Inside Sales: Metrics Matter
Our Inside Axon blog series is updated every Wednesday and features letters from executives within Axon. This week's post was written by Bob Lovering, Axon's VP of Telesales. Check again next week for more experiences and insight from Axon leaders.
There is no shortage of fitness trackers on the market today, from the Apple watch to the Fitbit and its many variations. The majority of these tools track common metrics that help us achieve our health goals. They tell us our resting heart rate, current weight, steps walked, stairs climbed, amount of sleep and activities needed to burn calories. This is all data that helps us measure our daily progress and make adjustments as needed.
Why measure at all? Without setting a goal, you will never know if you were successful. You must be able to determine the level of success that you achieve, and measuring your progress becomes a motivator to help you stay on track. The same is true for sales, especially Inside Sales, where we have numerous data points to help predict success. But what metrics should a sales manager pay attention to?
First off, you need to determine what is important. It is common for front line managers to focus on activity and the obvious: the number of customer calls, talk time, customer visits, demos and pipeline created. These are key indicators to determine if the new reps are performing the correct mix of actives that will yield success later. Considering sales people get paid on performance, quota attainment is the best way to show achievement and measure success.
Next, we must drill down within the sales funnel to understand the specifics around demand. Looking at deal age and average deal size will help with forecasting. My favourite metric is Sales Velocity, which refers to the average length of time it takes for new leads and prospects to become closed deals, as well as the average amount of time it takes for a lead to pass through each part of the sales process. This clarifies potential jams in the process and allows us to follow up correctly. Other metrics like Expired Opportunities and Opportunities Closing with No Recent Activity are key indicators of how well a sales rep understands their pipeline.
Finally, we should look at metrics to help build future success, such as lead response time, the amount of time it takes for a sales rep to follow up on an initial contact. Research from the Harvard Business Review tells us that leads that are contacted sooner are nearly seven times more likely to qualify. Did we lose because of a product feature or cost? The Closed and Lost analysis is another great indicator, and can help us understand how we can improve the odds next time. Lead source and lead conversion rates help determine where demand originates and the quality of the demand. A strong partnership with Marketing is key, as both teams need to align to guarantee marketing spend is allocated correctly.
‘If you can't measure it, you can't improve it’.
Most importantly, measuring performance is not just for improvement; measurement allows you to instantly spot areas of development within your sales team. Development opportunities should be focused on – they give a realistic picture of the situation, help identify the changes that need to be made, and are the first steps to devising and implementing a plan. Constantly seeking opportunities for development, setting the bar high, and staying on top of key performance indicators are essential to success on the inside!