The Ultimate Guide to Sales Metrics: What to Track, How to Track It, & Why

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You can’t manage what you don’t measure.

While metrics are important in every aspect of business, they’re especially critical in sales. Sales leaders can’t use their intuition to guide their decisions — not only are they dealing with a huge amount of information, the risk of failure is too high.

That’s why successful companies obsessively measure everything about their go-to-market model, sales strategy, and salespeople.

To help you find the numbers you need to be paying attention to, we’ve compiled the ultimate guide to sales metrics.

Common Questions About Sales Metrics

What’s a sales metric?

A sales metric represents individual, team, or company-wide performance. Sales leaders use sales metrics to track progress toward goals, prepare for the future, adjust sales compensation, award incentives and bonuses, spot problems before they get out of hand, and more.

What is a key performance indicator?

Sales metric and key performance indicator (KPI) are often used interchangeably — but not every sales metric is a KPI. To qualify as a KPI, a sales metric must reflect a major business priority or objective.

For example, a company trying to drive sales for a specific product might monitor that solution’s percentage of total sales. Meanwhile, a company aiming to get users more efficiently would monitor cost of acquisition (CAC).

What is a KPI used for?

Like any metric, leaders and managers use KPIs to evaluate performance. Unlike most metrics, a KPI is tied to the company’s core strategy.

What is a KPI in sales?

Not only do KPIs differ from company to company, they also differ from department to department. There isn’t a single set of sales metrics or KPIs each sales leader must monitor — targets, roadblocks, products, structure, and so on vary so dramatically across sales teams.

When deciding whether to track and focus on a metric, ask yourself, “Does this sales metric give me useful information about our sales process and results? Does it tie back to our goals? Will it help me identify areas for improvement?”

What is the difference between KRA and KPI?

Key result areas (KRAs) are objectives an individual, team, department, or business unit must meet for the company to hit its objectives.

For example, your sales team needs to penetrate 10% of the market in a particular region to unseat the incumbent.

You’ll have multiple KPIs for this target, such as:

  • Number of customers switching from your competitor
  • Total number of new customers in that region
  • Percentage of the total market using your solution

The sales metrics corresponding to these KPIs will be even more numerous:

  • Percentage of competitor’s customers returning your sales team’s calls
  • Percentage of new customers returning your sales team’s calls
  • Percentage of competitor’s customers scheduling meetings
  • Percentage of new customers scheduling meetings
  • Number of meetings completed with competitor’s customers
  • Number of meetings completed with new customers

… and so on.

What is the meaning of sales target?

A sales target, also known as a quota, is the amount of sales that a salesperson, sales manager, or sales leader commits to making in a set period of time. It can be measured by revenue (dollar value) or volume (units).

Sales KPIs

These sales metrics are important for measuring company-wide performance:

  • Total revenue
  • Revenue by product or product line
  • Market penetration
  • Percentage of revenue from new business
  • Percentage of revenue from existing customers (cross-selling, upselling, repeat orders, expanded contracts, etc.)
  • Year-over-year growth
  • Average lifetime value (LTV) of user or customer
  • Net Promoter Score (NPS)
  • Number of deals lost to competition
  • Percentage of sales reps attaining 100% quota
  • Revenue by territory
  • Revenue by market
  • Cost of selling as percentage of revenue generated

Activity Sales Metrics

These sales metrics show what salespeople are doing on a daily basis. Activity metrics are “manageable,” meaning sales managers can directly influence them.

Imagine one of your reps isn’t hitting her quota. Digging into her activity metrics, you discover she isn’t sending enough emails to generate the number of calls she needs. You can’t control how much this salesperson sells — but you can tell her to increase her daily email output.

Activity metrics include:

  • Number of calls made
  • Number of emails sent
  • Number of conversations
  • Number of social media interactions
  • Number of meetings scheduled
  • Number of demos or sales presentations
  • Number of referral requests
  • Number of proposals sent

Activity sales metrics are leading indicators. In other words, they predict your ultimate results.

Pipeline Sales Metrics

Gauge the health of your sales pipeline with these metrics. They help you understand what’s working and what’s not regarding your holistic sales process.

  • Average length of sales cycle
  • Total open opportunities by month/quarter (by team and by individual)
  • Total closed opportunities by month/quarter (by team and by individual)
  • Weighted value of pipeline by month/quarter (by team and by individual)
  • Total value of sales by month/quarter (by team and by individual)
  • Average contract value (ACV)
  • Win rate (by team and by individual)
  • Conversion rate by sales funnel stage (by team and by individual)

Lead Generation Sales Metrics

How well are your salespeople prospecting? Use these metrics to find out.

  • Frequency/volume of new opportunities added to pipeline
  • Average lead response time
  • Percentage of leads followed up with
  • Percentage of leads followed up with in target time range (for example, 8 hours)
  • Percentage of leads dropped
  • Percentage of qualified leads
  • Customer acquisition cost (CAC)

Outreach Sales Metrics

Some metrics in this category probably won’t be important to your company. It comes back to your individual sales process, methodology, and strategy: If your reps exclusively target prospects they’ve met at trade shows, average initial-contact-to-meeting rate would be a better reflection of their performance than average email open rate.

Email Sales Metrics

  • Open rate
  • Response rate
  • Engagement rate (link clicks, webinar attendance, video plays, etc.)
  • Percentage of recipients who move to the next step

Phone Sales Metrics

  • Call-backs
  • Percentage of prospects who agree to a conversation
  • Percentage of prospects who move to the next step

Social Media Social Metrics

  • Percentage of LinkedIn connection requests accepted
  • InMail response rate
  • Percentage of prospects engaged with on social media who move to next step
  • Conferences, trade shows, events
  • Number of meetings set
  • Number of qualified opportunities generated

Primary Conversion Metrics

  • Percentage opportunities closed/won
  • Percentage opportunities lost (no decision)
  • Percentage opportunities lost to competitor
  • Percentage opportunities won by lead source
  • Average number of conversations for won opportunities
  • Average number of conversations for lost opportunities

Channel Sales Metrics

These metrics will help you optimize your channel sales strategy.

  • Total revenue from partner deals
  • Revenue by partner
  • Margin by partner
  • Average deal size by partner
  • Number of partners achieving revenue targets
  • Number of new opportunities added by partners
  • Number of qualified opportunities added by partners
  • Number of opportunities in partner pipeline
  • Average deal velocity (number of days, weeks, or months until deal is marked closed/won or closed/lost)
  • Retention rate of partner customers
  • Average cross-sell and upsell rate of partner customers
  • Average customer satisfaction score of partner customers
  • Total number of partners
  • Number of new partners added in past month/quarter/year
  • Number of partners lost in past month/quarter/year
  • Average time to find, onboard, and train new partners

Sales Productivity Metrics

Sales productivity is defined at the rate at which your salespeople hit their revenue targets. The less time it takes a salesperson to meet her quota, the higher her sales productivity.

To see how productive your reps are, use these metrics:

  • Percentage of time spent on selling activities
  • Percentage of time spent on manual data entry
  • Percentage of time spent creating content
  • Percentage of marketing collateral used by salespeople
  • Average number of sales tools used daily
  • Percentage of high-quality leads followed up with

Rep Hiring and Onboarding Metrics

Without a solid talent management strategy, hitting your targets becomes far harder. Nothing makes team quota slip further out of reach than unexpectedly losing a high (or even average) performer. Sales managers feel pressured to fill the role as quickly as possible, which often leads them to settle for a mediocre candidate.

By relying on data to tell you when and how to recruit, you can avoid this issue.

