For those who have invested staff time, 3rd party consulting, and CRM automation in an effort to improve their sales process, the suffering can be severe when the results do not show up in the numbers.
Many sales process improvement efforts run aground when anxious sponsors wait for the revenue impact almost immediately after implementation. They want to see improved deal close rates and reduced sales cycle lengths, and a higher transaction size. Most importaly, they expect revenue increases to materialize, even as reps and managers are initially struggling to understand and adopt the new process.
When these improvements are not born out in the numbers, sales executives cry foul, saying “where’s the beef?”
With a major organizational change project such as sales process improvement, businesses need to know “how it’s going” well before the final results (such as revenue increases) are finally recorded. The way to do that is to define and start measuring Leading Indicators. For a sales process improvement project, the key leading indicators to monitor are:
- Pipeline to Quota Ratio
- Average number of Days in Stage for an Opportunity (for each stage or phase in the process)
- Number of Opportunities returned to nurture
- Frequency of use of Tools/Aids related to the sales process
- Dollar size of early stage forecast
- Stage Progression Rate (% of Opportunities that make it to the next stage divided by total Opportunities in stage)
- Stage Regression Rate (% of Opportunities that ‘go back” to the previous stage divided by total Opportunities in stage
When organizations monitor these metrics from the first day the new sales process is introduced to the sales force, they are well informed about the future impact that the improvement will have.
The most important metrics for a sales process improvement effort, and the ones that determine success or failure are called Lagging Indicators. Here is a white Paper that describes the difference between leading and lagging indicators.
Below is a list of some of the most compelling and relevant lagging indicators to track that capture specifically the impact of an improved sales process.
I welcome any comments on the challenge of measure interim and final state progress of a sales process improvement effort.