By David Wuensch.

When running your business, which functions do you find easy to manage? We have plenty of metrics to measure financial and operational aspects of our business, but what about sales? Sure, we can measure revenue and bookings. However, reacting to revenue and booking measurements can be a lot like closing the barn door after the cattle or horses got away. What can we really measure in sales that can help you run your business effectively? It’s so easy to say, “I want you to do more.” But we need to be able to identify what we want them to do more of.

Let’s divide sales measurements into four areas:

  • Business Results
  • Pipeline Health
  • Pipeline Impact
  • Sales Activities

I recommend that you track metrics in all four areas all the time. Review results in the first three areas and you can determine how important it is to review the Sales Activity performance. Sales Activity performance is the one area that salespeople can directly impact. However, you can simply congratulate your salespeople and thank them for their great results when the other three areas show great results. Why waste their time and your time when they obviously have things under control? Let’s look deeper into the first three areas to determine what to measure.

Business Results

All sales performance measurements start here. This is where we measure performance against your objectives for the business. Typically, small B2B business owners use revenue or bookings as a Business Result Goal. Other potential measurements could be profitability, market share, customer satisfaction or employee satisfaction. Tracking the business result goal such as revenue tells you if you are meeting your objective. Consider it your “Semester Grade.” For salespeople who are meeting their business results goals, do you stop there? I recommend that you peek at the next two areas to see what’s coming. If all three areas are meeting or beating expectations, your monthly one-on-one pipeline coaching session with your salesperson will be short and sweet.

“Great job on another excellent month! You met your goal and your pipeline looks good. Keep up the good work! Is there anything I can do for you before we end this meeting?”

Now let’s explore how we measure the health of the pipeline.

Pipeline Health

I recommend that you track three sets of numbers to measure the health of the pipeline for the company or salesperson:

  • Number and dollar amount of New Opportunities in last 30 days
  • Number and dollar amount of opportunities with estimated close date in next 30 days
  • Number and dollar amount of opportunities with estimated close date in 30-120 days

I chose 30 days and 30-120 days assuming that many small B2B businesses operate with 30 to 90-day sales cycles. Depending on your sales cycle, you may want to modify these intervals. You can calculate the goal for each of these three numbers by dividing the monthly and quarterly bookings goal by the win rate for the company or salesperson.

For example, Tony Rizzo has a monthly bookings goal of $250,000 and a win rate of 25%. ($250,000 / 25% = $ 1,000,000)  Tony needs to maintain the following numbers to have a healthy pipeline.

                Pipeline Metric                                              Pipeline Value

New Opportunities in last 30 days                                    $1,000,000

Estimated Close Date in next 30 days                              $1,000,000

Estimated Close Date in 30 to 120 days                           $3,000,000

When salespeople are missing their numbers, the most common cause is that they are not putting enough new opportunities in the pipeline. Tracking the number and dollars of New Opportunities in the last 30 days will help you know where they stand in this area. If there is an issue here, I recommend you jump to Sales Activity metrics and review New Appointments, Connections, Touches and number of Quality Touches.

If there appears to be a “healthy pipeline” that is not generating the proper business results, I recommend you jump to Pipeline Impact Metrics and review Win Rate, Stage Change Rates and Sales Cycle Length. One other potential impact to the pipeline numbers is Average Sales Price, which we will also review in Pipeline Impact Metrics.

Pipeline Impact

When our Pipeline is not generating the Business Results that we are looking for despite meeting the goal for numbers of New Opportunities, there are four metrics to evaluate:

  • Average Sales Price (ASP)
  • Win Rate
  • Stage Change Rate
  • Sales Cycle Length

When salespeople are not meeting the metrics for each of these four areas, we need to understand why they are missing the goals.

Missing ASP Goal:

  • Are they calling on the right prospect?
  • Are they selling the right products?
  • Do they struggle selling value?
  • Do they need to upsell and cross sell more?

