In every company you should be tracking the data that is generated during the course of business, and few data points are more important than your sales metrics. Sales metrics should be driving every decision you make regarding product development, services offered, and customer demographics. After all, how do you know what your clients want until you know who your clients are! And you should know exactly who your clients are and what they re most looking for.
Too often business try to fit clients into a product (and when I say product I mean a product, service, or offering), when you should be fitting your products to meet your client needs. There is very little long-term value in the assembly line mentality. No two iPhones have the same apps loaded on them and no two companies have the same needs for their business.
So, here are the top 5 sales metrics to track when you are looking to forecast sales and product offering:
- Leads - Believe it or not, next to accounting, one of the worst habits small businesses have is not tracking their leads and following up. This should be a no-brainer yet, everyday small businesses leave money on the table by not tracking their sales leads. There is absolutely no excuse for this! Get a simple CRM system or virtual office with a receptionist and keep track of all leads and what they are looking for. This way you can call them back and close the sale. 100% of leads that you don't follow-up on will not buy from you.
- Origination - We have all received the calls from a salesperson wanting you to place an ad in a local magazine or advertise on the Harris Teeter shopping carts. This may or may not be a good source for your dollars, but the truth is most businesses don't have a handle on how they are getting their clients! Knowing how a prospective customer found you is key to planning where and how to spend your money. We once advertised at a local movie theater in an effort to drum up business. When that didn't work, we tried to put flyers in peoples mailboxes. Neither of these worked for us. It was only after we dug into our client data did we get a grasp of how business was coming in. This makes it easy to plan out our time when working on marketing.
- Name and Phone Number - You read that correct, get your prospects’ information so that you can follow-up from a position of knowledge. Too many small businesses forward their phones to their cell phone. When someone calls and you are in the car, the client can tell you are distracted and you don't have their full attention. So, not getting their name and other details is providing terrible customer service. Invest in a very simple phone answering service that can handle your calls and customer service. Virtual offices provide this service as well as virtual assistants. This is a small investment that is worth it.
- Close Rate - How high is your close rate? A close rate is the number of closed sales vs. the number of inquires you have coming in. Anyone in sales will never bat 1,000 and most of us aren't even as high as Ty Cobb (lifetime batting average of .366). Knowing this percentage will help drive your product offerings in the future.
- Track the Losses - Knowing why you lose a sale is as imperative as knowing why you won a sale. Was it price, competition, offering, location, etc.? You should be tracking wins and losses in your CRM tool; if you don't have one get one today.
Once you start to gather this data, you will see an immediate improvement in your sales closing rate and your top-line revenue. The process of tracking sales is a maturing process every company must go through. I hate to see good businesses fail and I hate it even more when it is completely preventable.