B2B Sales Metrics Worth Tracking
Matt Heinz – President, Heinz Marketing Inc
Matt opened up showing a dashboard mock-up showing various charts and stats. The slide was titled, “Lies, damn lies, and…“. He emphasized be careful tracking metrics. Just because it’s something you can track, doesn’t mean it’s important or relevant. If it isn’t relevant, it shouldn’t be displayed on your dashboard. Considering the array of available analytics, choose carefully which metrics are right for your business that will drive higher sales and profits.
He recommended starting by looking at your Marketing Cost Per Sale. Do you track your leads from close and beyond? Have you identified your most efficient lead channels? Do you know your cost per lead source? Apply those efficiencies across other channels as best practices. Track those costs to referrals and post-sale to renewals.
Next, examine your company’s Customer Lifetime Value. How much are you willing to spend to acquire a new client? Do you know which clients generate the greatest profit? Then ask how will that drive sales incentives and behavior? Matt recommended involving your customer experience team in the sales process to define target customers and set expectations.
Address Nurture DatabasePerformance. Start by defining a “Nurture Lead” as it applies to your organization. What percentage of deals emerge from the nurture database? How are you managing this segment of your lead program? What tools are you using to track? If you have a nurture lead program, are you able to predict future revenue generated from database over time?
Sales Cycle Length varies in every company. Considering 70-80% of leads are not acted upon by sales in a timely manner, there is a lot of room for improvement in most organizations. Within an active sales cycle, do you know how long each stage takes once the lead is qualified and in market to buy? What internal or external catalyzing events exist that accelerate the deal velocity? Do you track length and duration in your lead-opportunity-sales model?
Is yourAddressable Market Size small enough? Great question. In this segment, Matt talked about narrowing your market to likely buyers, and underscored why the whole organization should define the market similarly. Do you have an accurate understanding of your place in the market? Does your sales goal align with market penetration expectations? Using your sales funnel, what is the realistic # you should use?
Adjust your strategy to yield larger deals. To increase the Deal Size, adjust your sales and marketing strategies based on revenue, margin, and lifetime value add potential. Sales pipelines are often padded with flotsam not worth pursuing. Sales reps call that job security, but management needs accurate forecasts. Which deals in your pipeline aren’t worth pursuing? What are your organization’s “sweet spots”? What are you doing to target and leverage those sweet spots into higher sales?
What is aQualified Lead? Do your sales and marketing teams agree on the definition? Have you implemented explicit next steps to manage and advance qualified leads? How do you manage and optimize qualified lead output from your marketing channels? Do you track #, %, and $?
How do you manage Referrals? Leads come from many sources, and referrals are often the highest quality if they come from a client or active prospect. Even so, Matt recommended segmenting referral sources to track if from prospect, client or influencer. What are you doing to drive the right referrals? Do you have a program or incentives in place today to drive this high value lead source?
Quantify yourBest Customers. Sales and marketing need to focus on finding more similar organizations to close. Determine if your most valuable customer segment is growing or shrinking. This is also related to Addressable Market Size. If sales and marketing attention is focused elsewhere, the organization is losing potential deals to competitors. Can you quantify your share of wallet? Do you know how much business you get from your most valuable clients?
Follow these 4 General Best Practices:
- Prepare an objective and action for each metric. If you can’t, get rid of that metric.
- Manage review sessions to next steps. Move the opportunities forward.
- Resist the urge to have the visibility this minute, publish a better dashboard tomorrow afternoon.
- Keep an eye and manage number creep.