- Sales metrics are often referred to as Key Performance Indicators (KPIs) and can be used to measure the effectiveness of various sales tactics.
- Smart print service providers will find a way to align what they measure to their growth strategy.
- Establishing metrics that capture how well a customer’s needs are met during the entire sales process can help generate improvements in messaging, content, and customer onboarding processes.
By Karen Kimerer
The desire to compare before and after results has taken just about every industry by storm. Using images and/or data to highlight a contrast can be powerful, inspiring, and attention-grabbing—regardless of whether it’s a person taking control of his/her fitness and health, a product that can help restore prized possessions, or a case study that tells a compelling story of improved business results. Much like the other industries that leverage before and after results, savvy print sales organizations understand how to use sales metrics to capture a clear before and after picture. This article discusses the importance of sales metrics and explores how they can be used to make more informed business decisions.
Before, After, and Everything in Between
Few would argue that sales and the metrics behind them play an essential role in business success. Sales metrics are often referred to as Key Performance Indicators (KPIs) and can be used to measure the effectiveness of various sales tactics. Metrics support goals, determine progress, and help to identify any gaps that must be addressed to build a prospering business. While most people understand the importance of sales metrics, leveraging them can bring its own set of challenges. Several pitfalls must be avoided, including tracking the wrong metrics (i.e., those that do not reflect business results) or not taking the time to review the results properly. You can’t just measure for the sake of measuring—you must measure to learn.
Intended to evaluate the success of an individual or an entire organization, some standard sales metrics include annual achieved sales revenues, average order size, win/loss rate, revenue by product, and customer retention rate. Smart print service providers will find a way to align what they measure to their growth strategy. For example, if the priority is to increase the expenditures of current customers rather than attempting to onboarding new ones, an important metric might be year-over-year account revenue growth. Examining the data supporting this metric might reveal that customers are unaware of all the products and services you offer. If this is the case, your customers need additional education about your capabilities!
One of the most common and important business practices is comparing year-end sales metrics and year-over-year results. This exercise helps you measure different aspects of your company’s performance while identifying critical opportunities to improve sales efforts. This might seem obvious, but it’s also important to establish sales metrics to evaluate the performance of individual members of your sales team. When was the last time you examined who in your sales organization was bringing in the most leads and why? Also bear in mind that various members of your team will likely have their own unique strengths and weaknesses. For example, one rep might be highly skilled at expanding deals via upselling or cross-selling, while another might have an exceptionally accurate pipeline. Still another might have the best close ratio. Once you have this data on hand, it might uncover ways that you can restructure your sales efforts for better results. Maybe it makes more sense to move to a model that includes Sales Development reps as well as Account Management reps, or perhaps your metrics will indicate that certain salespeople need additional training and skills development.
Sales quotas, goals, and targets are all metrics that enable businesses to more accurately forecast results, maintain motivation across the entire process, and create a friendly competition within the sales team. In what may come as a surprise to some, many print service providers have yet to adopt a quota-based sales organization. Although it is well-known that goals are important, the significance of these goals in a sales role may be less clear. Within the sales process, goals are crucial because they provide focus, help trigger action, and can often prompt new and/or desired behaviors.
One of the more telling sales metrics is how quickly an opportunity moves through the sales process (i.e., how many days it takes to close an opportunity). The outcome of that metric provides a significant amount of detail as it relates to sales efficiency and productivity. As part of the bigger picture, it also highlights your cost of sales. Understanding the precise point during the sales process where deals typically stall or are lost makes it easier to address the underlying cause. These metrics alone can pinpoint problems that may be preventing your sales team from achieving higher sales results. Unfortunately, recent research indicates that nearly half of respondents are unable to ascertain where opportunities stall or fail.
Determining Where Sales Deals Fail
N = 176 Total Respondents
Source: Marketing and Sales Best Practices; KL Kimerer Research 2020
Collecting data to examine any weak points in your sales process can provide a road map for success as well as the details you need to more effectively move the opportunity through the sales funnel. The importance of understanding the metrics within your sales process cannot be overlooked.
Although most sales leaders would agree that sales metrics are best aligned to revenue goals, the customer satisfaction score card is another critical component to any successful sales organization. Overlooking the opportunity to measure the customer experience can backfire because sales reps are often tempted to force quick sales. Unfortunately, these quick sales are detrimental to the overall experience and will often lead to unhappy customers. Instead, it is vital to establish metrics that capture how well a customer’s needs are met during the entire sales process. This knowledge can help generate improvements in messaging, content, and customer onboarding processes. In today’s highly competitive environment, collecting customer feedback is essential.
Strategies for Success
When it comes to determining the right sales metrics for your business, there is no magic bullet. The best metrics for you will depend on your sales organization, client base, and company strategy. At the same time, however, establishing meaningful metrics will drive better business results across the board. Certain strategies are vital to continued improvement, including the practice of linking selling behaviors to the goals and outcomes that you seek.
It is important not to get sidetracked by measuring the volume of activities over the value of a focused approach. For example, it’s much better to make only 10 calls per day to “best fit” accounts rather than placing 25 random cold calls per day. By conducting research ahead of time, you can identify high-value accounts, reduce busywork, and improve overall conversion rates.
Finally, all sales metrics must be supported by a plan to measure business impact and inform sales leaders of the things that need to be addressed.
The Bottom Line
It does little good to establish measurements without taking the time to evaluate the outcome. By investing the time in developing a sound process, you can obtain a more accurate view of before and after results and also pinpoint the factors that ultimately contribute to sales success.
Karen Kimerer of Keypoint Intelligence has experienced the many challenges of expanding current market opportunities and securing new business. She has developed a systematic approach to these opportunities, addressing the unique requirements of becoming a leader in our changing industry. She is well-versed in 1:1 marketing, web-to-print, direct mail, book publishing, supply chain management, data segmentation, channel integration, and photo products.