall or end in No Decision status unless you take decisive action.
Qualification Scores: Whatever qualification system you use, having some way to track whether deals are qualified can radically improve pipeline quality and forecasting accuracy (if managers dig into the details behind the surface scoring). This is an active pipeline metric that can make a real difference.
Buyer Engagement Content: Similar to in Prospect Development, track the content usage and correlate with forward progress.
Account Management Metrics
Unless you sell a single product without services, and the whole world is your ICP, you likely have a book of business or territories with current accounts that you manage. Here are some metrics you’ll find helpful for strategic account management.
Net Promoter Score (NPS)
People tend to love or hate NPS. Nonetheless, it is a gauge of satisfaction and loyalty and an indication of the value you deliver and the customer experience you provide.
To determine NPS, you survey your customers and ask them to answer the question:
“How likely are you to recommend [Company/Product/Service] to a friend or colleague?”
Respondents give a rating between 0 (not likely) and 10 (extremely likely). Based on their response, they fall into three categories:
- Those with a score of 9-10 are Promoters and are typically loyal and enthusiastic customers.
- Those with a score of 7-8 are Passives. They are satisfied but not considered promoters.
- Those with a score from 0-6 are Detractors. They experience various levels of dissatisfaction, are unlikely to buy from you again, and may discourage others from buying from you.
Customer Satisfaction Score (CSAT)
For CSAT, you ask satisfaction-related questions on a 5- or 10-point Likert scale. On a 10-point scale, divide the number of scores from 8-10 by the number of total responses to calculate a satisfaction score. CSAT measures short-term happiness, usually based on a recent experience.
Customer Effort Score (CES)
The CEB’s research leading to their book, The Effortless Experience, showed that “96% of customers with a high-effort service interaction become disloyal compared to just 9% who have a low-effort experience.” Low effort correlates to high loyalty. This metric is about how easy it is for customers to interact with your company and get what they want (information, an answer to a question, a purchase). CES is also collected through surveys, by asking, “On a scale of ‘very easy’ to ‘very difficult,’ how easy was it to interact with [your company]” or an even more specific set of questions, based on what the customer was trying to accomplish. Since one bad interaction can skew the effort score, CES is often used in conjunction with NPS, to get a balanced picture.
Customer Lifetime Value (CLV)
When you know NPS, CSAT, and/or CES, you can check for the correlation between scores and revenue that accounts produce. This will help you establish values or ranges for Customer Lifetime Value.
Renewal Rate/Retention Rate
For SaaS or subscription services, renewal rates are a key measure. For all verticals, avoiding regrettable churn is essential (especially for key accounts).
Account Growth or Percent to Account Plan
At the end of the day, we remain sales organizations and must focus on growth. Yet, most companies don’t do a great job of setting clear account objections or creating logical account plans to achieve those objectives. Most usually track account growth in some way, although many don’t do so on an ongoing, iterative basis, monthly (or at least quarterly). You should. Establish SMART goals for account maintenance, recovery, or growth and track progress toward those objectives. If you can track your account manager’s activities and how they are executing their action plans, those can serve as leading indicators, of the end (lagging) results.
I hope this post has provided helpful insights, but despite the catchy title, it’s probably apparent that there are no “always-right” answers about sales metrics. You need to decide what is suitable for your company, in your vertical, with your ICP and market, and your products and services. There are so many other metrics we didn’t discuss. Here’s a strategy I’ve used in the past:
Gather all the metrics you currently track and brainstorm all the others you think you might need. Then, think “diagnostically” and organize them in four tiers:
- Tier 1: The dashboard metrics you need to run the business – the leading and lagging indicators required on a daily/weekly/monthly basis.
- Tier 2: The drill-down metrics if those in tier one indicate a problem you want to dig deeper into. These are the metrics to improve the business.
- Tier 3: The sidebar metrics you need for something specific, such as tracking performance milestones for new-hire onboarding (assuming some are different from tiers one and two above).
- Tier 4: The “put them on the back-burner” metrics that you may need to dig even deeper than the tier-three level.
We’d be happy to help you solidify your sales measurement strategy on your journey to improving your overall sales force. Please feel free to message me directly with any questions.
For more information on this, tune in to my webinar with Sales & Marketing Management as I discuss these metrics in-depth. Learn how to improve sales performance by using insights from your most important metrics.
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