When thinking of sales process management, it’s easy to focus on developing the process, monitoring its use, and revising it over time.
But, don’t forget measurement.
One of the benefits of a clearly defined sales process is that it provides you with a foundation for measuring results. In fact, we recommend using a sales process to measure success.
If each person on your team is following the process and all opportunities are appropriately categorized, you’ll be able to use your sales process to learn a lot about what’s happening with your sales team.
3 Key Measurements for Sales Process Management
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Opportunity Stage Length
One of the most valuable measurements for sales process management is the amount of time opportunities spend in your sales process.
Why is this important? Well, if you can develop realistic averages for each stage, you’ll significantly improve the accuracy of your forecasts. Accurate sales forecasts mean success and growth.
This can also help as you set targets for new hires. Even before your reps close deals, you can see if they’re moving opportunities through the pipeline at a reasonable speed. Then, you're able to make the informed decision to focus coaching on opportunities that are falling behind trends.
Forecasting is an essential component of sales process management. One important measurement for accurate forecasting is close rates by stage.
For example, if you know that, on average, 10% of your qualified prospects will eventually close, you can measure the potential value of your pipeline at the qualified stage.
Historical data will be needed to develop this measurement. But once you have it, you’ll gain a new level of insight into your sales process. If you have any historical data for key stages in the process, you may be able to measure close rates for those stages even before you start capturing new data.
Keep in mind that some stages, because of required paperwork or approvals, tend to have more historical data.
Pipeline Churn Rate
Pipeline churn rate is a valuable measure of how dynamic your pipeline is. Churn is simply how many prospects moved through each stage in any given time period.
If you are working opportunities more slowly than you are generating them, you will end up with a backlog in your pipeline. As a result, you may end up with stale opportunities. To avoid things going stale, have a plan for nurturing those opportunities on a timely basis.
On the other hand, if you are constantly running out of leads, you have a generation problem. If you can scale up prospecting, you can likely increase sales, as your team should have the capacity to work those opportunities.
Ideally, you’ll have a consistently churning pipeline without significant backlogs in any stage.
Sales Process Management Using Measurements
Using Measurements for Training
As you begin to track the data you’re getting from your sales process, identify areas for improvement. Maybe you are seeing a huge drop-off from qualified opportunities to quotes, or your final close rate on proposals isn’t high enough.
This can inform your sales training process, as you target training on skills needed for specific areas of the process. You can then evaluate the success of your training by measuring performance in those specific areas.
Using Measurements for Forecasting
As you track your sales process, your forecasting ability should improve over time. This data is invaluable to your delivery organization, giving them time to plan how to scale to meet demand.
Remember, that the key to any effective measurement is good data. If your team isn’t getting the right information into the system from the beginning, or if they are using subjective definitions of opportunity stages, it will be impossible to develop an accurate forecast.
You'll also want to keep in mind that managing a sales process doesn't end. Revisit your sales process at least once a year to make sure it's enabling optimal success. Use the results from your forecast to give insight into what needs to change and what should stay the same.
Remember, changes are not required and don't need to be astronomical. Incremental changes are just as important to keep your sales process fresh. This way, you're creating success on an ongoing basis.
What measurements do you use for sales process management?