Sales Hiring Metrics

  • Percentage of sales management time spent recruiting
  • Average time-to-hire
  • Percentage of hires from various sources
  • Percentage of offers accepted
  • Average tenure with your company
  • Average turnover rate
  • Average cost to replace a salesperson by role

Sales Ramp

Sales ramp-up time represents the average amount of time it takes a new salesperson to become fully productive. Use it to make hiring and firing decisions, set expectations with new reps, and develop more accurate sales forecasts.

There are multiple ways to calculate it. CRMs often automatically calculate the mean time to 100% quota attainment, which you can use to set ramp. For instance, if it typically takes a salesperson four months to hit 100% quota, your ramp-up time would be four months.

Although this method is fairly simple, it ignores the fact new sales reps often take over existing accounts or prospects — which gives them a head start. In addition, a salesperson who hits 98% of their quota is likely fully ramped, but this formula wouldn’t count them as such until they hit 100%.

Alternatively, Ideal CEO Somen Mondal has developed a formula that factors in training, the length of your sales cycle, and prior experience.

Ramp-up = amount of time spent in training + average sales cycle length + X

X is based on the salesperson’s experience: The more they have, the smaller this number is. Here’s an example for a well-seasoned rep, assuming training lasts 20 days and your average sales cycle is six weeks.

Ramp = 20 days + 42 days + 16 days

This salesperson would receive 78 days to reach full productivity.

Sales Process, Tool, and Training Adoption Metrics

Most companies invest heavily in sales enablement and training. To ensure your money is being spent wisely, track the following metrics.

  • Percentage of reps following the sales process
  • Percentage of reps using sales and marketing collateral
  • Percentage of reps using designated scripts, messaging, and/or email templates
  • Average cost of training by salesperson
  • Average time spent in training every month, quarter, and/or year by salesperson
  • Percentage of reps applying sales training six months out
  • Average level of satisfaction with sales training
  • Percentage of reps using the CRM
  • Percentage of reps using a specific tool, such as LinkedIn Navigator, Datanyze, or HubSpot Sales

It’s relatively simple to gauge CRM and technology adoption: Simply look at your usage data. However, knowing how many reps are following your sales process is more challenging. Consider holding an anonymous survey with questions like, “Do you follow the outlined sales process with the majority of your prospects?”, “Do you use the prescribed needs assessment framework?”, and so on.

You should also use blind surveys to learn how satisfied reps are with the quality, frequency, delivery method, and focus of your sales training program.

Leading Indicators

A leading indicator predicts your results. In other words, it tells you which direction you’re trending while there’s still time to change the final outcome. While leading indicators can be more difficult to measure than lagging indicators, they’re also far more easy to influence.

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Lagging Indicators

A lagging indicator reflects your ultimate results. They’re reactive, not proactive. For instance, a lagging indicator might be your team’s quota attainment at the end of the month.

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SaaS Metrics

SaaS and subscription businesses require different metrics. As David Skok, general partner at Matrix Partners, explains:

SaaS and other recurring revenue businesses are different because the revenue for the service comes over an extended period of time (the customer lifetime). If a customer is happy with the service, they will stick around for a long time, and the profit that can be made from that customer will increase considerably. On the other hand if a customer is unhappy, they will churn quickly, and the business will likely lose money on the investment that they made to acquire that customer.”

Rather than solely focusing on acquiring the customer (the “first sale”), Skok explains you must also focus on keeping them (the “second sale”). 

Check out the sales KPIs you should track at each stage of your startup’s growth.

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Customer Acquisition Cost

Cost of customer acquisition (CAC) is the average amount of sales and marketing expenses required to acquire one new customer.

Here are some potential components of your CAC:

  • Inbound marketing (blogging, SEO, social media)
  • Sales and business development
  • Paid advertising
  • Events and trade shows

How to Calculate CAC

To calculate CAC, divide the total amount you spent on sales and marketing in a given time period by the number of customers you acquired in the same time period.

For example, if you spent $1,000 in one month and acquired 50 customers, your CAC would be 20.

This formula is easy to follow. But as HubSpot’s former VP of Growth Brian Balfour explains, it can be inaccurate unless your prospects become customers extremely quickly or your marketing and sales expenses are static (which is unlikely). If you measure CAC by month, but it takes your typical prospect two months to buy after the first marketing touchpoint, your results will be misleading. Perhaps you start a new marketing campaign in January — its impact on CAC won’t be visible until February.

To correct for these mistakes, Balfour recommends using the following formula:

IMAGE-10-CAC-Equation-2-768x576-300x225.jpegSource: Reforge

Here’s the same formula written out: 

CAC = (Marketing Expenses (n-60) + 1/2 Sales (n-30) + ½ Sales (n)) / New Customers (n), where n= Current Month

Cost Per Acquisition

Balfour also points out people commonly conflate “CAC” with “CPA” — but the two are different, and this mistake can be expensive. 

CPA stands for Cost Per Acquisition. It represents how much money you need to spend to acquire a non-customer, like a lead, a free trial, a registration, or a user. 

This means CPA and CAC are related: Your CPA is a leading indicator of your CAC.

For example, if you offer a freemium version of your software product, your CPA would measure the cost of acquiring a free user. Your CAC would measure the cost of acquiring a paid user.

Months to Recover CAC

Startups must know how many months it takes to recover CAC, (the amount they invested in getting a new customer).

Not only does this metric help you manage cash flow, it also tells you how long you need to retain a customer to break even.

Let’s say your CAC is $200, and your average revenue per account (ARPA) is $400. Your gross margin is 95%. 

Months to recover CAC = CAC divided by (ARPA x GM).

In this example, you’d break even in approximately two weeks. 

Lifetime Value (LTV)

Customer lifetime value (LTV) is the average amount of money your company makes from a buyer for however long they stay a customer (i.e., X months or years).

LTV tells you whether you’re spending too much or too little on acquiring customers. The optimal LTV:CAC ratio is 3:1. In other words, if it takes a dollar to get a prospect to buy your product, they’ll spend $3 over their time as a customer.

Segment your customers, then look at average LTV. The findings will tell you where to focus your energy and/or change your strategy. For example, if Tier X of accounts has a 1.5:1 LTV:CAC ratio, while Tier Y has a 4:1 ratio, you’d probably want to:

  • Decrease your marketing and sales expenses for Tier X and increase them for Tier Y
  • Figure out why Tier X customers are less profitable — are they churning earlier, buying less, and/or purchasing fewer add-ons?

Average Revenue Per Account

Average Revenue Per Account (ARPA) is the mean amount of revenue from a single user or customer. Companies typically calculate it per month or year, depending on their business model. If you offer monthly contracts, calculate it on a per-month basis; if the majority of your contracts are annual, calculate it per year.

Annual Revenue Per Account = total revenue generated from all customers/paying users divided by total number of customers

Monthly Recurring Revenue (MRR)

Monthly Recurring Revenue (MRR) tracks the total predictable revenue your company expects to make each month. It’s one of the most important sales metrics for SaaS businesses, since it reflects growth and helps you forecast future revenue. 

How to Calculate MRR

There are two ways to calculate MRR. 

  1. Add up the monthly revenue you’re bringing in from each customer for total MRR. 
  2. Multiply ARPA by your number of paying customers.

The first method takes longer but is also more accurate. If Customer X is paying $200 per month, and Customer Y is paying $400 per month, your MRR would be $600.

The second method is easier. If you have four customers, and ARPA is $150, your MRR would be $600.

Make sure you’re not including one-time payments in your MRR, like implementation and/or limited support fees.

Be careful about quarterly, semi-annual, and annual plans as well. Let’s say a new customer signs a $1,200 year-long contract in December. If you tally up your MRR on a customer-by-customer basis that month, you might incorrectly add $1,200. But you’re not generating $1,200 from this account each month — you’re generating $100. 

