Every significant business result consists of small steps one should take. For instance, our revenue at Refocus has reached 4.8M since launching in January from scratch. And what’s more, it was not a surprise: it is about carefully working with metrics and proper decomposition. Our goal is to divide any objective into many simple steps that we can manage on a daily or weekly basis. For example, controlling total revenue might seem impossible in the long term at first. Logically, you’ll earn a lot if your product is of , if the marketing is , and if the sales department is . Doesn’t help at all, does it? solid quality working fine effective But as soon as you determine makes each of them “effective” or “good,” – your business will succeed. The decomposition of revenue, for example, is pretty apparent: revenue per day multiplied by the number of days. what The direct way to compute revenue is by addressing the sales department and its effectiveness, which can be measured by these simple micro-levels metrics: The number of sales specialists on the team The number of leads for the sales forces to work with CR of every sales manager Then you can model your revenue: if you want to get X per year, you have to earn Y each month, and you only have to make sure that each person from your sales force brings enough to reach your target. Switching to Micro-Level The very first step to take when analyzing your metrics is determining each manager’s target results. Human capacity is limited, so you have to know how much time and effort everyone should put in daily. To do so, we have a look at the best-performing person in our team and see what techniques they used, how much time they spent on the task, etc. At the very beginning of your business, when you don't have the resources to hire a team, this can be done by the Head of the Sales department or even by the founder. I remember doing it myself when my co-founders and I started our first business: we called our leads, spoke with them, and observed what techniques and perks worked and what did not. The characteristics of the best-performing sales managers are transformed into for all the sales forces. Here are the key metrics we pay attention to: the rules and KPIs 1. The Number of Leads Distributed to One Person The importance of this metric should not be underestimated. Every day, you should check if every salesperson gets neither too many nor too few leads. Obviously, when the sales force’s capacity is higher than the number of clients they have to work with, you're either wasting money on hiring too many people you don’t need, or your marketing is ineffective. But giving one manager too many leads is less often considered to be a problem than it is supposed to be. In our practice, we use the informal word**"overleading"** – overloading one sales specialist with leads. When this occurs, sales forces are unable to communicate with the clients efficiently: they have to hurry, which as a result, makes them sell less effectively. Consequently, there’s a negative effect on the CR of each manager and ROMI. Usually, we check this metric manually and create a table if there’s a concern. The situation on the screenshot below is an excellent example of “overloading” – normally, a salesperson should get around 80 of them per day, but too many leads were attracted. If we see this situation, we manually delete the manager facing it from the distribution of new ones. 2. The Number of Calls Initiated by One Manager and the Time Spent Speaking With Leads I put these two metrics together because they are very interconnected: they are the basis of determining if the manager is working effectively or not. As I already said, we have the normative each person should meet. There are various tools to control it. The one we use is shown in the picture below: the green one means that the manager was speaking, the blue means he or she is trying to reach the client, and the red one means it is not working. A proper daily analysis will help reassure you that you have only influential people on your team. If we see that the performance of a given manager is lower than it's supposed to be, we issue a warning to them, and their bonuses can be voided. Given that the manager doesn't change their behavior after three warnings, they are supposed to be fired. Managing this metric daily, together with regular quality control of using the script, helps us make sure that only the best-performing people are part of our sales forces. Therefore, this will make our revenue grow continuously. 3. SLA of Each Attracted Lead The Service Level Agreement, as we call it, represents the time that passes between the client leaving his or her contact details and the manager conducting the call. This metric is crucial for the conversion rate: we have measured several times that there’s a between the time passing and the CR. direct correlation Ideally, managers should call customers back within 5-20 minutes after contacting them. It is worse if they call back within 20 minutes to half an hour, but it is permissible. If the callback time is from 30 minutes to an hour, the conversion rate may be reduced by 20-30%. If managers call back customers for longer than an hour after contacting them, this reduces the conversion rate by half on average. We aim to reduce this time to 5 minutes by applying an auto-calling system: the call is made automatically as soon as there’s an accessible manager. I will share the results as soon as we implement them. For now, we have a dashboard that shows the SLA per day in real-time; the black line shows the median time, and each point is one lead. We can have a look and ask what went wrong. at each outlier, Usually, the problem is explained by one of two metrics mentioned above: the sales manager was "overleaded" or didn't work hard enough. How to Keep Track of Them To collect the data I described, we mostly rely on our analytic system. As I've mentioned in the on this topic, it helps to automate the distribution of leads and also share the statistics. previous article Statistics of our sales managers provided by our analytical system: the number of leads they get, CR, and the number of closed deals However, this is when a widespread mistake occurs: people collect a lot of metrics and don't react on time to make changes. Our approach is quite the opposite. In our experience, you can divide metrics into two major groups: To be analyzed every day To be analyzed once a week I’m sure that if we had a look at metrics less frequently, we would risk missing some significant problems and wasting our money. Our sales department is divided into several teams with a dedicated manager whose responsibility is to control the effectiveness of each of their subordinates. Nowadays, we have more than 120 people in our sales force, so it’d be impossible if only one manager tried to control all of them. The system in which each head of sales has no more than 16 employees in their team allows them to control each of them properly every day. Among these metrics are the number of leads distributed to a salesperson today and how effectively each of them handled it. Moreover, they have to transfer information to the marketing department on time. If there are enough leads, they should manage the daily budget of the advertisement campaign and not waste money on attracting leads anymore. The second group is observed on a weekly basis. For this, we have a for the sales forces and the product and marketing departments. We look at the results of each team and determine what was effective and ineffective in their practices and decompose CR of the week: cross-department meeting Observe the SLA and plan how to deal with outliers Analyze which changes were most effective Share customers’ concerns to improve the marketing strategy and the product Sometimes, the problem is hidden not in the sales department but in other places: people find new promos suspicious, or low-quality leads are attracted. In this case, micro-level metrics help analyze what’s wrong because they allow us to see the bigger picture. To Conclude The decomposition of metrics and a proper analysis of them will save you a lot of money and time: You can be sure that you have only top-performing people in your sales forces. You wouldn’t waste money on attracting too many leads that are out of your salespeople’s capacity. By obtaining information directly from customers, you always have new ideas to improve processes in other departments. Photo by on Mikail McVerry Unsplash

Too Long; Didn't Read

Questions about cloud security? Get answers here.

Paying Attention to Every Detail: How to Work With the Metrics to Increase Your Revenue

Too Long; Didn't Read

Alexander Solovyev

About Author

TOPICS

Languages

THIS ARTICLE WAS FEATURED IN...

Paying Attention to Every Detail: How to Work With the Metrics to Increase Your Revenue

Too Long; Didn't Read

Alexander Solovyev

About Author

TOPICS

Languages

THIS ARTICLE WAS FEATURED IN...

RELATED STORIES