Your sales strategy is one of the biggest determining factors in the success of your company. Close deals, and make them valuable deals, and you’ll have a steady stream of significant customers to drive revenue. But sales doesn’t work like a faucet that you can turn on and off. Instead, it’s a complicated venture, with tons of influencing factors. You can have a sales strategy that appears to be working, but fails to meet its full potential, or you can have a sales strategy that’s struggling with no apparent root cause.
To get more sales and maximize your revenue streams, you’ll need to continually monitor and adjust your performance, analyzing how effective you’ve been and making strides toward better overall rates. But how can you tell if your sales strategy is really “working” or working as well as it can?
Too Many Variables
There are many variables you can look at to determine your sales strategy’s success, such as close rates, client counts, and individual metrics for salesperson performance. In some ways, this is a major advantage; many variables mean many opportunities for improvement. Every possible point of adjustment is a possible point of advancement for your sales strategy. But this also presents a problem; if you know your sales strategy isn’t working as effectively as it could be, how do you know which variables to adjust, or worse, how to adjust them?
The best way is to understand the fundamental strengths and weaknesses of each major possible sales metric, and selectively measure them in a way that will maximize the insights you can garner.
The Metrics You Need to Know
First, let’s take a look at some of the key metrics you can use to evaluate the effectiveness and potential of your campaign:
Number of leads generated. Take a look at how many leads you’re actually generating; depending on the strategies your company uses, these may come mostly from the efforts of your sales team, mostly from your marketing and advertising campaigns, or in some blend of the two. This is the widest part of the funnel; you’ll want to score lots of leads, obviously, but you also need to make sure that the leads you’re getting are worth pursuing. It can be a hard balance to strike.
Lead response rates. Once you have a lead, you need to take action—or else the lead will pass into irrelevance. For example, you might have your sales staff follow up with any web leads within 24 hours, but what happens after that? How often do those leads respond to those inquires? This is the next step of the process, so it’s an important one to evaluate.
Time spent selling. Time spent selling is a bit of a qualitative measure of how your salesforce is performing. Your sales specialists should theoretically be selling as much as possible, doing tasks such as finding new leads, following up on old ones, or closing deals. If they’re bogged down with administrative work, or if they’re spending too much time on other responsibilities, you’ll need to change something.
Sales cycle metrics. Not all sales cycles are the same. In some industries, purchases are a relatively quick decision, while in others, it takes months of investigating and consideration before completing a deal. You can examine the respective progression of leads through the various stages of your sales cycle to monitor inefficiencies that exist at specific points.
Close rates. Close rates are perhaps the most straightforward and obvious metric to measure for your sales strategy. How many of your leads are actually becoming customers? If this rate is too low, it could expose a problem with your pricing, your proposals, or your sales staff’s ability or resources to complete deals.
Average deal size. You may be getting a high close rate, but how valuable are the deals you’re actually getting? If the average size of a deal is too low, you may end up spending too much time and effort, resulting in a net loss for your business. Seek bigger deals whenever you can.
ROI. Finally, you’ll want to measure the return on investment (ROI) of your sales efforts. How much are you paying your sales staff? How much are you spending on subscriptions and resources? Compare this against how much you’re actually bringing in with your strategy.
What to Do If Your Sales Strategy Is Failing
Knowing these metrics and measuring them regularly, what can you do if your campaign isn’t performing as well as you know it could? There are a few quality approaches that can point you in the direction of an effective change.
First, take note of any specific metrics that expose weaknesses in your strategy. For example, if you’re generating a lot of leads, but aren’t getting many responses, there’s something wrong between your generation and pursuit strategies; you might be getting low-quality leads, or there might be a problem in your outreach. This will give you a key starting point.
From there, make an adjustment. Unfortunately, there’s no exact science to this, because every company, every salesperson, and every lead will be different. The best thing you can do is change something; what you’re doing isn’t working as well as it could, so it doesn’t make sense to keep doing it the same way. Experiment with something new, and see what happens.
Even if your sales strategy isn’t failing, you should still commit yourself to ongoing improvements. You never know when you’ve reached your full potential, and there are almost always more chances to earn more revenue from your efforts. Monitor your performance metrics carefully, and don’t be afraid to experiment.
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