With Inbound Marketing And Inbound Sales, It’s All About Revenue Acceleration
When you get right down to it, most CEOs don’t care whether marketing or sales is responsible for you hitting your revenue targets. They only seem to care when you fall short. If that’s the case, it seems reasonable for sales and marketing to finally get together and work as a revenue team to drive revenue acceleration.
One of the best ways to do this is to start looking at both sales and marketing mathematically by applying science, data and a results-driven approach to understand what’s working, what’s not working and how to fix those aspects that are not working. Lately, a lot has been written about marketing and the metrics associated with performance, but now the science of sales is getting ready for prime time.
We’ve been able to apply the same scientific approach for improving marketing to improving the performance of the sales team, too.
Here are the top metrics to be looking at and some tips on how to improve these metrics today.
When it comes to science and analytics, I like to start at the 30,000-foot view and work down, unpacking interesting metrics until I find the high-impact areas that will drive the most lift with the least amount of effort. To do that, the full-funnel view of your sales and marketing efforts is where to start.
How many website visitors are you getting each month? How many of them are converting? This is the site-wide conversion rate. How many of those leads (also known as marketing-qualified leads or MQLs) are actual sales-qualified leads (SQLs), or in other words, people who want to talk to you? An MQL might be someone who just wants a whitepaper. They’re still a lead, but they’re not ready to speak with you.
The SQL is someone who wants to talk to you. They might not be a sales opportunity, but they want to talk. What is the conversion rate of SQLs to sales opportunities? A sales opportunity is when there’s business to be won. They have the pain, you’re talking to power and it’s a perfect fit for what you do. In addition, the next step from that initial call is to get recommendations or a proposal together. That’s a sales opportunity.
Now you need to know your conversion rate on sales opportunities to proposals submitted. It won’t be 100%, but it should be high. Finally, what’s your conversion rate on proposals submitted to new clients signed? Again, this should be very high (in the 90% range). You should not be doing proposals unless the prospect is serious about hiring/selecting your firm.
Once you run through your entire funnel mathematically, you’ll see some very interesting metrics. For instance, what percentage of website visitors turn into new clients? It might be a very low percentage rate, but you’ll now see the benefit of driving up website visitor numbers because it will produce more new customers.
I’m talking about the conversion rate on proposals submitted. In our work with clients around sales enablement, this number is almost always a lot lower than it should be. You should not be losing 50% of your potential customers at this stage. Your win rate on proposals submitted should be upward of 80%, and when you lose, you should be very clear on where in the sales process you missed a signal or skipped a step.
Here is an example. You successful identified the power as the VP of ops. However, you missed that while the VP of ops was assigned the task of finding a new vendor, she also had to convince the entire board why you’re the best option. She never told you that until you had already submitted your proposal to her. Now she’s telling your story to the board, and you know she’s not doing it as well as you could have done it.
This is an opportunity to adjust your sales process, adding one single question that confirms the decision-making process. With that change, you should see an increase in your close rates over the next few weeks. Knowing the numbers provides the insights you need to make adjustments that positively impact the numbers.
Length Of The Sales Cycle
You can’t guess at the length of your sales cycle. You have to know from the first time a prospect visited your website, talked to you at a trade show or met you at a networking function, how many days does it take for them to become a client? Is it 30 days, 45 days, 100 days or 300 days? You should calculate that. The only way to do this is with visibility into all your sales cycles via a CRM.
Once you know and start making adjustments, you can drive significant improvement by working hard to shorten whatever your cycle is currently. To give you a practical example, let’s talk about references. When your prospects request references, you could be looking at a week to two weeks for references to check in, schedule a call, attend the call and cycle through all the calls. Plus, it’s annoying to almost everyone, including the clients providing the references.
One way we shorten the sales cycle for clients is to provide what we call “reference reels.” These are short video clips from the same people who would be on the reference calls anyway. If the video links are sent proactively, you can potentially avoid the entire reference check dance and reduce your sales cycle by one to two weeks.
A Prospect’s Interaction With Content And Their Propensity To Close
You’re also going to want to keep an eye on some more obscure metrics. For example, a lot of research and data shows the more often your prospects engage with your content, the more likely they are to close.
The more pages they visit on your website, the more content they download from the site, the more blog articles they read or the more emails they click on, it all points to engagement and propensity to close.
Some advanced sales teams are using technology that allows you to set up virtual rooms where content is posted. Access, view and time metrics are then collected for each prospect’s interaction in that room. Here is an example of a tool called Journey Sales that enables rooms like this to be set up, managed and integrated into your sales process.
Individual Rep Performance Profiles
While it’s important to look at these numbers on a company level, it’s more important to do it on a rep by rep level. By looking at these numbers on a rep level, you quickly see who’s struggling at what stage of the process and can pinpoint ways to help them. You’ll also see what content each rep is sharing, the results produced and who else is using or not using that content along with what their numbers look like.
By taking a more scientific approach to sales, you prioritize those areas that are underperforming and then work to improve those areas. The prioritization is usually based on what’s going to take the least amount of effort and have the biggest impact. For example, if your proposals to new customer conversion rate is only 50%, then I’d take a long, hard look at the paperwork you’re sending. If it’s filled with legal jargon, it’s going to take longer to review, require legal, make the prospect nervous and could potentially convince the prospect that you might be a difficult company to work with.
By simply changing the paperwork to something simpler that outlines the nature of your new business relationship, you could improve the close rate on proposals submitted to 70% or even higher. Big impact, little effort. But you wouldn’t know to focus on this if you didn’t have a handle on this key sales metric. By the way, this small change would have double the impact on the revenue side of the business by shortening the sales cycle, which could contribute to 20% more new customers because they’re closing more quickly. Science in action!
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Posted By Author Mike Lieberman, CEO and Chief Revenue Scientist
Mike is the CEO and Chief Revenue Scientist at Square 2. He is passionate about helping people turn their ordinary businesses into businesses people talk about. For more than 25 years, Mike has been working hand-in-hand with CEOs and marketing and sales executives to help them create strategic revenue growth plans, compelling marketing strategies and remarkable sales processes that shorten the sales cycle and increase close rates.