B2B Sales Metrics That Can Save Your Bacon
Attention to the right B2B sales metrics can help sales managers shine a bright light on sales skills that need to be developed. With automated tools that track sales rep performance, sales managers can figure out what isn't working and fix problems before they turn into bad results.
Two Types of B2B Sales Metrics - Drivers and Ratios
When it comes to understanding sales performance, not all metrics are the same. In his recent blog post on managing business development reps (BDRs), Greg Keshian breaks down metrics into two categories: drivers and ratios. Drivers measure quantity, such as volume of calls, emails, connects, demos, opportunities and bookings. These are by far the most familiar metrics to sales managers. If the drivers are down, sales managers need to know.
But drivers alone are not enough for sales managers to really improve performance. Sales managers can always demand more and more calls or demos or opps, but more volume doesn't always produce good results. To generate good results on a consistent basis, sales reps must develop the necessary sales skills.
That's where ratios fit in. Ratios help sales managers expose weaknesses with the quality of sales performance. In short, ratios help sales managers understand why the numbers are down. If managers know where the problems are, then they can help reps improve. To figure this out, sales managers need to dig deeper and understand where there are problems with the quality of performance. Ratios reveal where important sales skills need to be developed.
Coaching B2B Sales Skills With Metrics
Sales skills can't always be measured in numbers. As a result, sales managers often don't know they have a problem until they miss the bookings target. Modern, data-driven sales managers need to be able to use metrics to find problems before they impact the sales results. Rekener works with a lot of sales leaders and we live for metrics, so I'll share some of Rekener's tips and tricks for measuring these five critical sales skills.
- Objection Handling
For context, we'll use a typical B2B sales process. In this scenario, sales reps (usually a combination of BDRs and Account Executives) are responsible for sourcing leads and turning them into deals via a series of stages that include doing demos, qualifying opportunities and closing deals.
Lots of sales teams will have targets for numbers of sourced leads or contacts. This is an example of a driver metric. But tools like LinkedIn and ZoomInfo make it easy to find lots of targets. The question is whether the sourced leads are good quality.
Sales managers should keep a close eye on ratios such as Demos per Sourced Lead. This metric tells a sales manager whether or not any of those sourced leads are moving to the next stage in the process. If the Demos per Sourced Lead number is low, then sales managers can spot check the leads to see if they are the right persona at the right kind of company. If not, then that's a good opportunity for coaching.
If you have an account-based approach, another good ratio is Contacts per Account. If you have more of a transactional business model with a lower average selling price, then the number of Contacts per Account should be low and they should be right in line with your target persona. If you have more of a high touch, enterprise model, then it makes sense to have a larger number of Contacts per Account because more people are likely to be involved with the customer's buying process. If Contacts per Account is out of whack with your business model, it's best to catch it early and get your sales rep on the right track.
If outbound calling is part of your sales process, you'll be tracking Calls as a driver metric. As a manager, you should have a target for Calls per Day that is based on your historical data and historical conversion ratios from Calls to Demos to Opportunities to Deals.
Managers appropriately focus a lot of attention to make sure that their reps are hitting the Calls target. They also need to look at ratio metrics that tell them if the Calls are working. The first ratio to look at is Calls per Demo. If the number is high relative to your historical averages and relative to other reps, then there is probably a problem.
Sales managers can break this down further to look at Connects (usually a Call with a certain duration, say 2 minutes), and then look at the ratios of Calls per Connect and Connects per Demo.
If Calls per Connect is high, there could be a problem with sourcing the right targets as described above. Or, if the sales rep is getting prospects on the phone but they are hanging up before the call is long enough to qualify as a Connect, then it can be a problem with the way the sales rep is communicating when she gets a prospect on the phone. There can be many causes, including bad tone, lack of rapport or poor listening.
If the Connect per Demo number is high, that means that sales reps are spending a lot of time on the phone with prospects but they aren't converting into demos. In this case, the cause can be a lack of product knowledge or poor objection handling (discussed below).
Sales managers who jump on these problem early can take action to get to the root of the problem and solve it. The sales manager should observe the rep on the sales floor, listen in on calls, or use a call analysis tool like Gong or Chorus to assess the problem. When the sales manager diagnoses the problem, then she can get to work on coaching.
3. Objection Handling
Objection handling is a critical sales skill at almost every stage of the sales process. Connects per Demo, Demos per Opp and Opps per Deal are all ratios that can shine a light on problems with objection handling.
