If you already have a sales process defined in your company, that is, you know when a customer goes from being a potential customer to a closed customer and your sales team is trained to execute key actions to take leads from one stage to another, it is time to measure whether this process is really being effective.
In this article we will talk about what it means for your sales process to be effective, as well as how to measure it properly and what you can do to keep it improving.
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Let's start with what sales effectiveness means, it usually refers to how well an organization's salespeople manage to convert prospects and take them through the entire sales funnel. This can be evaluated with several metrics such as conversion rate, close rate, and achievement of quota.
Now, how can we measure that sales effectiveness? There are three key points that can help you determine if the sales process is working or not:
1. Stages of the lifecycle
Before getting into conversion rates, it's important to understand what the process a contact goes through to end up converting, and the lifecycle stages will help you organize the contacts you have in the sales process stages.
You must understand what makes a contact a potential customer or what makes it an opportunity, this will depend on the way your organization acquires customers, but correctly defining this will make the follow-up and guidance that is give the prospect throughout the funnel is adequate.
2. Opportunity conversion rate
This rate shows what percentage of your potential customers are converting, however, the result obtained depends on the answer given to the following questions:
- Is your marketing team bringing in enough leads to your sales team?
- Is following up on your salespeople with potential customers effective?
If that conversion percentage is high, it means that if enough potential customers are being attracted to reach the quota and that the follow-up of those potential customers is good, however, on the contrary that conversion percentage is low, it means that there is points to reinforce within your sales process, for example, using multiple channels to communicate (email, calls, social networks, etc.), getting close enough to potential customers before giving up and knocking on as many doors as possible, in order to reach the quota.
3. Closing opportunity rate
This rate indicates which legitimate sales opportunities end up closing, depending on the percentage that results, that will mean whether the process is being effective, since if everything we explained above is well defined and the results are positive, but the rate closing is not good, in the end the entire sales process defined is not giving the expected results.
To improve the closing rate you can make adjustments such as not being too selective, if your salespeople are too selective with the potential clients they work with, they are leaving many sales opportunities on the table that can mean more sales closings, It may also be that the number of potential customers is high and they cannot be served effectively by your representatives, which would mean that you need to increase the size of your team, in addition it is likely that you will need to reinforce the training of your sales team.
It is important that your sales process is effective, because it is the one that ends up generating conversions, here are three tips to follow to improve it:
- Invest in training your sales team so that they are well prepared to deal with potential customers.
- Redefine your opportunity management infrastructure, to reach you and give the optimal follow-up to each of your potential clients.
- Have a solid sales process, give your salespeople a clear framework to operate and the results will be better.
I hope this information has been of value to you and you have learned how to measure if your sales process is effective and if it is not, how you can improve it.