8 Metrics You Must Know about Marketing, Leads and Sales is the final chapter in our ebook, “Build Your Own Automatic Selling Machine”. Click here to download the entire ebook now!
Can we get real at this point? If you’re a race car driver, you need to know how fast your car can go and how far you can go on a set of tires. If you’re a farmer, you need to know how many bushels of wheat or beans or whatever an acre of crops are going to produce. Whatever your business, you certainly would measure the results of each effort so you can use that information to predict future results.
Why is it that most business owners don’t measure what’s happening in their sales and marketing efforts?
Really?! Can you really quote any hard data about your marketing and sales processes other than what you spend on ads and marketing, what your payroll is and how much you sell each month?
Sorry but, that is NOT going to cut it!
Think about this in the farmer example… If all you know is how much you spend on seeds and equipment and supplies dur
ing the year andthen how much you sell your produce for after the harvest then yes, you can figure out if you made money or not. But, you can’t do anything about it.
Next year, you can say “I lost money on that wheat crop last year so, I’m switching to corn this year because the seeds are cheaper.” That’s no guarantee of better results. You need to know how many plants grew on an acre, how much water they got, how many plants died due to disease or bugs, etc.
With that information you can adjust next year – plant closer together, bring in a watering system, etc. and get better results. You can also compare this crop with alternatives more clearly.
It just makes sense right? If you’ve got a sales team to manage, then you either measure the process or get used to firing sales people regularly and constantly training new ones that won’t last. The key to hiring and keeping sales people is making them successful. How can you help them if you don’t look under the hood?
After 7 years of working with business owners, sales executives and marketing gurus, I know that it’s just not easy to get the data that matters. Think about it like this… If you’re not doing it now because you can’t figure out how to, then your competition probably isn’t either. What if you figured out how to measure your marketing and sales processes so you can turn them into an Automatic Selling Machine?
Warning – most contact management, CRM and marketing analytics vendors are going to try and sell you more than you need, over complicate the challenge and expand the cost and cause you to fail to get what you really need – some real numbers you can use.
Sure, using a CRM solution, contact management system or marketing analytics solution can make measuring your process very easy but, only if you keep it simple.
That’s our objective here – to highlight the short list of things you need to measure so you can make it happen with or without software.
Really, you can use a piece of paper or a simple excel sheet to do this. My experience helping businesses implement CRM solutions tells me that you’re better off starting very simple and getting some data than spending 6 months trying to find and implement more complex marketing analytics and CRM systems.
The basic components of any marketing and sales funnel are Unqualified Leads, Qualified Leads, Value to your company, Won Sales and Referrals. That’s it. No reason you can’t start keeping that info in a spreadsheet right? In fact, if that’s all you have to have, setting up a contact management system to do it is easy too.
Again, the problem is that you’ll get dazzled by all the other things the various CRM solutions can do for you and things will get complicated fast.
#1 Metric You Must Know about Marketing and Sales
Total number of leads coming in.
Simple right? Well, it is but, it means you need to know about all of them. All the referrals your sales people get that they never mention to you. All the call-ins that come in but, never get called back by a sales rep, etc.
#2 Metric You Must Know about Marketing and Sales
Where does each lead comes from?
How did they hear about you? What ad did they respond to? Where did you meet them? Who referred them to you?
Again, simple stuff but, the key is to be sure you get this information for each and every lead you talk to. If you get 100 leads a month and fail to collect this information for 5 of them, it could really throw off any analysis you do.
#3 Metric You Must Know about Marketing and Sales
How qualified is each lead?
This one is tougher. The reason is that you have to decide on objective criteria that makes a lead qualified. Do they have a need for what you sell? Do they have the money for it? The answers don’t necessarily need to mean that are absolutely going to buy from you. Just that there is a basic fit between their needs and situation and your company. They’re worth your time. Choose the 4 or 5 questions you have to ask every new lead and start capturing the answers for each and every lead. I know, you won’t be able to get all that information for all of them. That’s OK. If you don’t get it all, they’re not qualified.
#4 Metric You Must Know about Marketing and Sales
What’s the value of the sales opportunity?
Best case scenario, what can you sell them in the near term? What is this opportunity worth to your company? Pretty simple.
#5 Metric You Must Know about Marketing and Sales
What market segment do they fit in?
In every business, you have a few segments you have developed unique solutions for. It might be business vs. residential or small vs. large. You’ve got to know where they all fit.
#6 Metric You Must Know about Marketing and Sales
Product you propose to them.
This could be a direct one to one relationship with the segment they fit in but, it’s usually not that simple. Some customers will request certain solutions even though it’s not what you’d recommend for them given the segment they’re in, etc. Again, you’ve got to track this for each lead.
#7 Metric You Must Know about Marketing and Sales
Won or Lost
Did they buy or not? Simple right? What about if they just say “call me later”? (that’s a No if they don’t buy within a reasonable amount of time BTW)
#8 Metric You Must Know about Marketing and Sales
Did they give you a referral?
Why do you need to know this? Well, you need to know if they were asked for one thing.
Also, this is a great measure of the satisfaction of that client. Let’s face it… You can value customers by how much they spend but, a customer that gives you referrals is much more valuable than one that spends the same and doesn’t give you any referrals.
That’s it. That’s all you really need to know!
With this information you can look at each and every source of leads, every advertising expense and determine its value to you.
You’ll compute the cost of each dollar in sales based on the source of the lead and you’ll be amazed at how different it is from one marketing channel to another. Variances of 100% or more are common.
Really, just start putting each new lead in a spreadsheet with columns for each of the metrics above and keep it up to date.
In fact, if you don’t have a centralized contact management system or CRM solution in place today, creating this spreadsheet is a great way to start looking for a CRM system. You can share the sheet with potential vendors and they’ll be able to see what you need to measure.
Just get started tracking and measuring these things right away. Even if you’re not sure where this is leading, I promise you it will uncover valuable insights that will lead you to more profitable and sustainable growth.