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    02/13/2024 |

    The Top 10 Sales Metrics You Must Be Tracking in 2024 (Part 1 of 2)

    One month down in 2024 and 11 more to go. How is your sales effort going? Did you hit your number in January? How’s February looking? If you’re like most of the CEOs I’ve talked with over the past few months, you’re up one month and down the next. It’s hard to get any solid and consistent momentum.

    If this sounds like you, you’re missing something. You don’t have the right marketing. You don’t have the right sales team. You’re not training the sales team you do have. You don’t have the right technology. You need a revenue generation system if you want scalable, repeatable and predictable revenue for your company.

    But one of the elements of that system is the technology to inform you exactly what’s working well, what’s just working OK and what’s not working at all. You need the data and analytics to uncover insights and make informed action plans to improve performance month over month.

    Here are the first five of the 10 sales metrics you can’t and shouldn’t live without going into the second half of the first quarter. If you’re missing even one of them, let us know and we can help you set them up.

    1. Sales Cycle Days, First Sales Touch to Close

    I’ve asked this question hundreds of times and almost no one knows: When sales picks up the lead, how long does it typically take to close it? It’s not a complicated number, and any basic CRM should be able to tell you.

    You should know your sales cycle days and be tracking this number each month. You should be talking to your sales leadership, sales managers and sales teams about this number and working on ways to lower it. The faster you can close, the faster that revenue can be realized, and deals that might close next month now close this month.

    One way we help clients lower this number is by understanding where the deals get hung up. If your contract always ends up in your prospect’s legal department, then consider making your contract simpler so your business contact can read it, understand it and approve it.

    If your sales process bogs down when someone asks for references, then create a reference reel (a video of a customer talking about how great it is to work with you) and send that out before they even ask for references. While that might not cut out references entirely, I’ve seen it cut the requests by 75% and slice weeks off a client’s sales cycle.

    2. Conversion Rate Sales-Qualified Leads to Sales Opportunities

    This is the percentage of people who want to talk with your sales team and become legitimate sales opportunities. To be clear, some people will fill out forms, call in and request to speak with sales but not have the budget, acute pain or need need for what you do.

    This number is usually indicative of two things:

    1. The quality of the leads generated by your marketing activities
    2. How good your sales reps are at uncovering the issues that make prospects actual sales opportunities

    You might be wondering: What should this number be? It’s hard to say because every business and every industry is different. I wouldn’t worry about whether this number is good or bad. Instead, start with getting this number and then working to make sure it’s going up and to the right month after month.

    3. Conversion Rate Sales Opportunities to Proposals Submitted

    This number is reflective of how good your sales reps are at moving qualified sales opportunities through a process that gets the prospect to want and even ask for a proposal, recommendations or your agreement.

    This number should be very high north of 90% for almost every company. In some cases, a prospect may like your company and your services but want to wait for a proposal because the timing isn’t quite right.

    But if the prospect is qualified and there’s an opportunity, almost all of them should move to the paperwork stage of your sales process. Knowing this number identifies if there’s an issue here. Keeping track of this number ensures no issues pop up over the year.

    4. Close Rate, Proposals Submitted to Close

    This is an obvious one, but again, so many people don’t know this number. I ask this almost every time we’re talking with a new potential client, and 95% of the time, CEOs, marketing folks and even sales leaders have to guess or estimate this number.

    This should be something you look at weekly. This number should be 80% or higher. That might seem high to you, but you shouldn’t be giving any proposals, contracts or agreements to anyone who isn’t ready to say yes.

    If you’re not sure about the opportunity closing, work harder during the sales process to get the prospect to be ready to say yes. No one wants to work a prospect through the sales process only to hear no at the end. Salespeople want to get to no early, not late in the process.

    By working on this, you can double your revenue. If you have a 20% close rate and can get it to 40%, you’ve doubled your sales. Spend some time working with your salespeople on what happens during this part of your process. If you can upgrade this, it will make a major impact on your business.

    5. Average Revenue per New Customer

    The last metric in this first article on sales metrics is the average revenue per new customer. Again, it’s shocking how few people know this number. But tracking this and working to increase this number will have a major impact on your business.

    You need this number to do projections not revenue projections but revenue cycle projections. You have revenue goals, and these should contribute to helping you set lead generation goals that feed your sales efforts.

    But you need to know the average revenue expected from new customers to make all the math work. I’ve noticed a lot of companies make this harder than it needs to be.

    Some people say, “We have a lot of different types of customers.” Other people say, “Some customers spend $50 and some spend $5,000, and that makes it hard.” This is all true, and these comments are reasonable. But for this metrics conversation, simply add up all the revenue from new customers last year to get a total count of new customers and divide. Now you have an average revenue per new customer number.

    I get that it might not be perfect, but if you’re expecting to continue to have big sales and little sales across all your customer segments, this average revenue per new customer number is going to be valuable and something easy to track every month.

    Mike Lieberman, CEO and Chief Revenue Scientist headshot
    CEO and Chief Revenue Scientist

    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.

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