Marketing and sales metrics can give you a window on the future and the insights you need to optimize sales. That’s because once you understand the metrics that drive sales, you can more accurately predict what’s ahead. Also, if you’ve defined the measurements that lead to perfecting your sales process, you will naturally move toward it.
With today’s technological advances, there is no excuse for not understanding what fuels your sales engine. Number crunching is no longer reserved for the sales and marketing nerds. It is the lifeblood of the most successful sales and marketing leaders.
We’re accustomed, of course, to the essential measurements for outbound prospecting calls – the number of calls per day, dials-to-connection rates and more. However, the metrics for inbound leads are not yet ingrained in the sales and marketing DNA.
But just because inbound leads find their way to you, it doesn’t mean that they take care of themselves. They need to be qualified and nurtured. So you must determine the best way to lead a person on their journey from initiating contact with your company to becoming a closed sale. Also, you want to establish how to forecast sales you’ll likely generate from the inbound part of your sales funnel.
Here are some metrics that can help you forecast sales from inbound leads and increase your sales success.
1. Response Time to Leads
A powerful predictor of future sales is response time to leads. Statistics from InsideSales.com show that on average businesses that respond within 5 minutes are 21 times more likely to qualify a lead than those that wait a mere 30 minutes. The increased qualification rate is partially because you’re more liable to connect with people within the first five minutes of them filling out a form. Also, when you do so, your company or the problem you help people solve is already on the top of their minds.
Of course, the statistic above is an average and may not be an accurate reflection of your business. That’s why you need to measure response time and how it relates to your company’s sales opportunities and close rates. This metric gives you the parameters for your own business’ success.
To determine the ideal response time, look at the time it takes from when a contact fills in a web form to when they receive a callback. Analyze it for your whole business and by rep. See how response rate correlates with sales opportunities and conversion rates.
Most businesses will find their average response time is too slow. But once you know what you need to achieve to increase sales rates, you can do the necessary calculations for the return on investment of adding technology or people to increase response time.
Also, you may be able to ratchet up response time by helping reps reprioritize how they go about their day. While some reps are knocking the response-time ball out of the park, others may be striking out. If so, train those who are slow off the mark. Coaching them on how to improve in this area could make a big difference in their sales. Share with them the statistics of reps who are doing it right and show them how quick call backs could positively impact their commissions.
2. Lead Follow-Up
According to research, for a little more than 4 out of 10 sales reps, lead follow up is a once and done thing. That’s despite the fact that 80 percent of sales happen after five follow-ups. It’s not surprising because salespeople are human. That means they’re naturally wired to go for instant gratification. If they don’t get what they want on the first call, they may not persist.
You need to discover the lead follow-up rate that creates the best return for your company and at what point there are diminishing returns. Once again, look at each rep to see how their follow-up metrics compare to the ideal. Then let reps know how many follow up calls you expect them to make and how you expect increasing follow-up activities will impact their performance. Finally, measure their follow-ups to ensure compliance.
3. Time on Hold
You may have a campaign that encourages people to call you rather than fill in a web form. After all, with new click-to-call technology that uses Voice over Internet Protocol (VoIP), the inbound call is becoming more common. Although these callers are ready to talk, they’re also busy. You can’t afford to put them on hold and let them hang up before you speak with them.
So measure and minimize your hold time. Also, look at the rate at which calls are abandoned. Ideally, this number should be zero percent.
4. Inbound Leads to Opportunities
The above measures all influence your lead-to-opportunity ratios — a metric that gives you a feel for the health of your pipeline. Combine this with the opportunity-to-sale metric, and you can predict the number of inbound leads required to meet your sales objectives.
To create a valid lead-to-opportunity metric, you need to have a robust definition of an opportunity. Today, companies often use lead scoring to assess opportunities. Within scores, there are two components. First, the number of points you decide to give to each activity a prospect engages in, such as downloading a white paper or visiting your website. Second, the score a lead has to achieve before you turn it over to sales.
Lead scoring alone may not be enough. To ensure leads are qualified before handing them to sales, you want to assess their budget, authority, need and timing (BANT). Since no amount of online activity matters if someone cannot take action due to lack of resources, have your business development reps call leads and ask a few qualification questions.
5. Inbound Opportunities to Sales
One way of judging whether you have a good definition of an opportunity is to measure how many of them turn into sales using the opportunity-to-sale metric.
Also, if you break the opportunity-to-sale metric down further, for instance by lead source and firmographics, you can learn how to increase sales by targeting the highest converting segments with the most efficient tactics.
6. Inbound Leads to Sales
If you know your inbound lead-to-sale ratio, you’ll understand exactly how many leads you need to bring into your funnel. As you optimize your process, you’ll likely find you need fewer leads because you’re able to generate more revenues per lead.
To forecast your inbound sales and crank up your sales and marketing machine to the next gear, measure and optimize response time and lead follow-up while minimizing time on hold. Also, track inbound leads to opportunity, opportunities to sales, and the summary statistic — leads to sales. Make adjustments to find out what works best to increase your efficiency and success rates.
After relocating to Europe, Sabrina Ferraioli became Account Director at TECHMAR, where she drove EMEA business development strategies for clients such as HP, Oracle, and Olivetti. Today, as VP of Global Sales for 3D2B, she builds and manages the multi-national sales organization, developing and implementing new business strategies to acquire and retain customers and grow the company’s revenue.
