One of the most commonly used sales activity metrics is the total revenue received by the business. While this is a great figure to know, there are many other ways in which sales activity can be measured.
Segmentation is a simple way of splitting this information, and discovering which member of a sales team is selling the most, which products are the best sellers, and what locations are hotbeds of sales activity may help you visualize how your business is performing – but there’s much more for you to discover.
Using targets to drive sales is a tried and tested method to get your sales team firing on all cylinders. Realistic targets are always better than unobtainable figures, and when your team members hit their target, they’ll feel a sense of satisfaction and accomplishment.
It’s always useful to see how each individual member is performing, and it’s also important to see what the team as a whole is achieving. Using the sales activity metrics report to show actual sales compared to the targets that have been set will help you identify the areas you need to focus on to improve your business.
If an individual is underselling, or a team isn’t performing as well as expected, you can concentrate your efforts on encouraging or training them to get the best out of them.
Sales Growth Metrics
Hitting targets is all well and good, but if the target remains the same forever, the business will never grow. Sales growth metrics will show you how your sales figures have changed over time.
There might be periods of the year that are slower than others, and so comparing current data to older data can give you an insight on why the figures are heading in a particular direction. You’ll also see how the average number of sales compare to the sales made in a previous period.
If your figures are consistently going up year on year, you know you are doing something right. If they are headed in the opposite direction, you need to take action quickly. Do you need more advertising? Better training? New or updated products?
Only you know what’s best for your business, but it is easy to lose track of your sales figures if you don’t compare them to past performance.
Lead Conversion Rates
Ideally, every lead that comes to your business will sooner or later become a paying customer. It’s a fact that this hardly ever happens, and most businesses have a much lower lead conversion rate.
The question is, why aren’t leads converting? Sales activity metrics will allow you to see which customers are buying from you. You’ll be able to discover how these customers initially found out about your business, and the process they went through to becoming customers.
As for those leads that haven’t yet taken the plunge, you may be able to identify what the hold up is. Perhaps they need to be taken through a certain process that the paying customers all completed before they handed over their money.
If you discover your lead conversion rate is particularly low, it may be time to review your whole sales process. By being leads, you know these individuals have an interest in what you are doing and what you are selling – you need to find out what the missing element is to get them over the line.
Product Performance Metrics
Your business may have just a few products and services, or it may have many hundreds of options for customers to choose from. Product performance metrics measure how well a particular product (or service) sells over a period of time.
You may discover that a product never sells. Is it unsuitable for your customers, or is it just not marketed well?
It’s possible that a product sells well in one area, but not in another. Can you discover the reason for this?
Lower product performance doesn’t always mean that the product is a failure, as it may only appeal to a niche part of your audience. Analyzing your product performance metrics will give you clues as to which products you need to examine more closely, which need to be promoted more, and which your customers seem to love.
Cost of Sales vs Revenue
Every sale you make has a cost attached to it, and so your sales figures may only represent half of the story. The cost of the sales you make may be related to manufacturing costs, or even to the time spent by the sales team going through the sale process with a customer.
Comparing the cost of sales to the revenue you bring in will highlight the areas you need to address to increase your profit. Can you lower manufacturing costs? Can the sales process be streamlined so the sales team need to spend less time selling the products?
The profit you make is the true measure of the success of your business, as revenue means nothing if it is all eaten up by the running costs of your business.
Using Sales Activity Metrics to Facilitate Growth
Being able to see the whole picture in relation to the sales your business is making will help you to understand where your business is and where it has come from. This, in turn, will help you to effectively plan for the future.
A motivated sales team will always try to achieve the best sales for you, and so setting targets that are appropriate for their skill level and for the products you are selling will always help to drive them to perform well.
Knowing how previous sales have changed throughout the year will also help you to make the little tweaks you need in order to get the best from your team, and in the worst case you’ll know which team members need training and which products need to change.
Learning from past performance will allow you to predict your future success much more accurately than simply relying on sales figures alone, and the more sales activity metrics you consider, the better.