The next four blogs focus on best practices related to sales analytics to support an accurate sales forecast. The previous four best practice blog series of: Data Access and Enrichment, Sales Pipeline, Sales Opportunity Management and Sales and Sales Management Process set the foundation for accurate, timely, and relevant sales analytics to support the sales forecast. This is the fifth category of the blog series “Best Practices for B2B Sales Pipeline and Forecast Management started on January 21st of 2020. The ultimate goal of the analytics is to provide fact-driven information, interpretation and insights across the four key sales roles:
- Sales Leadership
- Sales Operations
- Sales Management
- Sales Reps
The Importance of Measuring the Right Metrics
There are many different ways to organize, categorize and analyze sales operations, sales processes and sales activities. It is important to develop a framework that resonates with your team. Here are a variety of different categories, methods and analytic techniques used to discuss and organize the metrics:
- Activity metrics - what is being done, emails, calls, demos, etc. every sales metric framework I’ve seen includes activity metrics.
- Result metrics - identify the results of activity metrics, i.e. activity metric - made 10 sales calls, result metrics - have two demos. - this is another category I’ve seen in every sales metric framework
- Sales Pipeline metrics - including rate of fill at the top of the funnel, average deal size, opportunities by stage, pipeline health, age of opportunities, etc.
- Efficiency metrics - tell you how efficiently your sales force is with converting leads to opportunities to sales (many times this includes activity and result metrics)
- Foundational forecast metrics
- Revenue Metrics - progress toward quota and goal
- Peer to peer analysis - these are important when figuring out what is working and what is not
- Trend Analysis - this helps measure progress and combined with peer to peer metrics helps focus on what needs to be done more and what needs to be done less
- Predictive Analytics - These are usually imbedded across different metric categories
- Diagnostic Analytics - these are also imbedded across different metric categories
- Sales Productivity -
- Sales performance
- Flow through - what has changed
- Ideal Customer Profile Analytics
- KPI’s [Key Performance Indicators]
- OKR’s [Objectives and Key Results
- Sales insights
If this list seems a little noisy and a bit chaotic, it is. Unfortunately, this chaos needs to be organized from a number of different perspectives. All of these categories of metrics may need to be included in how you measure sales, but it needs to be organized and optimized for user interpretation. It needs to be framed the way the company and the individual roles think about sales. The design needs to connect the dots from detail level transactional sales rep and prospect interactions up through how they impacted a sale and ultimately the sales forecast. Without connecting these dots, the validity of the information is suspect and nothing derails a meeting more than when someone says “I don’t think that number is right”. You spend the rest of the time figuring out if the number is right rather than the task at hand.
The organization is critical. We see organizations struggle to define:
- Measurements and reports to track progress toward different, maybe conflicting goals and objectives across multiple roles within sales.
- How metrics, reports and analysis fit together to provide a clear view of the situation and a means to verify the accuracy of the information
Measurement is critical. There is a causal relationship between how individuals are measured and how they perform. If focus is solely on activities, you might get the activities you want, but without the results. If there isn’t alignment between key metrics and goals, you may end up hitting the wrong goals.
Beyond Metrics and Analytics - a Framework
To organize the chaos, the analytics need to be organized in a framework. A framework provides a way to organize all the noise in a meaningful manner. As mentioned above, there are a number of different ways to organize the metrics. In this blog series, they will be organized based on categories of “what should be done differently based on the information. [Spoiler Alert] This blog series organizes metrics along three key themes:
- Sales Activity and Sales Efficiency - making decisions about what are the right activities, measuring the results and understanding the efficiency
- Sales Pipeline Reality - an accurate sales forecast requires an accurate sales pipeline so we put sales pipeline metrics in their own category. These help users make decisions about what constitutes a quality opportunity at each stage in the sales cycle
- Foundational and Operational Sales Forecast Analytics - a focus on the key levers and drivers answering the questions, what can I change to increase sales
Beyond Metrics and Analytics - a Story
Sales analytics should tell a story, actually it should tell three stories. It should tell a story of:
- The past, how we got to where we are today,
- The current, what is working now
- The future, what are we going to do going forward to hit our results.
Metrics should NOT be thought of as just a series of independent measures to provide a snapshot of the past, present and future health of the sales organization. It should be thought of as a tightly choreographed dance between the three timelines of information and between high level summary information and all the supporting detail, providing the ability to move between time and levels of aggregation and providing insights and interpretation as the user moves from past to future and summary to detail. It should include historic trend information to tell the story of how we got to where we are today. It should include peer to peer information across sales reps, product lines and territories to help figure out areas that are working well and translate them to other areas that aren’t working so well.
The next blog will review the best practices related to creating a sales metric framework along the three themes identified above. It will be followed by three blogs related to each of the three themes, including: measuring sales activity and sales efficiency, sales pipeline reality and foundational and operational sales forecast analytics.