Are you getting some pressure from upper management about your sales performance?
They don’t know why you’re not hitting your targets. But they want answers from you. For many sales team leaders and managers, it can be a stressful situation. You’re doing everything you can to try and lift performance. However, the results aren’t coming.
As a sales leader, it’s vital that you know what metrics you’re in control of. There are some that are the responsibility of other departments. How do you know which are which? Find out here!
What Sales Metrics You Can Control
There are many sales metrics you can manipulate through coaching and developing your team members. Here are a few of the most important ones.
Surprisingly, there are many different ways to measure conversion. The cleanest method is to divide the total number of sales over the total volume of interactions. Ideally, your staff should be able to close on the first conversation. If they can’t, you should train your team to achieve this goal.
Revenue Per Sale
You also have a role to play in the products or services your team sells. There is a bad habit for salespeople to project their individual circumstances onto customers. For example, if they believe something is too expensive, they will sell lower-end items, so they don’t impact the sale. However, this approach will hurt your revenue numbers. So you need to coach this behaviour out of them.
A sales metric that tends to go under the radar is shrinkage. It’s defined as the customers that return a product or collect a refund within a cooling-off period. It’s often why your volume changes as the month or quarter plays out. The trick is finding out why these sales aren’t going ahead. Is it because it wasn’t as described or it didn’t meet their needs? The answer becomes part of your coaching plan.
What Sales Metrics You Can’t Control
You should only focus your energy on the sales metrics you can control. So, don’t give these ones a second thought. Raise them with the appropriate departments.
It’s not your job to attract customers to your brand or sales channels. However, before you start asking for more volume, you need to ensure you can handle what is given to you. That means your conversion and revenue numbers need to be solid. But if prospect volumes are soft, let the marketing team know that more is needed to meet targets.
Customer Acquisition Cost
Some operational leaders with a financial background are interested in this number. It’s the amount of money it costs to convert a prospect into a customer. That takes into account the marketing, salaries of staff, and any commissions to be paid. You can’t control this. All you can do is demonstrate the value you and your team bring to the table.
We all would love prospects to open the quotes we send and respond immediately so the sale can get closed. But everyone is different, and it doesn’t always play out that way. Again, you can’t control your prospects. All you can do is provide them with a reason to join or buy in the first instance, so you’re not playing the waiting game.
Focus on the Sales Metrics You Can Control
You have enough on your plate as a people leader that you shouldn’t be wasting your energy on things that are out of your control. When coaching and developing your team, train them on improving conversion, increasing revenue per sale, and decreasing shrinkage. Communicate the rest to other departments and ask them to come up with a plan to support your team.
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