You got your latest check and it was...okay. You thought you had sold big last month, but once you see the numbers in your bank account you’re not too sure.
So, how do you really tell how you did? The key is effective tracking of your sales.
The sales process can be lengthy, so it’s easy to lose track of the small wins and failures that lead to the big stuff. The more numbers you track, the easier it will be to understand where something is going wrong. And more importantly, it will be easier to know how to improve.
A note before we get started: I’m sure you’re motivated by your company’s success somewhat, but let’s be real here. Sales is all about closing deals and making commission. And accordingly, the suggestions here are going to be focused on how to meet your revenue goals.
First, you should make sure you have clearly defined what success means to you. What kind of revenue were you expecting? Make it an exact number. Making your goal clear and precise increases your chance for success.
Did you write that number down? Got it? Okay, now we’re going to calculate exactly how to get there.
Metrics and Statistics
Now comes the real calculations. (Hint: if this is overwhelming for you, skip to the next section.) We’re going to figure out how many actions it will take for you to meet your revenue goal.
- The monetary value of an average sale for you, your company, or your industry
- The average commission for an average sale
- How many sales you need to meet your monthly commission goal
By working backwards from your goal, we can calculate exactly what you need to reach it.
Write out your sales process and the actions you do for each phase. You’re going to calculate how many actions (meetings/phone calls/emails/etc) you need on average to close a sale. This may vary greatly between industries or even individuals. That’s why it’s vital that you track them yourself. If you don’t have this information already recorded, try tracking these for a month to get a rough estimate.
That’s Too Complicated!
It’s true that there are a lot of statistics you can use to track your sales success. In researching for this article, I found so many articles listing “vital statistics.” But the problem with blindly using metrics like these is you may lose sight of what they mean for you.
Because the main point of using statistics is to improve your sales process. And the main point of that is to improve your revenue. When the statistics start to seem too abstract and removed, change how many metrics you’re tracking, and what they are.
If you’re losing sight of your goals, it may be time to try just one calculation. Saleshacker recommends a simple formula to get a big-picture idea of your performance.
Revenue = Opportunities * ASP (Average Sale Price) * Win Rate
If you plug in your current variables and find your revenue doesn’t come out as high as you’d like, you know you’re not selling successfully!
Analyze what part of your sales process needs work. This is when tracking many statistics comes in handy, as you can tell exactly when something doesn’t add up. Use everything you have to get a big picture of where to improve and how.
For some, it’s best to measure as much as possible. This allows you to analyze your performance in a very precise way. For others, however, this type of analysis will lead to stagnation more than action. When that happens it’s best to go back to simple metrics that directly lead to the most important number: your bottom line.
However you do it, tracking is a vital way to evaluate yourself and improve over and over again.
This post is part of a series on sales. To read more articles like this, read our master guide to sales.
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