Would you bake a cake without a timer? Would you make soup without a measuring cup? If you said yes, just go ahead and take me off the list for your next dinner party. If you’re a sane person, you clearly appreciate that specific measurements yield better results.
Since running a business is a lot like cooking a good meal, I wanted to share some of the important metrics you should stop eyeballing and start measuring.
Avg. Sales Cycle
How long does a deal take to close? It’s a question you need to answer in order to forecast effectively. If you don’t know your average sales cycle, forecasting would be like baking a cake without knowing what temperature your oven should be.
A simple way to track this is to calculate the difference in days between the Date Created and the Close Date of each Opportunity. Once you’ve got that number for your last 10 deals, simply take the average and you’ve got an easy benchmark for Avg. Sales Cycle.
Days in Stage
Recipes typically give you the prep time, cook time and total time because it’s good to know whether you’re going to be spending most of your time cutting onions or simmering the soup. The same is true for sales. Tracking how many days an opportunity spends in each stage helps you plan and forecast more accurately and identify inefficient processes.
Most major CRM systems (including Dynamics CRM) have a means for tracking where an opportunity is in the sales process and reporting on the length of time it spends in each step.
You don’t need to throw a deal out just because it’s gone cold. If you keep a record of your cold opportunities, you can reheat them like leftovers when you’re getting hungry.
The easiest way to accomplish this is to set a filter for opportunities that haven’t been closed (as Won or Lost) after a set period. Typically this period would be your Avg. Sales Cycle plus 10 – 20%.
Do you know who’s eating your lunch? Tracking the competitors you sell against is essential competitive intelligence, whether you’re winning those deals or not.
This can be done a number of ways but usually involves a dashboard or quarterly report showing the number of deals won and lost to each competitor. This will help you play to your strengths and address your weaknesses.