Boost Your Sales Performance with Data-Driven Insights
While tracking metrics is crucial for all sales teams, B2B sales present unique challenges. B2B selling is a different ball game compared to direct-to-consumer sales. The stakes are often higher, and closing deals can be a more complex process.
That’s why identifying and monitoring relevant KPIs(key performance indicators) for your B2B sales organisation is essential for achieving success. Focus on the metrics that matter!
High-Performing B2B Sales Teams: Measurement Makes the Difference
Top-performing B2B sales teams consistently assess the health of their business. By diligently tracking and taking action to improve essential metrics, you can empower your sales team to perform better and be more productive.
Let’s delve into the sales metrics your B2B organisation should be monitoring closely!
1. Understanding the Impact: Sales KPIs
It’s vital to understand how your sales team’s efforts directly contribute to your company’s overall performance, health, and growth potential. Here are a few key performance indicators (KPIs) to track every month:
-
- Total Sales: This represents the total amount of revenue generated from sales for a specific period, often totalled monthly.
-
- Sales by Product or Product Type: Break down how much revenue each product or product type generates from your total sales figure.
-
- Sales from New Business: Track how much revenue comes from first-time customers to understand their contribution to your total sales.
-
- Net Profit Margin: This metric determines how much profit your company makes during a specific period.
-
- Net Promoter Score (NPS): This score helps quantify customer reviews. Ask customers how likely they are to recommend your company (on a scale of 0-10). Categorise their responses as promoters (9-10), passives (7-8), and detractors (0-6). Calculate your NPS using the following formula: NPS = (% Promoters) – (% Detractors).
Streamline Your Tracking: Free Resources to Get You Started
If you’re not currently using a CRM or new to tracking KPIs, this template can help you get started by centralising your performance indicator tracking.
2. Sales Productivity Metrics: Time is Money
The more time your sales reps have, the more outreach they can conduct. Measuring their productivity helps you understand how long it takes them to reach sales targets. Essentially, the faster they close deals, the higher your company’s sales productivity.
Analysing this data helps your team pinpoint inefficiencies in your sales processes and identify areas for improvement. Here are some productivity metrics to consider:
-
- Percentage of Time Spent Demoing
-
- Percentage of Time Spent on Data Entry
-
- Percentage of Time Spent on the Phone
-
- Number of Sales Tools Used and Average Time Spent Using Each Tool
-
- Percentage of Closed-Won Deals
3. Unveiling Lead Sources: Where Do Your Leads Come From?
How much do you know about your new leads? Understanding where they originate from allows you to better target future offers to reliable sources. By tracking the volume of leads coming through your sales pipeline and their source, you can optimise your strategy.
For example, if you discover that more leads come in through your website’s contact form than phone calls, you can shift your sales reps’ focus to responding to contact form inquiries rather than spending excess time on the phone.
4. Estimating Revenue by Lead Source: Where’s the Money Coming From?
Once you start tracking where your leads originate, you can measure how much revenue each major source generates. This will help you understand the profitability of each lead source and equip your sales reps with data to target the most profitable sources for new leads.
5. Average Lead Response Time: Be Quick on the Draw
Once a lead reaches out, how long does it take for your sales rep to respond? Ideally, you want them to follow up quickly – within minutes, if possible. According to a well-regarded Harvard Business Review study, companies respond to leads within 42 hours on average, if they respond at all.
In sales, every minute counts. The shorter the response time, the higher the chance of a lead remaining high-quality. By tracking the average lead response time, you can identify areas for improvement.
Here are a few strategies to decrease your average lead response time:
-
- Social Listening: Stay on top of inquiries on social media and respond promptly to engage interested leads.
-
- Live Chat: Offer live chat functionality on your website to allow real-time interaction with leads who fill out contact forms.
-
- Email Workflows: Implement email automation to ensure lead inquiries are routed to the right person and addressed quickly.
6. Pipeline Creation by Month: Building a Robust Sales Pipeline
The greater visibility you have into your sales pipeline, the more revenue potential you have for your business. Your sales pipeline should encompass every opportunity your sales reps are handling at any stage of the sales process.
Track whether your opportunity pipeline is growing, shrinking, or if the number of qualified prospects is fluctuating. If your pipeline is shrinking, it’s crucial to identify where prospects are dropping off and focus on improvement in those areas. If it’s full of low-quality leads, investigate where these leads are originating from and how they are being engaged with.
