Monthly Archives: July 2017

Sales Performance

Sales Velocity – The Most Important Sales Metric You May Not Be Tracking

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“The single most important sales metric for sales managers is the velocity of conversion through the funnel stages.”

– Jaime Muirhead, VP of Sales, RingLead

Speed is essential in the B2B world. This makes sales velocity an important metric to measure. However, most businesses ignore it. In this article, we’ll cover what sales velocity is, why you should care, and why it’s often overlooked.

What is sales velocity?

Sales velocity is the measurement of how swiftly deals get closed. A higher number is better. It is calculated with the following metrics:

  • Number of leads
  • Conversion rate
  • Average deal size
  • Average number of days to close

Use the formula below in order to calculate your sales velocity:

The sales metric Average Sales Cycle Length is the amount of time from your first touch with a prospect to closing the dea

The formula is simple enough but that doesn’t make the concept any less important.

Why is sales velocity important?

Wasting time is detrimental to the process. Thanks to sales velocity, you can measure how efficient you are. This makes it one of the most important metrics out there. A high sales velocity means your business is generating profits faster. Low velocity means something is wrong along the sales pipeline. You should find out what it is and fix it.

Why is sales velocity generally overlooked?

Sales velocity is easy to calculate, but it’s difficult to improve. You need to get into the details and seep through lots of data before you can get any answers. Of course, this process doesn’t need to be that complicated – there are big data companies (you can link to your product here) who handle this specific task on a daily basis.

Why is sales velocity more important than other metrics?

Sales velocity allows you to increase your profits by changing a few habits in the sales cycle. It’s a matter of gathering the right data and fine-tuning the process. Very few metrics can make the same claim without being full of it.

To put things into perspective, increasing your conversion rate by 10% and decreasing the average number of days to close by 10% gives you a 21% increase in your sales velocity. This is changing only two metrics in the sales pipeline. There are more options explored in this article on KiteDesk.

Conclusion

  1. Sales Velocity encompasses multiple metrics in a simple easy to follow number.
  2. Tracking Sales Velocity, allows for easier communication across your sales team since its so much easier for busy sales reps to follow a single number than 5 different metrics that constitute Sales Velocity.
  3. It allows for easy comparison of sales team performance across months, quarters and years.
  4. Most importantly, its discourages myopic focus on any single sales metric like revenue, opportunity conversion rate or size of deal.

For a sales organization to be successful it needs to fire on “all cylinders” and tracking Sales Velocity as a metrics ensures exactly that.

For more information about MoData offerings click here

Sales Management

Top 3 Sales Metrics to Track the Performance of Your Sales Development Reps

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In our article Why Sales Development Representatives Are Important to Sales, we covered what SDRs do and how they influence your potential clients in their buying decision. Now that you have a team of SDRs in place, you would be interested and curious in knowing how well they are doing the job they are hired for. In this part we will throw some light on metrics to track their performance.

More qualified leads increase conversion rates and lead to improved revenue. We’ve picked three important sales metrics to track performance of SDRs supporting field sales:

1. Time taken to schedule first appointment

SDRs primary job is to build relationship with the prospects who are business decision makers/ leaders across industry and who might see value proposition in your company’s product. So, from the time one such hot lead gets identified SDRs have to gauge when the time is right to make first contact and seek face to face meeting for a product demo.

Obviously, these outbound hot leads cannot be approached with a regular marketing emailer campaign or regular sales pitch. Based on their thorough research about client’s profile, budget and if at all they have the need to implement your solution, SDRs curtail and personalize the mail or any marketing material for instance.

If a SDR waits too long to establish that first contact there might be chances of losing this hot lead to your competitors. Hence, it is important for you to have hint of how long does it take for your SDR to make that first and right move because faster the first move, closer your sales team is to making a conversion.

This is where lead scoring comes into picture. Lead score is a method used by SDRs and sales executives to weigh the value of prospects based on certain metrics. In turn, this helps them to assign priority to leads and to have fair hint on the ideal time to move towards first appointment without moving too fast or too slow.

We’ve developed Data Scout keeping in mind the hyper specialization in the sales and marketing landscape. With the aid of Data Scout you can easily find out who your star SDR performer is and   predict opportunities which are likely to close across global sales territories and much more.

2. Lead to opportunity conversion ratio

This is a very simple but important metric. In sales classification it is also called MQL (Market Qualified Lead) to SQL (Sales Qualified Lead) conversion rate.

The basic difference between SDRs and Sales Executives  is that SDRs don’t have set targets. Sales Executives’ performance is measured by number of deals they close, while SDRs are held accountable for passing number of leads in the form of opportunities to the sales executives.

MQL is generally hot prospect who has shown interest in your product after number of touch base and contacts established by your SDR. The identified lead has moved to next stage of being called MQL. This lead now gets passed on to sales executive and is called SQL. This means that the lead is considering to purchase your product so is ready for a follow up.  Measuring just the number of MQLs presents distorted perspective because SDRs might transfer lesser qualified leads to the sales executives’ bucket. Hence, it is important to see how many qualified leads which get passed on by SDRs actually get converted.