To include these subscription values in your MRR, simply divide them by four, six, or 12 if they’re quarterly, semi-annual, or yearly, respectively.

New MRR

New MRR refers to revenue from new customers. Suppose you acquired one customer paying $50 per month and a second customer paying $45 per month. Your new MRR would equal $95 per month.

Expansion MRR

Expansion MRR is revenue generated from existing customers, including cross-sells (buying complementary products or services), upgrades/upsells (a more expensive plan), and greater volume (buying more seats, usage data, transactions, etc.)

Expansion MRR is considered the “holy grail” of MRR. Why? It’s five to 25 times less expensive to retain an existing customer than acquire a new one; plus, customers are far less likely to churn when they’ve invested more into your suite over time.

Churn MRR

Churn MRR is the revenue you’ve lost from customers who have downgraded their plans or canceled altogther. It’s a leading indicator of next month’s MRR. For example, if two customers each paying $400 canceled in June, your MRR would be $800 lower in July.

Annual Reccuring Revenue 

Annual recurring revenue is your MRR multiplied by 12, or the amount of recurring revenue you’ll generate in a calendar year.

It has a big advantage over MRR. Because salespeople typically sell more during longer months (like March, August, and December), and sell less during shorter months (like February, June, and April), your predicted MRR might be off from month to month.

Since ARR applies to the entire year, monthly variance has no impact.

Should You Focus on MRR or ARR?

The short answer is, you should focus on both. While MRR tells you how your business is doing on a monthly basis, ARR gives you a yearly picture.

Your priority should depend on your company’s maturity and business model. If you’re generating more than $10 million every year, think in terms of ARR. If you’re generating less than that, a shorter-term lens is more helpful. 

Churn Rate in SaaS

Your churn rate is the percentage of customers who cancel their recurring subscriptions. You can calculate per month, quarter, or year, depending on the most common type of contract you use. 

Churn rate = the number of customers at beginning of time period minus the number of customers at the end of time period divided by number of customers at beginning of time period

Or put another way, the formula for churn rate is:

(# of customers lost in given time period) / # total customers at beginning of given time period

Imagine the majority of your customers are on semi-annual plans. In January, you have 400 customers. In June, you have 500 customers. 

Your churn rate equals: -100 / 500, or -20%. You’re gaining more customers than you’re losing.

Revenue Churn

No matter what, churn is bad. However, revenue churn is different from customer churn. Revenue churn is the amount of revenue you’ve lost (a.k.a. churn MRR), while customer churn is the amount of customers you’ve lost.

From a business standpoint, it’s probably preferable to lose three customers each paying $40 per month than one customer paying $300 per month. 

Negative Churn

Negative Churn is a term popularized by Skok that means your expansion MRR exceeds your churn MRR. If you can achieve negative growth, your business will grow exponentially.

Sales KPIs by Team Type

Inside Sales KPIs

According to LevelEleven, inside sales teams rely on these KPIs (from most frequently used to least):

  • Number of deals closed
  • Opportunities by stage
  • Calls
  • Meetings
  • Significant interactions or events (for example, ROI meetings or conversations lasting four-plus minutes)
  • Opportunities created
  • Demos
  • Quotes/proposals
  • Emails
  • Meetings scheduled

Field Sales KPIs

Outside sales teams use many of the same metrics as inside sales teams but prioritize meetings more heavily.

  • Meetings
  • Number of deals closed
  • Opportunities created
  • Opportunities by stage
  • Quotes/proposals
  • Significant interactions or events
  • Calls
  • Demos
  • Emails

Sales Development Metrics

Company use these sales development metrics to benchmark their SDR team’s efficiency and ability to grow pipeline.

  • Meetings
  • Calls
  • Opportunities created
  • Significant interactions or events
  • Opportunities by stage
  • Number of deals closed (by their partner Account Executive)
  • Demos
  • Emails
  • Meetings scheduled

Sales Metrics Dashboard

It’s much easier to understand your data and the significance of various metrics in visual form.

Every CRM comes with the ability to create dashboards. Some let you choose from pre-set dashboards, while others (like the HubSpot CRM used with the Reporting Add-On) let you build your own to track your most important sales metrics.

Here are few potential dashboards:

1) Sales performance by rep

Create friendly competition by publicly tracking how each salesperson is performing. Pick your sales metrics based on the behavior you want to promote; for example, if you’re trying to increase your team’s prospecting efforts, you might display the number of total opportunities created in the last month. To ensure your reps didn’t chase unqualified leads simply to fill their pipelines, you might also display total sales by rep.

2) Sales activities

Keep your reps focused on the right tasks with an activities dashboard. Visualize how many days in a row they’ve logged into the CRM, how many calls they’ve made in the past week, how many presentations they’ve given, how many emails they’ve sent, and so on.

3) Sales management

It’s critical for sales managers to know how the team is trending. Track the value of new opportunities compared to the previous month or quarter, the weighted value of your pipeline, total sales versus your target, and/or close rate by salesperson.

Sales KPI Template

If you don’t have a CRM, a KPI template gives you an easy way to track your sales metrics in a single place.

This KPI tracking spreadsheet is customizable to your business goals. It includes a step-by-step guide to choosing company-wide KPIs and tabs for selecting KPIs by employee, function, and department, respectively. In addition, the spreadsheet has pre-built formulas to help you tie your KPIs to KRAs.

Some teams never track sales metrics at all. Carefully picking which ones to prioritize and then course-correcting (or even completely pivoting) as needed will put you ahead of the game.

HubSpot CRM


Source: blog.hubspot.com/sales

Sales Pipelines: A Comprehensive Guide for Sales Leaders and Reps

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The more control and visibility you have into your sales pipeline, the more revenue you’ll bring in.

But what is a sales pipeline — and why is it so instrumental to selling success? In this guide, you’ll learn everything you need about sales pipeline management, including:

The Definition of a Sales Pipeline

A sales pipeline encompasses every stage of your sales process. An opportunity moves from stage to stage of your pipeline based on concrete actions, which is usually represented visually in your CRM. Because sales processes differ from company to company (and even product to product), your sales pipeline should be unique and reflect the typical buyer’s journey. 

Every opportunity will move through your sales pipeline at a different rate depending on their level of interest, urgency, how much research they’ve already done, and so forth. Certain prospects may even skip stages in your pipeline — for example, if a buyer proactively introduces you to the budget authority before you’ve asked, you’d move the deal straight from “initial connect” to “meeting with decision maker.”

Sales Pipeline vs. Sales Forecast

Sales pipelines are often confused with sales forecasts as well. While a pipeline includes every opportunity a salesperson is handling, no matter how new or mature it is, a sales forecast is an estimate of the opportunities likely to close in a given time period.

In addition, pipelines and forecasts have different purposes. Reps use their pipelines to keep track of where prospects are in the sales process and the appropriate actions they should take. Meanwhile, a forecast shows salespeople and sales managers how closely they’re trending to goal and how to prepare. If your forecast anticipates you’re going to miss your quota, you should double down on selling activities. If your forecast shows you’re on-track to make 150% of your quota, on the other hand, you’d want to scale back your efforts for this month and start laying the groundwork for an equally successful next month.

Sales Pipeline vs. Sales Funnel

People often use “sales pipeline” and “sales funnel” interchangeably. However, a funnel suggests the number of prospects you’re working with steadily drops off as the sales process goes on.

This metaphor reinforces the incorrect idea you need three times as many prospects at the top of your funnel as the bottom. A sales manager following this philosophy would ask his rep to connect with 300 buyers to close 100 deals.