As a starting point, sales managers need a good tool to generate these ratios and roll them up to the sales rep level. Managers also need to be able to compare reps based on these ratios. If all of the reps are struggling, then there may be a problem with the product that even the best sales reps can't overcome. However, when a sales manager sees these ratios on a rep by rep comparison, they can see who is doing well and who isn't.
For example, let's say that particular sales rep is hitting his demo numbers but is not able to generate enough opportunities. The sales manager who catches this early can start to pay attention to see if the rep is having trouble identifying the customer's real pain point, or demonstrating the product value or overcoming competitive objections.
The ability to qualify opportunities is a sales skill that can take years to develop. Many companies use a qualification framework like BANT, which qualifies prospects based on an assessment of budget, authority, need and timeline. Jacco Van der Kooij of Sales Hacker has written a good post on BANT for BDRs and AEs.
Even with a framework like BANT, qualification can be very subjective, and there can be a high degree of variability from rep to rep.
This is another case where ratios are extremely valuable. Good ratios are Opp per Deal and Close Rate. Both are good measures of how many opportunities are being opened relative to how many end up "closed won" or "closed lost".
The key for sales managers is to see these ratios for each rep, and then compare reps to one another and to the overall company averages. This way, sales managers can see aberrations and work to improve them. For example, if a sales rep has a high Opp per Deal number or low Close Rate, they may be overly optimistic when they are qualifying opportunities. On the flip side, sales reps who have low Opp per Deal numbers and high Close Rates may be missing out on deals.
All businesses need to close deals, and closing skills are critical sales skills. Bookings numbers and quota attainment are metrics on every sales manager's dashboard.
For sales managers who are looking to develop good closers, we recommend Sales Velocity as the metric to use. We call Sales Velocity a super metric because it is a ratio of multiple different metrics. To calculate sales velocity, the numerator is the product of Opportunities created in a period, multiplied by your Average Selling Price (ASP) and Close Rate. The denominator is the Sales Cycle.
Sales managers should compare Sales Velocity for each rep relative to other sales reps and relative to the company average. This reveals the sales reps who have bad Sales Velocity numbers, even if they are hitting their bookings targets.
For example, a sales rep may be doing a good job of generating opps and closing deals with a good ASP, but their Sales Velocity numbers could be bad because their sales cycle is long. This helps a sales manager zero in on process management, and coach the rep on how to take control of the process, identify all the parties that are part of the buying decision and get through legal and security reviews.
Getting the Right Tools for B2B Sales Metrics
In order to track and understand ratios, sales managers need tools that help them understand the relationships between different metrics. For example, Calls per Demo, Demos per Opportunity and Close Rate are all simple ratios that depend on multiple metrics. The starting point for reports is the CRM, but it gets complicated quickly when it comes to ratios and cross-object reporting. Ratios, especially more complex ones like Lifetime Value and Sales Velocity, are more difficult to analyze with CRM reports because they require math using numbers from different objects in the database.
To overcome these challenges, sales managers usually rely on business analysts with spreadsheets or business intelligence tools. But spreadsheets take time to create and are troublesome to maintain and share. BI tools have more functionality but they require large teams of business analysts to do the necessary analysis and generate teams. The cost in time and money is too high for all but the largest businesses.
Rekener created Sales Rep Scorecards in order to automate the metrics, reports and analysis that sales managers need at their finger tips. The Sales Rep Scorecard application puts the power of data directly into the hands of the sales manager. No massive spreadsheets to maintain and no SQL.
If you’re looking for a platform to help automate your sales metrics and put all the key drivers and ratios at your fingertips, come check out what your data looks like inside Rekener!
- Request a demo of Rekener's Sales Rep Scorecards application.
- Start a free trial by connecting your Salesforce or HubSpot CRM account.
- What is a Sales Rep Scorecard? Find out here
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Alex is CEO and Founder of Rekener. Previously, he served as President and COO at ZeroTurnaround and as President of the Delta Division of BBN Technologies. At ZeroTurnaround, he grew high velocity inside sales by 6x in 3 years. At BBN, Alex co-founded RAMP and AVOKE, both recurring SaaS businesses based on BBN's world class speech recognition and natural language processing tech. Alex started his entrepreneurial career as founder and COO of NBX Corporation, which led the transformation of business telephone systems to Voice over IP. Alex’s companies have generated $500M in liquidity events and more than $1B in sales.
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