SALES METRICS FOR GROWTH

The critical elements that are likely to propel sales – Dr. Muneer Muhamed

Rising inflation, the steep difference between wholesale and consumer inflation, and tapering rural consumption are prompting brands to invest more in business development and sales closure.

An investment in adopting sales enablers calls for a business case to be made. But sales and marketing processes are mature, and there are good performance metrics and benchmarks to help evaluate investment effectiveness.

It’s necessary to first outline the impact on executing sales as a process.

Every enterprise has hundreds of sales factors that can be measured although the number of critical metrics for the success of any execution will not be more than five.

These five metrics most directly impact revenue attainment, and include the number of leads in the pipeline, average size of a deal, success rate, length of the sales cycle and total number of ‘active’ sales staff.

In fact, there is a mathematical relationship between these performance metrics in terms of their impact on sales revenue, which lead to great improvements in sales effectiveness. By measuring, reviewing and improving them incrementally, revenue growth can be massive – for example, a five percent improvement in each parameter or metric yields a 26 percent increase in revenue.

How substantial do you think a five percent improvement in revenue is?

If your salesperson is pursuing an average 100 leads a year, he or she should now look at 105 leads. And if your average deal is worth Rs. 100,000, a five percent increase translates into 105,000 rupees. If your current success rate is 50 percent, it will become 53 percent; and if the length of your sales cycle is 26 weeks (i.e. six months), it will reduce to 24 weeks. And lastly, if the number of fully-fledged salespeople is 50, the target for an ‘active’ headcount is 53.

So how will the sales process directly impact each of these performance metrics?

OPPORTUNITIES The critical benefit lies with the time required to create customer facing sales materials. By using automation tools, you can create reasonably good content for a given selling situation and make it flexible for personalised messaging to customers.

This will free up time to drive more important value adding activities.

One of our clients saved over 35,000 hours for their sales team in a year. You simply have to enable the sales team to deliver customer-centric messaging and you’ll see a remarkable improvement in converting leads to qualified opportunities.

AVERAGE DEAL Many businesses are into selling solutions in addition to their products. They rightly assume it will differentiate them from competitors who sell products that are increasingly similar in features.

A solutions selling strategy essentially covers a macro revenue generating capability and can be sold within a single sales cycle. It isn’t enough to tell the sales team to go sell solutions because they need to be trained properly first. Empower your sales team with the necessary tools to assess (stated and unstated) client needs and come up with viable solutions.

A client of ours struggled for a couple of years to make this transformation. This client found that the expectations and issues of furnace owners could vary widely, depending on their end products, price and quality. Technology can help in institutionalising upselling and cross-selling.

SUCCESS RATE Supporting sales staff in delivering specific customer value propositions will directly impact the success rate. To this end, you could equip their sales teams with industry and customer data, discovery guides, competitive intelligence and FAQs on objection handling.

Coupled with a cloud enabled handheld device, they’re able to save time and prepare for a sales pitch. By being able to answer all the questions that customers may pose and also proactively provide industry data, salespeople can garner the respect of clients. This confidence building exercise eventually results in sales.

SALES CYCLE Currently, sales cycles across all industries have been steadily lengthening due to issues involving both macro and micro economies. Economic conditions, customer uncertainties, policy indecisiveness, the increasing complexity of customers, and the number of decision makers and influencers involved in the buying process are impacting the duration of the sales cycle.

SALESPERSONS Attrition in sales is very high though it varies from industry to industry. It’s about 12 percent in chemicals and around 40 percent in retail. Recruiting and training new salespersons to get up to speed takes time and money, and calls for other resources.

Therefore, by upskilling and training your sales teams, and enabling them to be optimally active, you’ll be contributing towards retaining the most suitable talent and increasing the active headcount.

And if you can shorten the ramp up time, you’ll be able to increase the active sales headcount and boost revenue in the process.

Businesses are into selling solutions