According to sales educator and expert Jeff Hoffman, a wide-brim champagne glass is a better metaphor. You may have a ton of prospects entering the pipeline — but the vast majority should drop off after the qualification stage. After prospects have passed the critical point, most should become customers.

The most successful reps often have 1.25x or 1.5x the ratio of opportunities to deals in their pipelines.

How to Build a Sales Pipeline

Here are the basic steps to building a sales pipeline:

  1. Define the stages of your sales cycle.
  2. Identify how many opportunities typically continue to the next stage.
  3. Work backward to calculate the number of opportunities you need at every stage to hit your revenue goals.
  4. Pinpoint the common characteristics of opportunities that convert for every stage — both actions the rep takes (like sending a follow-up email) and prospect responses (agreeing to a demo).
  5. Create a sales process or adapt your existing one around these actions and numbers.

Now that you have an overview of the process, let’s dive into the specific steps.

Sales Pipeline Stages

While the quickest way to define your sales pipeline stages might be copying a template, it’s worth the time and effort to develop your own.

After all, the stages of the pipeline must match your prospect’s buying journey to effectively help you track progress and predict revenue.

Review the typical process your customers go through. 

  • Awareness: The buyer realizes they have a pain point or opportunity.
  • Consideration: The buyer defines their paint point or opportunity, develops evaluation criteria and needs, and researches potential approaches.
  • Decision: The buyer has finalized their strategy and is now comparing vendors/specific solutions.

To illustrate, check out this hypothetical buyer’s journey:

inbound-sales-buyer-journey-1.png

With that in mind, your sales pipeline stages might be:

  • Connect: The buyer engages with your company, whether they open an email from a salesperson, attend a webinar, or download a piece of content
  • Appointment set: The buyer agrees to a meeting to learn more about how you can help them.
  • Appointment completed: They showed up to the meeting, and you confirmed next steps.
  • Solution proposed: The buyer is interested in using your product to solve their pain point or capitalize on their opportunity.
  • Proposal sent: The buyer reviews your proposal or contract.

The more complex your product, the longer your sales cycle will take — and the more stages there may be.

You should know how long prospects spend in each stage — both across the board and for closed/won deals. For example, maybe the average prospect spends two weeks in the demo stage, while prospects that eventually buy spend three weeks.

Knowing these benchmarks will help your reps and sales managers predict which opportunities are likeliest to close.

It’s also critical to establish yield probability (or conversion rate) per stage. Perhaps prospects are 75% likely to buy in the demo stage and 90% likely to buy in the negotiation stage. Once you’ve assigned these percentages to each stage, you can develop monthly and/or quarterly revenue estimates.

How to Determine Your Ideal Pipeline Size

Now you can work backwards to determine how many opportunities you need in each stage of your pipeline. Start with your target monthly or quarterly revenue divided by your average deal size. That tells you how many deals you need to win in a month or quarter.

Next, divide your target deal number by your yield probability per stage. If you need to win 135 deals, and your reps typically close 90% of deals in the negotiation stage, 150 opportunities must reach that stage in a month.

Repeat this process for every stage. Once you have total milestones, you can divide these goals by salesperson.

Here’s an example from Bob Marsh, the CEO of LevelEleven. Assume you need 2,000 deals per year to hit your target bookings.

  • 2,000 deals ÷ year = 167 deals per month
  • 8,000 proposals ÷ year = 667 proposals per month
  • 32,000 meetings ÷ year = 640 meetings per week
  • 64,000 calls ÷ year = 256 calls per day

If you have a 100-person team, that translates to:

  • 167 deals per month ÷ 100 reps = 2 deals per month
  • 667 proposals per month ÷ 100 reps = 7 proposals per month
  • 640 meetings per week ÷ 100 reps = 7 meetings per week
  • 256 conversations per day ÷ 100 reps = 3 calls per day

Salespeople can use these benchmarks to objectively measure their progress against goal. However, keep in mind every rep’s conversion rates will vary by stage. If one of your salespeople struggles to prospect, but has an excellent demo-to-close rate, she’ll need to have fewer initial meetings than her peers to meet quota.

Sales Pipeline Mistakes

Keep your pipeline healthy by avoiding these common errors.

1) Letting your pipeline shrink

Because many reps dislike prospecting, it’s easy to fall into what sales expert Colleen Francis calls the “sales trap.”

You’re receiving a lot of business and will definitely hit your number this quarter. Unfortunately, you’ve been neglecting to prospect — which means next quarter, you’ll be faced with a dry pipeline.

To combat this, Francis recommends making sure your sales pipeline is always stable or growing. If there’s a large number of deals in the negotiation and agreement pending stages — but few in the demo stage, and even fewer in the discovery stage — you should immediately start prospecting.

In fact, there should always be more opportunities in the left part of your sales pipeline than the right. That’s because the number of prospects in each stage progressively decreases, while the probability of closing progressively increases.

You might have 100 prospects in the “lead” stage. Opportunities in this stage historically close at 5%.

Meanwhile, you might have 10 prospects in the “demo” stage — but there’s a 50% likelihood they’ll buy.

2) Losing Leads

If you don’t establish a standard follow-up process, leads will end up slipping through the cracks. That’s easy money you’re leaving on the table.

Give your team a system for following up with leads, including timing, cadence, and contact method.

For example, you might say:

  • Every inbound lead is contacted within six hours or less
  • Every lead receives 10-12 touches spread out over one month
  • Every lead receives a variety of email, phone, and social media touches
  • Every touch includes new information or resources

A uniform follow-up strategy also helps your reps maintain clean pipelines by telling them when to disqualify prospects. If a prospect hasn’t responded by the last touch, they should be removed from the pipeline.

Assigning tasks to each and every lead is another way to shore up a leaky leads bucket. Require your reps to attach new tasks to opportunities whenever they complete the existing one, so they also have a defined action item. That might be “send meeting agenda,” “call again in three days,” “comment on two blog posts,” etc.

3) Allowing Your Pipeline to Get Messy 

Periodically cleaning up your pipeline is key if you want an accurate sales forecast. That’s because most forecasts use an opportunity’s stage to determine how likely it is to close — not its age.

Suppose you sent a proposal for a $2,000 deal to the buyer one month ago. He hasn’t returned any of your calls or emails since then, which suggests you’re not getting his business. However, since opportunities in the “negotiation” stage have a 90% close rate, your sales forecast would count this deal as $1,800 potential revenue in the next month.

That means your sales forecast is $1,800 off. And every stale deal will further widen the gap between expectations and reality.

How to Clean Up Your Sales Pipeline

1. Identify prospects who have been in your sales pipeline longer than your average sales cycle.

Use your judgment to determine whether they should be removed. For example, if you’re working with your champion to get the deal through their unusually complex legal review, you wouldn’t want to take that opportunity out — it might be taking more time than normal, but there’s a strong chance it will close.

2. Before you completely give up on a prospect, send them a sales breakup email. There are only three possible outcomes of a breakup email: They say they’re still interested, they say they’re not interested, or they don’t respond.

In the latter two scenarios, take them out of your pipeline. You can always put these contacts into a new list in your CRM, such as “Call back in one year.”

3. Make sure your data is up-to-date and accurate.

It’s sometimes necessary to move opportunities backwards in the sales pipeline. Maybe you previously identified the key stakeholders within the target account — but since then, two have left the company. You’ll need to move this deal back into the qualification stage until you identify the new decision maker.

In addition, verify close dates. Make sure they match up to your instincts; if the prospect says they’ll make a decision within the next two weeks, but she’s continually overestimated how quickly her team comes to a consensus, you should probably add a buffer to the close date.

Double-check opportunity dollar values as well. If these are too high, your sales forecast will be overly optimistic. Too low, and you’ll think you’re further from your goal than you really are.

