Baseball season is back, and in Boston, that means a lot of arguments about the Red Sox. Some fans are pointing to their struggling offense and mounting injuries and have already given up hope on their playoff prospects; while others recall the turnaround they made in 2013 and remain optimistic about their chances of making a run for it this year.
One thing that is remarkable about these conversations is that every fan finds statistics to back up their arguments. Of course, many of those fans come to incorrect conclusions — often because they don’t look at the right metrics.[contentblock id=71 img=gcb.png]
Statistics provide an objective measure for how players have performed in the past, and give us the means to make accurate predictions about what will happen in the future. The trick is to identify the ones that are the most meaningful for your team’s performance.
Sales Ops is the baseball operations of the business world — they dig into data to find trends in their team’s historical performance, identify the holes that need to be filled, and then put solutions in place to fill them. It’s their job to find the right statistics and leverage them to enable the sales team to succeed.
Just as baseball statisticians rely on RBIs, ERAs, OPS and the like to recommend management decisions, the sales operations team needs a set of objective metrics to decide which sales enablement tools to buy, settle on the most effective CRM workflow, and help managers to coach and mentor their reps.
These are the three metrics that provide the most insight into your sales team’s historical performance, and give you the information you need to set your company up for success in the future.
1. Sales Funnel Conversion Rates
What is it? Sales funnel conversion rates are the proportion of opportunities that progress through each stage of your company’s sales process. They are calculated by dividing the number of opportunities in the stages of your sales process by the total number of opportunities that enter the sales funnel.
What it Tells You: Conversion rates pinpoint specific weaknesses in the sales process. At a team level, they show where the majority of opportunities are being lost, and act as benchmarks to that reveal whether the sales team is improving in those areas over time.
For individual reps, looking at conversion rates for only the opportunities that they own reveals where they need the most support from their managers and the ops team. Reps are much more likely to adopt sales enablement tools if they have a concrete measure of how they will improve their individual performance.[contentblock id=71 img=gcb.png]
2. Sales Cycle
What is it? At its most basic, the sales cycle is simply the span of time from when an opportunity is opened to the date that it is closed. A more powerful method for measuring your company’s sales cycle is to break it down into the time that opportunities spend in each stage.
What it tells you: Sales cycles are a key metric of sales health. An increasing sales cycle indicates that reps are expending more effort to close deals, and if this trend is left unchecked, you will not be able to forecast and manage your bookings goal.
Looking at the sales cycle by stages provides another option for digging into individual reps’ performance and learning where the most friction is within the sales process. If a rep is spending the majority of the sales process guiding prospects through an evaluation of the product, it’s a sign that she needs training or sales enablement tools for that stage.
If there’s a trend across the entire team that shows where they are all losing the most time on deals, then it’s time to work with the VPs and managers to put solutions in place for that specific stage.[contentblock id=103 img=gcb.png]
3. Win Factors
What is it? Win factors are a more granular look at win rates, which are calculated by dividing the number of opportunities the sales team has won by the total number of opportunities they work. Win factors go one step further by segmenting individual and team win rates by a third variable such as product type or geography.
What it tells you: By segmenting opportunities by a third variable such as deal size or industry, it’s easy for Sales Ops to identify the type of deals that the sales team is most likely to win, and position reps to find and work more opportunities that are in their sweet spot.
This information is gold for Sales Ops, because it helps to build out an ideal customer profile, map out the path that customers follow, and set the sales team up to manage every prospect to behave like a buyer.
If you want the time and money you spend on sales enablement to have a lasting impact, base your decisions on cold, hard, performance metrics. These three metrics give you the framework you need to identify and eliminate inefficiencies in the sales process. Use them to make sure your team has the resources it needs to smash your bookings goal.[contentblock id=18 img=html.png]