Missing Win Rate Goal:

  • Are they calling on the right prospect?
  • Are they not properly qualifying new opportunities?
  • Is there a messaging issue?
  • Do they need to improve their presentations and proposals?

Slow Stage Change Rate or Long Sales Cycle Length

  • Do they struggle with follow-up?
  • Are they calling on the right prospect?
  • Are they not properly qualifying new opportunities?
  • Is there a messaging issue?
  • Do they need to improve their presentations and proposals?
  • Are they coddling old “dead” deals?
  • What do they fear?

One solution to these “conversion rate” issues is for you to conduct effective sales coaching. “Enroll” your salespeople to participate with you in a sales coaching effort to eliminate the roadblocks to help them convert more opportunities more quickly into won deals. My experience shows that improving the “Discovery and Qualification” step in the sales call process will heal most conversion related issues. I will add that the development of good sales team messaging is a critical foundation. (Refer to Mike Weinberg’s Company Sales Story in “New Sales Simplified” or Don Miller’s StoryBrand Framework for two examples.)

Sales Activity

When the salesperson is not meeting business results goals, they do not have a healthy pipeline and they are not putting enough new opportunities and new opportunity dollars into the pipeline, it is time to dig into sales activity metrics. There are three to five primary Sales Activity Metrics to review.

  • Appointments
  • New First-Time Appointments (when there is a focus on new account growth)
  • Connections
  • Number of Touches
  • Number of Quality Touches

The goal of measuring sales activity metrics is to determine what needs to be done to increase the number and dollars of new opportunities. Let’s step through each of these metrics.

Appointments/New Appointments: An appointment is a meeting between a prospect and a salesperson that was on both person’s calendars. A new appointment is an appointment with a new prospect or an appointment with an existing prospect about a new opportunity. Determine how many new appointments it takes to create a New Opportunity to set a New Appointment goal.

Chris Bryant also has a monthly New Opportunity goal of $1,000,000 with an ASP of $100,000. Her ratio of New Appointments to New Opportunities is typically 4 to 1.

Monthly Goals

     $ New                                                     # New                          New Appt/                     # New Appts   
Opportunity               ASP                   Opportunity                    New Oppy                          Needed

$1,000,000             $100,000                          10                                      4 to 1                                 40

Chris Bryant needs to set and hold 40 new appointments per month or approximately ten new appointments per week and two new appointments per day. Compare New Appointment to New Opportunity conversion rates with your star performers.

Does the salesperson need to create more new appointments, do a better job of creating new opportunities out of their new appointments or both? If they need to improve new appointment to new opportunity conversion, observe their sales calls and provide effective sales coaching.

  • Do they need to work on connecting better with prospects to earn trust?
  • Do they need to do better at helping the prospect discover pains, issues, challenges and motivators that can be helped?

Connections: Connections are conversations or exchanges by text, email or social media.  If the issue appears to be “not enough new appointments”, check the number of connections and compare the connections to new appointment conversion with your star salespeople. Not converting connections to appointments may be a training or coaching issue.

  • Do they connect with the same people or do they make new connections?
  • Read and listen to the messaging and delivery of the messages via email, text, social media and phone to determine how to help the salesperson.

If the issue is not enough connections, then we need to evaluate number of touches, especially quality touches.

Touches/Quality Touches: A touch is anytime in which a salesperson contacts a prospect. A touch can be a “like” on social media, a direct message on social media, an email, snail mail, a “comment” on social media, a text message, or a dial. Quality touches are those that most often lead to connections such as a phone call, text messages or social media comments. Other touches can be easily lost in the noise.

  • If the issue is not enough connections, the most common problem is not enough quality touches.
  • Improved messaging in all touches can also help motivate the prospect to connect when they have a need.

To manage sales effectively, it is important to know where you want to engage with your salesperson. Start with Business Results and work backwards through Pipeline Health, Pipeline Impact and Sales Activity. Value your time and the time of your salespeople. Help them where they truly need help. Effective use of sales metrics will point you to the right spot to help.