4. Periodically review your sales pipeline for prospects who have gone radio silent, deals that have been stuck in one stage for longer than normal, and opportunities where you’ve lost progress.

Although it can be tempting to let these linger in your pipeline “just in case,” purge them. Not only will your sales forecast be more accurate — which will help you plan and make your sales manager happy — it’ll also be easier to focus on the deals you have a true chance of closing.

Do this exercise every week to month, depending on the length of your sales cycle.

Sales Pipeline Metrics

Use these metrics to gauge the health of your sales pipeline — and from there, the health of your team, department, and/or business.

  • Number of deals in your pipeline: How many qualified opportunities you’re currently juggling
  • Average deal size: The mean value of a contract
  • Pipeline value: The total value of every qualified opportunity in your pipeline
  • Sales velocity: The average time deals stay in your pipeline before they’re won

As your salespeople become more knowledgeable, your marketing team learns which channels to use to attract the best fit prospects, and your business becomes more well-known in its space, your sales cycle should decrease.

To grow, your pipeline value must increase. Average deal size, the number of deals, and/or conversion rates must go up.

Pipeline velocity is the speed at which leads move through your sales pipeline. The formula is:

Number of deals in your pipeline x overall win rate percentage x average deal size ($) / length of sales cycle (days)

Suppose you have 50 opportunities in your sales pipeline. Your average win rate is 40%, and your average deal size is $10,000. From initial contact to signed proposal, the sales process usually takes 70 days.

Your pipeline velocity = 50 x .4 x 10,000 / 70, or $2,587.14

That means approximately every day, $2,587.14 is moving through your sales pipeline. Obviously, the higher your velocity, the better.

There are four main levers you can pull to increase pipeline velocity. Unsurprisingly, they correlate to the four factors of the equation.

  1. Number of total opportunities: Move the needle on this input by amping up your prospecting efforts. If this number goes down, something may be wrong with your lead generation strategy.
  2. Win rate: Improve this metric by asking your salespeople to rigorously qualify and investing in sales training and sales enablement.
  3. Deal size: Help your reps sell bigger deals by teaching them how to upsell and cross-sell or target larger customers.
  4. Sales cycle: Identify the key steps that move prospects from stage to stage and make sure every member of your team is following those. Counterintuitively, “fast-tracking” an opportunity usually results in a longer sales cycle — the rep is forced to go back and make up for the qualification, discovery, and/or customized presentation she skipped, if she gets the chance at all.

In addition to pipeline velocity, keep a close eye on your conversion rates by stage. This allows you to see where prospects are dropping out of your sales funnel.

Suppose 60% of your prospects go from the sales presentation stage to the proposal stage. Why do 40% of them drop out? It’s normal to have attrition between stages, but you might investigate if there’s a larger problem. Perhaps your salespeople aren’t effectively conveying your product’s value, or they haven’t done enough needs analysis to tie their presentation to their prospects’ pain points.

If you don’t both monitor and investigate these metrics, you might not uncover pressing problems in time.

What Is Sales Pipeline Management?

Sales pipeline management essentially means estimating how much money you’ll make from your current sales opportunities.

In order to calculate this, you’ll need to know:

  • How many opportunities your sales reps are actively working
  • Which stage is each opportunity is in
  • How many opportunities typically pass from one stage to the next
  • The average deal size
  • Average sales cycle length

If you don’t have these data points yet — or your go-to-market strategy is in flux, so your numbers are constantly changing — you can make informed guesses. To give you an idea, perhaps you just shifted upmarket. Based on preliminary research, early sales, and talking to other companies selling similar products, you might predict your new sales cycle will last five months.

Of course, the more historical data you have, the more accurate your predictions will be.

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Luckily, a CRM can calculate these metrics for you. Not only can you compare your team’s current performance to previous months, quarters, or years, you can also analyze each of your salespeople individually. Perhaps one of your salespeople has an impressive connect-to-qualification rate but a poor close rate. He may need coaching on negotiation. Another salesperson, meanwhile, might struggle to prospect effectively. Help her identify and contact potential buyers.

How to Run a Sales Pipeline Review

High-performing teams use sales pipeline reviews to keep the entire organization working in sync.

Sales Pipeline Reviews vs. Sales Forecast Reviews

Both forecast reviews and pipeline reviews are critical to your team’s success, but make sure you’re not tackling them both in the same meeting.

A forecast review should focus on the deals likely to close in a given time period. This meeting helps managers predict whether their team will hit its quota.

The purpose of a sales pipeline review is to help deals move through the sales process as efficiently as possible. An effective sales pipeline review looks at fresh sales opportunities. Sales managers often make the mistake of jumping in to help in the later stages of the sales process, but by this time, it’s often too late for them to influence the outcome of a deal. If they truly want to make an impact, they should help reps strategize while the opportunity is still new.

Sales Pipeline Review Agenda

Depending on the size of your team, the length of your sales process, and how quickly new opportunities enter your reps’ pipelines, choose a bimonthly, monthly, or weekly cadence.

Each review should last approximately 30-60 minutes. You can either focus on the most important deals or review all opportunities in the beginning stages of the process — whatever works best for your team and structure.

1. Before the sales pipeline review, use your CRM to analyze how your rep is doing. It’s important to walk in prepared so you don’t waste valuable time getting caught up in the meeting itself.

2. Ask your rep to quickly summarize each deal. Give them positive feedback (especially if you observe they’ve applied previous advice), then delve into their assessment. The questions below may be helpful.

3. Develop an action plan for the deal and confirm their next steps. These steps should be added to the CRM, which will keep them accountable and help them avoid a memory lapse.

Sales Pipeline Review Questions

Here are some questions sales managers should ask their reps during sales pipeline reviews:

  1. How can we accelerate the prospect’s decision making process for this deal?
  2. What risks are we facing, and how can we mitigate them?
  3. Which competitors are we up against, and how can we stand out?
  4. Which objections have you surfaced so far, and how can we build those into our strategy for closing?
  5. Why has this stalled? How can we increase urgency?

An Easy Sales Pipeline Template

A sales pipeline template lets you set up your own pipeline in a spreadsheet. It’s easy to get started: Simply plug in each deal, its expected value, and the probability of closing. You’ll see a weighted average for that deal.

This sales pipeline template also has columns for the assigned salesperson, the prospect’s contact information, and next steps.

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While you can manage your sales pipeline in an Excel spreadsheet, it’s far easier to use a CRM. The HubSpot CRM gives you an up-to-date view of your sales pipeline, multiple ways to sort your deals, automatic activity tracking (so you don’t need to manually log calls or emails), and detailed contact records for every lead.

Master your sales pipeline, and you’ll master your results. You’ll be prepared for whatever comes your way — whether that’s a new competitor, a major opportunity, an industry shift, or an internal strategic change.

HubSpot CRM

Source: Sales Pipelines: A Comprehensive Guide for Sales Leaders and Reps
blog.hubspot.com/sales

What Makes a Great Manager, According to 60 SDRs

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Over the past month, I’ve surveyed more than 60 sales development reps (SDRs) from 40 companies about what makes a great SDR manager. There are many articles on this topic written from the manager’s perspective, but oddly, there are very few from the SDR’s point of view. 

I’ve distilled the feedback I received from these SDRs into the four major characteristics of a stellar manager. 

Note: The SDRs surveyed have on average 8-18 months of experience, which makes sense as most people only spend two to three years in this role. The majority work at B2B SaaS technology companies and sell to a wide variety of industries and prospects, from decision-makers at large agricultural farms to IT managers at small businesses. 