3. Size of the deal

When it comes to fetching lead by outbound means, SDRs main goal is to bring big value opportunities, which implies better revenue for your business. This necessarily can’t be met through inbound leads in the pipeline. To achieve this SDRs have to spend substantial amount of time in doing research and gathering information about the new prospects. Pursuing starts based on the initial research work. SDRs become the face of your product when they are trying to court big deals and establish a rapport with them.

While all deals can’t be won, especially the big ones which are hardest, this doesn’t become the sole criteria for judging a SDR’s credibility. As mentioned before lot of effort and time are spent into designing numerous activities by your SDR to add one big client in your business portfolio!

Do you use data to know the size of various deals your SDRs are targeting? Which data-points do you consider to track your SDRs’ performance? What data and tool your SDR team uses to manage pipeline and time? We would love to hear that from you.

More resources on this:

Deciding What Metrics to Track for Sales Development Reps
How Can I Tell When An SDR Is Struggling?
How to Choose, Track and Improve Key Sales Development Metrics for Predictable Growth

For more information about MoData offerings click here

Sales & Marketing

Why Sales Development Representatives Are Important to Sales

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Through this post we will decode why SDRs have become an integral part of sales organization.

What are SDRs?

Sales Development Representatives or SDRs are the new-age Business Development Representatives in the sales and marketing ecosystem. They act as the liaison between newly identified prospects and sales executives.

Marketing’s job is to allure prospects through aggressive marketing campaigns and pass them on to the sales executives for closing the deal. SDRs’ job is to proactively look for leads, qualify them before handing over the details to sales executives.

Hence, there is a clear distinction between what SDRs and Sales Executives do. While Sales Executives close sales by sealing the deal, their focus is on conversion. SDRs do most of the preliminary hard work of looking for leads interested in doing business with you, walk them through your product, and finally judge before pushing them into the sales funnel.

Where do SDRs stand in the sales funnel?

SDRs being the first point of contact for your prospects, they accelerate lead volume through the sales funnel. Sales Executives on the other side of the sales funnel nurture those leads and bring them closer to conversion.

A sales funnel is a visual representation of the customer journey, tracking the sales process from initial customer awareness to purchase.

Not many organizations in various industries have introduced SDRs into their sales cycle. But those who have, they have benefited in terms of time savings and manifold additions to revenue. For B2B organizations, especially software vendors or companies functioning in the technology space it makes a significant difference if they make SDRs part of their sales strategy.

What do SDRs do?

So, if you are a B2B organization you can choose to have SDRs on board to see a great impact on your ROI. SDRs drive revenue in a dynamic market in the following ways:

  • SDRs not only develop extremely firm understanding of your product they also articulate its value proposition to the leaders at prospective clients that you are aiming to sign deal with. And this is all done without being too pushy. It is not wrong to call them your product’s consultant.
  • They do research to identify and target larger businesses. You can say that they go after “big fish” in the market which can often get missed by your Marketing team’s effort or inbound targeting.
  • SDRs are highly motivated sales professionals whose job is to single out prospects, get their attention and time for an initial product pitch. After the lead gets qualified they pass it to the sales executives for the rest of the work, which is following up and conversion!

There are two types of SDR’s:  outbound SDRs and internal SDRs. Those who specialize in getting promising leads proactively into the system are generally called outbound/ field SDRs.

Numerous marketing campaigns fetch both qualified and unqualified leads. SDRs supporting internal sales actively qualify leads and manage sales pipeline. However, both types of SDRs support sales executives in doing what they are best at – closing deals.

Through this interview Heather Young, VP of Sales Development for Rimini Street gives insight on SDRs role in B2B companies.

“We built an outbound team not only to focus on the inbound leads but also have a proactive focus on prospective clients that we believe have the highest likelihood of benefiting from our offering but they might not be engaged with us already.”  Heather Young

Why are they important for your sales organization?

Identifying new prospects/ organizations that are in line with your product vision and bringing them closer to the conversion is only one part of the deal. The end goal that might interest you is rapid increase in your company’s revenue. So, as a business leader, if you have an ambitious customer acquisition goal, it is profitable to have outbound/ field SDRs at the top your sales funnel.

SDRs have clear sense of the fact that times have changed and organizations (both at the selling and buying ends) have become intelligent, sophisticated and time conscious. Hence, they do a fair amount of research work on prospect/s before calling or emailing. Accordingly they make their pitch crisp, alter it around the new prospect’s problem without wasting either parties time and effort. Not only that, based on certain criteria they can also prioritize or even eliminate the identified prospect before pushing it further down the sales funnel. In turn they reduce sales cycle and save time and effort of other resources in your sales team. Moral of the story: better focus is directly proportional to better revenue!

“In this case, if your sales cycle is usually 4 months long, and your average deal size is $100K, then you’ll be making $300K per year per cycle. If you can shorten the cycle by just 1 month, to a 3-month cycle, you’ll make an extra $100k per year per cycle.”, The InsightSquared Blog

Hence, with the induction of SDRs your sales team can work like a well lubricated funnel with razor-sharp handling of clients who are more likely to convert and add to your revenue.

For more information about MoData offerings click here