Sales Metric These 36 metrics were submitted to an expert panel (Mark, Dan, and John). The panel was asked to rank these metrics on a usefulness scale. The top 5 were submitted to a group of successful CEOs.  These CEOs were asked to vote for Sales Metric of the Year.

 

 

And the winner is…Look-to-Book Ratio!

 

What is the Look-to-Book sales metric?

The Look-to-Book Ratio is the measurement of how many big deals were won or lost after the Chief Sales Officer visited with the prospect.

 

What does Look-to-Book do for a CEO?

The Look-to-Book ratio helps a CEO overcome the fear of bringing in an expensive vice president of sales.

 

What does it mean for a CEOs to use the Look-to-Book ratio?

CEOs who use the Look-to-Book ratio can answer the question “Do I have the right sales leader?” with confidence. A surprising finding emerged as we tried to name the sales metric of the year.  Sales leaders track metrics the CEO does not care about.  CEOs track sales metrics the sales leader has never heard of. For example, you won’t find these metrics on a typical dashboard. We asked our panel why the Look-to-Book metric was so important:

 

Our company lives and dies by the big deal. If my sales leader is not impacting these deals, he is not focused on the right things.”- CEO of SaaS firm.

 

My team determines my success more than anything else. The sales leader is on my executive team.  Measuring his effectiveness is very hard. There are many thing he gets credit for he does not deserve.  There are issues he gets blamed for he should not.  This cuts through the noise.”- CEO of commercial real estate firm.

 

How should you use this metric?

At the end of the quarter pull the top ten report.  On it are the ten biggest deals, won or lost, for that quarter.  Send this report to the 3rd party who is doing your win/loss reviews.  Ask the win/loss firm to modify its question set.  Consider adding:

 

  • Did you meet with our Chief Sales Officer?
  • Was this meeting in the beginning, middle, or end of the buying process?
  • Did you meet once or multiple times with him?
  • Did his involvement add value to you?

 

For example, if he met with 10 accounts and only one closed, then the Look-to-Book is 10:1.

 

What might you do with the results?

A quick, back of a napkin way to interpret the results is as follows. 

 

  • High visits/high wins- don’t change a thing. Your Sales VP is a super star.
  • High visits/low wins- you have a hard worker who is not talented.  Train him or replace him.
  • Low visits/low wins- a VP of sales who is focused on the wrong items.  Get him focused and see how he does with more attempts.
  • Low visits/high wins- talented sales leader sitting behind a desk.  Get him on the road.

 

Ask your win/loss firm to perform extensive research on these big deals. You want to know what the true drivers of big deal victory are. For example, one of my business service clients learned an unknown fact.  They were being dramatically underpriced by their competitors online.  The competitor stripped out the field selling expense and passed the savings along.  This competitor was driving prospects to an online shopping cart.  My client ran a series of tests to see if they could respond.  The results?  They increased win rates by 32%.  The same service being sold to the same customer against the same competition.  All they did was shift the channel they moved the service through.

 

Look-to-Book revealed to this CEO he did not need an expensive sales executive.  The head of sales could not “move the needle”.  The prospects wanted a lower price and were comfortable buying online. This gave the CEO confidence to let the head of sales move on.  The Look-to-Book ratio proved to the CEO he should bring in an ecommerce head of sales.

 

Action to Consider:

 

  1. Start measuring the right things.  Download the 5 metrics CEOs nominated this year.
  2. Deploy the Look-to-Book ratio.  Start by giving your win/loss provider new questions to ask.

 

Good luck.

 

ABOUT THE AUTHOR

Greg Alexander

Leads the firm's focus on the CEO’s role in accelerating revenue growth by getting the product team, the marketing department, and the sales organization into strategic alignment.
Learn more about Greg Alexander >

Greg is the host of The SBI Podcast, the most listened to sales and marketing podcast on the internet.

 

He is the host of SBI TV, a monthly television program broadcast on the internet featuring top B2B sales and marketing leader sharing their strategies to grow revenues.

 

Greg is the Editor-in-Chief of The SBI Magazine, the leading B2B publication focused on sales and marketing effectiveness.

 

He is the author of two critically acclaimed books Topgrading for Sales and Making the Number.

 

Greg has authored over 100 articles on SBI’s award winning blog, The SBI Blog.

 

He graduated from The University of Massachusetts Amherst with a BA in English and received his MBA from Georgia Tech.

 

Video:

 

Transforming the Sales Organization inside Fortune 500 Companies

Greg Alexander and John Gleason, Chief Sales Officer of Ryder, talk about the unique challenges of transforming a sales team inside of very large enterprises.

 

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Greg Alexander and Tony Capucille, Chief Sales Officer at Heartland Payment Systems, discuss the pros and cons of the 7 B2B sales organizational models.

 

Build a team of A Players Inside the Sales Organization

Greg Alexander and Todd Cione, Chief Revenue Officer at Rackspace, talk about hiring, onboarding, and developing exceptional sales talent.

 

Articles

 

Fill Every Role on Your Team with an A Player

In this article, Greg Alexander makes the case for applying the TopGrading methodology to the sales team, and outlines how to do so.

 

What CEOs Need to Know About Their Marketing Strategies

In this article, Greg Alexander and Rashid Skaf, CEO of AMX, discuss the role the CEO plays in crafting a company’s marketing strategy.

 

What CEOs are Looking for in a Sales Leader

In this article, Greg Alexander and George Norton, leader of Heidrick & Struggles Chief Sales Officer practice, discuss what CEOs need in the chief sales officer role.

Read full bio >