1) A Great SDR Manager Has Experience in the SDR Role

Direct experience was by far the number one thing most SDRs wanted in their managers, with over 90% of the respondents mentioning this. SDRs want someone who’s empathetic to the trials and tribulations of the SDR job because she’s been in their shoes.

“It’s really hard to take coaching from someone who hasn’t done the job before,” said one SDR from a Fortune 500 company. 

This qualification can be tough to meet. The modern-day SDR role is drastically different than the SDR role was 15 to 20 years ago, so some managers may not have equivalent experiences to their SDRS. However, even though the tools are different today, prospecting and qualifying have been around as long as selling has existed. If you’re an SDR manager, emphasize the most relevant experience you have.

2) They’re a Team Member and a Manager

SDRs want someone who will roll up her sleeves and help them get the job done rather than tell them what to do all the time. 

As Jeff Cuaron, a BDR at Zuora put it: “ [A great SDR manager is] someone that will get on the phone with the team, one that never stops prospecting and can find new accounts to target.”

This willingness to get their hands dirty and sit and help the team reach its quota is something that a wide range of SDRs said they value and admire in an SDR manager. It’s a challenging job, and they appreciate their manager taking on some of the pain! 

3) They’re Transparent

Transparency is huge when it comes to successfully managing SDRs.

About 75% of SDRs surveyed ranked transparency in the top three qualities that they want in their manager. 

“If I’m about to be fired or am not doing well at my job, I’d rather know ahead of time than be surprised,” said one SDR. 

When SDRs ask questions like, “How am I doing?”, they expect a straightforward, transparent, and honest account of their progress and whether they are meeting or exceeding expectations. 

Transparency about the sales organization’s health is also incredibly important to SDRs. 

They care about how the business is doing overall, and how their contribution fits into the picture.

To make SDRs feel like a valued part of the team despite always being on the front lines, consistently give them detailed insights.

4) They’re Invested in their SDRs’ Career Growth

I think all managers should care about and support their reports’ career goals. However, it’s particularly critical when managing SDRs. Many recent college graduates take on this position, often unsure whether they want to work in sales long term or not. 

It’s therefore unsurprising SDRs said they want their managers to help them pursue their career objectives, whether they want to become a quota-carrying salesperson, account executive (AE), or something else entirely.

Sometimes, this is tough on the manager; after all, some organizations expect that the SDR team to be pipeline of quality candidates into closing roles. 

But the worst thing that you can do as a manager is to force your SDR into a career they’re not truly interested in. Just like pressuring a bad-fit prospect, this will only end in churn (i.e. high employee turnover) down the line. Keep SDRs motivated to succeed by identifying what makes them tick and outlining a potential career path — even if it’s not the traditional SDR-to-AE one.

SDRs are vitally important to an organization’s revenue, as well as its future sales leadership. Invest in your SDRs now to reap dividends months and years down the line.

Free Sales Training from HubSpot Academy


Source: blog.hubspot.com/sales

How to Maximize Your Sales Team's Efficiency With Territory Management

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Willie Sutton, a famous bank robber, is best known for his response to a reporter who once asked him, “Mr. Sutton, why do you rob banks?” Willie’s response? “Because that’s where the money is.”

While I don’t propose that salespeople model their lives after Sutton’s, there was a simple brilliance to his strategy. Sutton knew where the money was, and that’s where he focused his professional efforts.

Salespeople, on the other hand, often waste their time calling on prospects and customers who offer a low return on their investment. They call on the most logistically convenient prospects, the prospects they’re most comfortable engaging in conversation, or the ones they’ve known the longest or the best. There’s a long list of ways salespeople misallocate their time.

That’s why helping your sellers prioritize their effort is such an important (and under practiced) part of sales management. In this area, you don’t need to spend a single dollar on additional sales training or enablement. Your salespeople could sell substantially more by just knocking on better doors.

Sales Territory Management

In our book “Cracking the Sales Management Code,” we label this activity of prioritizing seller effort as territory management. Territory management is a powerful sales process, because it is focuses on improving sales force efficiency (versus effectiveness).

To make salespeople more effective, you must invest in sales training, reinforcement, and other long-term strategies.

To make salespeople more efficient, you simply need to help them make the best use of their time. You could have a more productive sales team tomorrow if you could ensure they were targeting their most valuable prospects.

The process of territory management is a straight-forward series of tasks that provides clear guidance to the sales force.

Step 1: Segment and Prioritize Your Customers

Not all prospects and customers are created equal.

Whether they generate more profits for your company or they are otherwise strategically important, some are “A” customers that you must have. Some are “B” customers that you really want. And some are “C” customers that are nice to have.

To efficiently deploy your sales force against them, segment your customers into prioritized buckets.

Step 2: Determine How Much Attention Each Segments Receives

Once you’ve prioritized your customers, assess what type of attention each group warrants and in what measure. For instance, you may determine that your “A” customers merit weekly face-to-face meetings with your outside sales reps, while your “C” customers should each receive a monthly phone call from your inside reps.

Perhaps your VP of Sales should visit the As each quarter, while your Cs only communicate with your front-line salespeople. This is the core of territory planning — designing appropriate “call patterns” across your target customer segments.

Step 3: Balance Your Sales Territories

If it’s been a while since you went through this exercise, your territories are likely out of balance.

Some sellers will have too many customers, and some will have too few. You’ll need to reassign customers or re-draw territories to ensure there is sufficient sales capacity to accomplish your goals. For that matter, you might have too many salespeople, or too few. You might need to shift people’s roles or otherwise massage your org chart. Do whatever it takes to align your sales force with your desired customer segments.

Step 4: Execute

Finally, you need to communicate the new customer assignments to your team and enable them to execute their territory plans. Let me go ahead and inform you that this is where you will fail if you do not put mechanisms in place to track your sales call activity. Unless you can measure the implementation of all your planning, you will fall victim to the whims of your salespeople. Tag your customers with segment designations in your CRM tool and then log your sales calls for each.

Step 5: Measure and Iterate

The goal here is obvious: Make sure your salespeople address their best prospects first, their second-best prospects second, and their third-best prospects third. Prioritize, prioritize, and then prioritize again. Then execute, execute, and execute again.

The same principles apply whether your sellers are consultative, transactional, or both and whether your customers are large, small, or in between. Whatever selling resources you have and whatever prospects you want to target, the goal is to mix and match them until you’ve allocated your resources as efficiently as possible.

Imagine for a moment Willie Sutton is your head of sales. Would he approve of the way your sales force is allocating their time? When they wake up each day, are they frequenting major banks or the neighborhood lemonade stands? Are they returning from each day’s labor with bags full of cash or fists full of pennies? Are they spending their time on the right activities? Do they know with confidence where the money is?

HubSpot CRM


Source: blog.hubspot.com/sales

How to Fix a Dysfunctional Sales Team

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Corporate America talks a lot about the power of teamwork. Companies hang posters on the wall featuring people rowing in unison and the word “SUCCESS.” Leaders use phrases like, “There is no ‘I’ in ‘team.’”

Building strong teams is a well-intentioned goal. But in many sales organizations, it is simply rhetoric posted on the walls that never hits the halls.

Too many sales organizations are comprised of salespeople competing fiercely with each other — and not in a healthy, productive way. Reps forget the competition is outside the building, not inside. Unnecessary internal competition creates culture of “I’m hitting quota” rather than “We’re hitting quota.”

There are three main causes of this misplaced competitiveness.

1) An ill-defined or non-existent sales structure

Sales organizations often lack defined sales assignments. The sales department looks like a scene out of the Wild West. Each salesperson mounts their horse to go out and claim as many prospects as they can. They have no intention of actually calling on prospects more than once; they just want them identified in the CRM tool as “theirs.”

