Welcome to Metric Monday, our weekly series detailing the critical metrics you need to track and understand to become a metric driven sales leader.
Today’s Metric: Month-to-Date Bookings Goal
The number you are measured against is your monthly quota. This magical number is grounded in past results, while simultaneously raising the bar for expected sales growth during the current month. As a sales leader, the pressure is squarely on you to navigate your team to this number.
Once you have set the monthly bookings quota, take this number and divide it by 30 or 31 (depending on the month) to get an average bookings value you need to close each day throughout the month. The month-to-date bookings goal is the solid green line on the chart below. This line connects each day’s bookings targets.
Example: Your monthly goal is $75,000 for November, meaning that each day you will want to hit a goal of $2,500 in bookings. Your target for the 12th day of the month is 12 x $2,500, or $30,000. The company in the graph currently sits above the daily bookings goal, and therefore is in a good position to finish the month above quota.
Measure Within the Right Context
The graph above also illustrates an extremely important point about this metric. Sales can be lumpy, with a couple of stagnant days recouped by a large deal. This happened on the 6th when the company closed a $36,000 deal, and simultaneously covered almost half of their monthly quota.
If you are like most sales teams, your bookings will fluctuate throughout the month, so this daily number is more of a estimate of where you should be at any point in the month. Establishing a daily close value builds safety guards into your sales process so you can identify poor sales performance before it’s too late in the month. This awareness increases your chances of hitting quota.
As you sit at your desk on Monday morning, absorb where your team is in relation to where they should be tracking through the month. If they are above, you are looking at a good month. But if your team sits below the expected total, it is time to start prioritizing open opportunities in Salesforce.com to find the deals most likely to close. You want to direct your efforts towards the highest value, least effort opportunities that can close before the end of the month. You can identify these opportunities by assessing where they stand relative to metrics like your typical sales cycle.
But I’m Always Behind the Goal!
Your response to this post so far might be something along the lines of “I’m always behind my goal until the last day of the month.” This is a very normal behavior among sales organizations. There is nothing like a deadline to spur a team into action. Though the best sales reps are always closing through the course of the month, those kind of reps are the exception more than the rule.
To still assess your performance this month to-date, you can also compare your bookings relative to bookings from previous months. Where are you usually at by this point in the month? Are you ahead? Compare yourself against the same point in time last month. Compare yourself against the same month, last year. Compare yourself against the your average monthly performance over the last 6 months.
By overlaying the curves for the completed months from the past on top of the this month’s curve, you can project your performance for this month. This is another method of building a sales forecast.
Tracking your sales trending with a month-to-date bookings goal provides you with an easy to understand snapshot of where you are in the month, compared to where you should be. Now it’s your turn to calculate your daily bookings goal and see how your sales stack up for the month.