For example, after tracking your sales pipeline for three months, you discover that 25% of outbound leads become qualified prospects, and you need 50 new leads to maintain pipeline growth. This tells you that you need to contact 200 outbound leads to maintain that growth. If you’re new to pipeline creation, this free sales pipeline template can help you map out your own.
7. Marketing Qualified Leads (MQLs) to Sales Qualified Leads (SQLs): Conversion Rate
This metric hinges on collaboration between your marketing and sales teams. In the marketing qualified lead (MQL) stage, leads have expressed interest in your product or service by downloading content, signing up for an email list, or redeeming an offer.
A sales qualified lead (SQL) is a lead that the sales team has determined is ready to speak with a salesperson. Once a salesperson makes contact and confirms a lead’s motivation to learn more, they become a prospect.
The MQL to SQL conversion rate indicates how many marketing qualified leads are converted into sales qualified leads. This metric helps you assess the quality of leads generated by your marketing efforts. Tracking it can also reveal whether your marketing activities are contributing to building a high-quality pipeline.
For instance, if 100 people download a free offer from your website and 20 of them convert into sales qualified leads, then your MQL to SQL conversion rate is 20%. While your marketing team likely tracks this metric, as a sales leader, you should also be aware of it to identify any gaps in pipeline population.
Want to find out more about lead qualification? Check out our previous article here.
8. Opportunities by Lead Source: Understanding What Works
A sales opportunity is a highly qualified prospect that has progressed beyond the lead stage and has a pain point your product or service can address. In B2B sales, typically only 10 to 15% of opportunities convert into sales. Understanding and nurturing your company’s opportunities is critical due to such a low average conversion rate.
For example, if you find that email is consistently the strongest source of your B2B sales opportunities month-over-month, that indicates a valuable opportunity source.
Tracking the common sources of your B2B sales opportunities equips your sales reps with valuable data. This data reveals which sources are more likely to generate sales opportunities.
9. Closed-Won Opportunities by Month: Tracking Success
A closed-won opportunity signifies the point in the sales process where a prospect agrees to a contract or makes a purchase, becoming a customer. This represents a successful conclusion to the sales process.
In addition to tracking the number of closed-won opportunities each month, it’s also beneficial to track them against the total number of opportunities to determine your overall win rate. You can calculate this using the following formula: Closed Won Opportunities / Total Opportunities (Closed Won + Closed Lost).
10. Pipeline Velocity: Streamlining Your Sales Cycle
Sales pipeline velocity measures how long prospects and opportunities take to move through the entire sales process, from initial contact to closed deal. The longer it takes to move prospects through the sales process, the greater the likelihood of losing them along the way. Regularly assessing and making improvements based on the data provided by this metric can help your team optimise the sales process and retain more prospects.
To calculate your organisation’s sales pipeline velocity, segment your sales pipelines by market size (small, mid-market, and enterprise are common categories) and calculate the sales velocity for each segment. You can use this formula to find sales pipeline velocity: Sales Velocity = (Number of Opportunities x Deal Value x Win Rate) / Length of Sales Cycle.
Here’s an example of sales velocity in action: This month, a B2B software company’s sales rep has 20 sales opportunities in the pipeline. Their deal value is $15,000 and their win rate is 25%. They are currently working on a 45-day sales cycle. In this scenario, the sales velocity would be $2,000/rep/month
11. Customer Acquisition Cost (CAC): Measuring Return on Investment (ROI)
While it’s true that it takes money to make money, you want to ensure your sales team is bringing in more revenue than what’s going out. Customer acquisition cost (CAC) measures the average cost spent on converting a prospect into a customer. Understanding CAC is vital for keeping track of the return on investment (ROI) for your sales team’s efforts.
Here’s the formula to calculate CAC: Customer Acquisition Cost = Dollars Spent Acquiring More Customers Over a Period of Time / Total Number of Customers Acquired During the Same Period of Time.
For example, if a company spends $12,000 acquiring new customers and acquires 30 new customers during that time, their customer acquisition cost is $400 per customer.
Go forth and conquer!
By consistently tracking the right metrics for your B2B business and implementing changes based on the data you glean, you can significantly improve your sales efficiency and drive sales growth.
Oh! And be sure to check out Hubspot’s Ultimate Guide to Sales Metrics!