The best sales organizations carve out sales territories for each salesperson. These territories are defined by geography, industry, or sales potential. With this clarity, salespeople quit competing with their team members. They are comfortable sharing how they are landing new business because they aren’t worried about someone taking their opportunities.

2) A bad hiring process

The second reason for a lack of teamwork: The sales manager hires salespeople who don’t play well with others. Many sales managers still buy into the myth that top salespeople are self-centered, high-maintenance, and lone rangers.

It’s time to eliminate that unproductive myth. I work with top producers every day. And you know what? They are nice people. Do they want to win? Absolutely! Do they share how they are winning? Absolutely! The best salespeople are emotionally intelligent, self-aware, and generous. They are confident in their skills, and recognize that they can share every best practice they know success is dependent on execution. Knowledge isn’t power until it is applied.

These top producers also see the big picture. It’s great if they are achieving quota. But without everyone on the team performing, the company won’t do well. One or two top producers can’t scale a business. It takes a sales village to win and retain business.
Top sales producers understand that money can buy happiness. A profitable company invests in more resources, such as marketing, customer service, and new products. Such investments help salespeople attract and retain more clients.

3) Lack of trust

Sales organizations lose millions of dollars in revenue because their sales teams don’t cross-sell. The executive team holds a meeting and shares the importance of bringing the other divisions into the salesperson account base. Salespeople shake their head “yes,” but in the back of their mind, they are saying, “No way. I’m not bringing someone into my account. They will screw up my relationship.”

This lack of trust isn’t because they don’t like their fellow salespeople. It’s because they lack emotional intelligence.

First, they have poor interpersonal skills. Trust is built over time, but many salespeople don’t invest in building relationships with their team members. They talk about teamwork, but they don’t follow through. And since they don’t have strong relationships, they don’t trust others enough to bring them into important accounts. As a result, they lose commission — and the company loses potential revenue.

Second, reps lack the assertiveness to state what they need from their team members. They need to have frank conversations about cover how they would like their team members to handle the first meeting, second meeting, and ongoing relationship with the client.

Sales managers: Establish one more key performance metric for your sales team. Make it a requirement to meet with and develop a relationship with employees in other divisions.

Get your sales team working on the “We’re hitting quota” mentality by helping each other and building relationships. Remember, the competition is outside the building, not inside.

HubSpot Free Sales Training

Source: How to Fix a Dysfunctional Sales Team
blog.hubspot.com/sales

5 Reasons You DON'T Want a Team of Top Salespeople

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A company retained a sales consultant to increase sales. After visiting clients, observing the sales team, and quickly identifying ways to improve, the consultant worked closely with the Head of Sales to put in place a plan that yielded a 20% increase in sales revenue for the company over a six-month period.

However, net revenues plummeted. The problem: Operational capacity reached its limit, leading to rapidly declining service. Existing customers moved to other suppliers — and the plunge in retention far outweighed the new business.

Senior board members were furious, the consultant was fired, and the company attempted to recover the deficit by reverting to their previous processes. True story!

If building a world-class sales team is the goal, a company needs people who know what world-class looks like. This might include hiring a consultant to train teams and align internal processes, hiring a new breed of A-player salespeople, or creating a new leadership function. Whichever strategy is chosen, the result is great change within the organization.

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Without a strong foundation, aspiring to a world-class sales function is usually a waste of time. Here are five reasons this goal can be a costly, unproductive nightmare:

1) Lack of company-wide alignment

In the above example, the project was seen as a sales problem and managed in isolation. Sales performance improved, but no one considered the effects on other areas of the business. Aligning departments begins by agreeing on the company mission statement and goals, and ensuring a consistent message is delivered in every aspect of communication. Within this process, all departments must agree on the necessary changes to make the initiative work.

Aspiring to deliver world-class sales performance is a mentality that must be adopted by all areas of a business.

2) The company culture isn’t geared to high performance

This is a complex topic. For example, putting an A-player hire into a team of B-player sales reps has a high probability of disaster. Hiring an A-player without ensuring the support functions are ready to embrace a higher standard can also lead to operational resistance, isolation of the new hire, and a breakdown of departmental relationships. Leadership must understand how to integrate these people and manage the peripheral issues, such as the potential need for a new compensation plan, managing team morale and perceived preferential treatment of the new hire, as well as explaining the allocation of key accounts to the more experienced sales hire.

3) Building a world class sales team is expensive

The hiring, training, acquisition of new technology and altering the sales enablement process takes both time and resources. This must be balanced with the anticipated increase in revenues and potential disruption to the business.

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4) It opens your employees to being poached

Sales professionals are often the hottest asset in the industry, so it is crucial that companies inspire a culture of loyalty. This can be done with equity, remodeling incentive plans, and reconfirmation of the company values, but it should be decided before the process begins. See Dov Baron’s leadership book, Fiercely Loyal: How High Performing Companies Develop and Retain Top Talent.

5) The C-suite doesn’t fully support the initiative 

Business and process transformation must be led from the top. Building a world-class sales team isn’t achieved by simply hiring a sales trainer, but is a challenging process and needs to be supported by the board. In this regard, world-class leadership is an essential component.

So, is world-class really the goal?

Before making the investment, carefully consider the company culture and capacity of every function and compare the ROI with low-impact ways to increase revenue.

Without these five things in place, over-investment in increasing sales performance and a lack of company cohesion might be unnecessary, therefore failing to yield the desired results.

If you enjoyed this article, please share it. You can also download my 2017 research paper: The Impact of Social Selling on the B2B Landscape in the U.K. vs. U.S.A. Free to download from the homepage.

Editor’s note: This post originally appeared on Lee Bartlett’s blog and has been republished here with permission.

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Source: 5 Reasons You DON'T Want a Team of Top Salespeople
blog.hubspot.com/sales

5 Ways to Guarantee 87% of Your Sales Training Isn't Forgotten Within a Month [New Strategies]

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The first hurdle for any sales training program is to capture and keep your sales reps’ attention. If you bore them, you will lose them. According to Xerox, 87% of sales training content is forgotten within one month of the training. 

The good news is that sales training doesn’t have to be boring and unforgettable. 

It can be engaging, motivating, and even, dare I say it, fun. Instead of dry lectures and unexciting PowerPoint slides, combine technology with psychological principles about learning. To get better results from your sales training program, use these five strategies.

1) Use gamification

Sellers are competitive by nature. They’ll compete against the competition, their teammates, and even themselves. To harness that effect, use games. Not only do they make learning more exciting, they bring out your sales reps’ natural urge to compete to gain status or recognition as well.

Try incorporating flashcard-based games your salespeople can play on their phones whenever they have five minutes — like when they’re waiting in line for coffee or using public transportation. You can also use gamified quizzes with leaderboards, activity badges, and online contests. These elements both add some competition and give managers visibility into individual and team-wide performance.

2) Incorporate videos

Where do people go when they want to learn a new skill? They look for videos on YouTube. With that in mind, create high-quality “skills” videos to help your sellers learn about key concepts and strategies, remember them, and revisit them anytime, anywhere. Showing concepts in action helps sellers visualize themselves in the situation and even think about how they could do it better.

Two suggestions for using video: First, never simply record a lecture and put it online. If the lecture was boring in the classroom, it’s going to be even more boring online. Second, make sure your videos aren’t cheesy, over-acted, or low-quality. Learners — especially our millennial friends — are savvier than ever about quality. At best poorly-executed videos are unengaging, at worst they discredit the curriculum.

3) Encourage peer learning

Have you ever seen salespeople interact at sales conferences? Most sellers are highly social. But the costs of travel and time away from selling quickly add up, so sales teams often don’t meet face-to-face. Technology can help bridge the gap. Build opportunities for teams to learn together and from each other. However, that doesn’t mean doing your sales training on Twitter or Facebook. Use training and learning platforms with social elements that encourage sharing and discussing ideas, then prompt your reps to discuss what they’re learning and what’s working in real customer conversations.

Hint: Nothing drives salesperson participation like getting leaders and managers to actively contribute in the conversation and respond to comments and ideas.

4) Implement real-time progress tracking

Training fails when it puts a higher value on completing the course than developing one’s skills. To shift the focus of your program, use a skill strengths dashboards. This helps participants visualize in real-time where their skills are strong and where they need work, feel ownership over progress, and engage with the program.

You can add an additional layer visualizing how confident sellers feel about what they’re learning. People are less likely to use a skill if they don’t feel confident about it, so seeing where they feel strong and less strong helps sellers focus and review to develop the confidence they need to execute in the moment of truth — in front of the customer.

These dashboards are also handy tools for managers to decide where to spend their coaching time.

5) Pace your training

In advertising, “effective frequency” is the number of times you must be exposed to a message in order to remember and act on it. Psychologists debate how many times that is: Five? Seven? The number isn’t fixed, but the concept is: We need repeated exposure to messages over time to internalize and act on them. The same is true of skill development. We don’t attend a single day of training and come out having mastered the skill. True learning requires time, application, coaching, and practice.

For the best results, construct your program as a journey. Start with a baseline measurement of your reps’ skills, and visualize the results (see #4.) Next, create short learning modules that can be done during the workday or on the go. A skills workshop is a great way to give people time to synthesize and practice skills with a coach and get the feedback they need to improve. Support in the field is key — pair your sellers with managers who are ready to coach them. Finally, give them a platform that pulls everything they need into one place (preferably on their phones) and collects the data they need to see themselves improve and measure the results.

Sales training doesn’t have to be boring. It should feel fun, competitive, and relevant. These strategies will get your salespeople excited to bring their skills to the next level.

Want to learn more? Join me at the ATD Conference in Atlanta on May 22.  I’ll be talking about “Engaging Multigenerational Learners Through a Blended Learning Approach.”  Click here for info.

HubSpot CRM


Source: blog.hubspot.com/sales

The 16-Minute Exercise That Turns New Sales Hires into Top Performers 3X Faster

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I always have lived by the motto, “Time and pressure make diamonds.”
In business, we always have enough pressure but never enough time.

This being said, when new hires start in sales, marketing, or any department, I do something with everyone which is extremely unconventional — yet always yields amazing results.

First, I set the expectation their first day will be unlike anything they’ve been through before. I also share the fact that every single person in the company has been through the same process, which highlights the common bond the training creates.

Second, I introduce them to the HR onboarding manager to go through the necessary procedures.

That normally takes the first part of the day. Then the real challenge begins.

I sit the new hire down at a desk in the corner with only four things on it:

  1. A pen
  2. A piece of paper
  3. A phone
  4. A one-page summary of what our product does

I give them 15 minutes to study the material and return with the challenge.

In my hand is a piece of paper with 10 numbers. 

“Please dial these and do your best to sell our product.”

Often the most common reaction is an open mouth.

I hear comments like “I don’t know their names” or “I’ve never done this before.” But I insist, telling them that I will be here to listen.

On average it takes four dials for them to connect with someone. Then all hell breaks loose.

The new employee doesn’t know how to introduce themselves. Some of them open with “Hi, this is [name] from [company name]; how are you today?” — and immediately receive verbal abuse.

Others panic and start apologizing. Some people just get up and walk out. I never ask them back.

For most people, the call lasts about 30 seconds to a minute, with the new employee sweating profusely and looking up at me in distress.

I extend my hand and state:

“Welcome to the family.”

What you have gone through today gives you an idea of how important each and every person is in this room.

Without Marketing, how will people recognize our name when you state it at the start of the call?

Without Sales, who else is there to take the endless pain and suffering of daily rejection

Without Engineering and Product, who can create something amazing enough to captivate and maintain the customer’s interest?

Without HR, who is there to support us during our highs and our lows?

After that one minute, you now understand everything behind our business.

You can look forward to every single day you spend at this company — because every single moment from now on will be better than this.”

Creating a moment of intense pressure accomplishes three things:

  1. It creates a permanent bond between all members of the company
  2. It instills an appreciation for the function of every department
  3. It establishes an all-time low, making all future difficulties feel minor in comparison

Back to my original adage: Time and pressure make diamonds. Through trial by fire, I create more diamonds and in a fraction of the time.

Do you agree with me, or am I taking this concept too far? Share your thoughts with me in the comments below.

Editor’s note: This originally appeared on LinkedIn and has been republished here with permission.

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Source: blog.hubspot.com/sales

7 Strategies to Get a New Sales Rep Closing by Week 3

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I just read a piece about how to deal with a brand-new sales hire. It was, to say the least, ridiculous. The opening piece of advice was to start the rep on a Friday rather than a Monday because they may feel “disengaged” on a busy day.

Reality: This is sales. Dive in and start swimming! The water’s fine.

If the first day is busy, ask to help, listen to sales conversations, and take notes. Reps should be learning from the get go.

And if day one is discouraging to the rep, day two won’t be any better.

Rather than hear more of my diatribe on how inaccurate (and complicated) this guy’s advice was, let me just give you a few real-world ideas about how to actually get a new salesperson involved, trained, supported, and rolling on day one, and making sales by week three — or sooner.

Managers, this advice requires your personal involvement and responsibility for the rep’s initial and ongoing success.

Reps, here are the steps that will get you to success and commissions.

1) Assign pre-work

Reps must study the history of the company, the competition, the marketplace, the products, and especially the present customers and why they’re buying. They should also be familiar with the company’s present market position and performance.

2) Prep the team

Management must prep the team to be ready to meet and welcome the new salesperson. Ask reps to each prepare a “tip for success.” Consider recording them so the new hire can study the video. You’ll also be able to send this content to future hires.

3) Provide valuable tools

To help your salespeople be as successful as people, teach them how to use your CRM and other sales technology tools starting on day one. The longer they go without adopting your stack, the more difficult it will be to incorporate into their routines.

4) Use real-world training

Studying in a classroom won’t properly prepare salespeople for real sales calls and relationships. Product and sales training must include a week-long period working at three different customer’s offices. This gives reps an opportunity to discover your product’s use and value for themselves. They may also discover an opportunity to expand an existing account. Yes, the new hire may actually facilitate a sale during training — imagine the confidence boost this will give them.

You should also train new reps on presenting, using social media in the sales process, asking questions, building rapport, creating emotional engagement, providing value, and closing.

5) Provide ongoing support and useable training

Online on-demand training for both personal development and sales skills is critical. Use a mixture of customized lessons so that the salesperson knows how to attract, appoint, engage, relate, present, persuade, and persist. You should also show them 10 or more video testimonials from customers stating “why they bought.”

6) Do not have them shadow your best salesperson

Managers, your top-performing rep doesn’t want to have a novice asking her questions. Especially when you’re not giving her a dime for sharing her time and expertise. It’s the manager’s job to show the new rep how you do it. Set appointments, go on sales calls, and make a few calls. Show the new salesperson how it’s done, and you will earn her respect and put her on the path to success.

7) Take responsibility for the new rep’s success

If you’re the sales leader, erroneously referring to yourself as a manager, the preparedness of your new hires, the support of your new hires, the fate of your new hires, and the success of your new hires is YOUR responsibility. No one on your “team” cares if the new kid lives or dies — except you.

Here’s the question: Why are you “delegating” (a.k.a. shirking) the responsibility for the success of your new hire to someone with zero skin in the game?

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Source: blog.hubspot.com/sales