It can often seem like data analysis and efficiency optimizations are the realm of the VP or the C-level. It makes sense when you think about it- those are the roles that are tasked with thinking strategically, making larger decisions to improve the overall health of the organization.
But there is another role that can and absolutely should be using data analysis tools to optimize performance, and it's the role that is most involved in making the tactical, day-to-day decisions: the sales manager.
Data Analysis for the Sales Manager
In fact, sales managers should be using data at least as frequently as the VP. If your goal is to use data to make smarter decisionsevery day and improve the overall health of your organization then sales managers are in the best possible place to influence those daily best practices. According to Salespop "The sales manager has a weighty responsibility. On his or her shoulders rests the overall responsibility of ever increasing sales; training, coaching and performance of sales personnel; and the prediction of how well sales will do in the future, called sales forecasting."
Let's break down those roles a little bit to clearly identify the five things that sales managers are most often charged with:
- Increase Sales
- Improve Performance
While these are definitely weighty responsibilities there is good news: these are precisely the sorts of decisions that could use data to improve. And so, to discover how data would fit into each of these sales manager objectives we will provide three key performance indicators you can act on today to improve each aspect of your job as a sales manager.
1. Increase Sales
- Lead Response Time: We've said it once and we'll say it again- if you contact a lead within an hour of receiving it then you are seven times more likely to have a customer. Acting on this KPI always means increased sales fast.
- Sales Cycle: This means the average time it takes a deal to close. As a general rule you should be looking at any deals that seem to be stuck in the pipeline and either assign them to new representatives or drop them entirely.
- Win:Loss Ratio: Take your historical data and deal size into account and see how many you are winning and losing and act on it. How? If you are winning fewer larger accounts and losing lots of little accounts then change your strategy to focus on the larger and change your qualification standards to weed out the smaller deals, thus increasing your sales.
- Efficiency Ratings: There is no more efficient way to train up your new sales reps than in teaching them what is a good use of their time. Efficiency ratings take a look at every action your reps are doing and then follows those actions down the pipeline to won or lost deals. Simply train your new reps to do the actions that most often result in wins for your organization.
- Successful Steps: This KPI looks at individual steps within your sales funnel and tracks them by how much time each opportunity spent in each step. If opportunities frequently stall in one particular step you can take action by training your new representatives in that step, thereby bringing up a more efficient next generation of reps.
- Causal Analysis: This KPI has you examining your wins more closely, specifically collating that data with successful steps to see the pattern and discover where the tipping point for your wins was. If you can train your next generation of reps to repeat those successful processes every time then you will undoubtedly see an increase in sales.
- Opportunities by Representative: Essentially this KPI is breaking down your pipeline by employee, comparing that data to the overall status of the opportunities each employee is responsible for in order to determine who your top performers are and why. Once you know that information you can pair the top performers with lower performers, bringing them up.
- Employee Funnel Progression: But say that you have an employee that is brilliant at getting opportunities through a certain step in the pipeline, whereas another is terrible at that same step. Neither are top or bottom performers, but by comparing the data you can discover a strengths/weaknesses match. Pairing those reps together should see improvement in both.
- Closed Deal Size Aptitude: Another representative view, this KPI breaks data down by representative, win/loss, and deal size. This way you can discover your reps that are best at closing certain deal sizes and make sure that you are assigning them opportunities based on their strengths.
4. Improve Performance
- Overall Sales History: Performance improvements don't happen overnight- they take time. That's why looking at your overall sales history is important, so you can see the bigger trends before you start making any big changes to the process. The first step in improving performance is knowing where you've been.
- Pipeline by State/Region: The next key to using data to improve performance is realizing that one set of efficiency improvements will not necessarily work across all regions of your business. To assume so is to over-simplify a complex issue. Instead, break down your pipelines by state and region to discover what sort of actions you can take in that geographic location that make sense. This allows you to think locally and more agile.
- Success by Season: In addition to geographic location you need to look at success by season. This is different from overall sales history because this KPI is breaking down that history into months of the year. When you do, look for patterns across time that can help explain seasonal dips and bumps: a downward trend might not be so bad if it correlates to a certain time of year every year. And what's better: if you know it's coming you can plan for it.
- Size of Win Trend: Overall sales history, pipeline by state/region and success by season are all important KPIs when it comes to making an accurate forecast, but size of win trend tops them all. This KPI takes the data from each of those metrics and compares it historically, specifically looking at the size of deals that were closed by location and time. With this knowledge in hand you can make accurate, reasonable forecasts for your sales reps, ensuring that you aren't putting unrealistic expectations on them and thereby harboring resentment.
- Pipeline Inflow/Outflow: This KPI is important to take into account when making your predictions becuase it should be telling you how many opportunities your reps are recieving from which marketing sources and thereby should impact your forecast. If you are recieiving fewer deals from marketing it might not be the month to heap a higher amount of closed deals on your team.
- Average Deal Size: One of the best predictors for any accurate forecast, knowing the size of your deals on average will help you understand where you are going in the future in terms of revenue. When making your predictions make sure you are analyzing this data first and drawing your numbers with this in mind, thus ensuring that you have a sound reason for making your forecast. Acting on this KPI means changing the deal size gradually rather than all at once.
Keep a close eye on these 15 sales manager metrics and we guarantee you'll start seeing improvements in each area fast. Your CRM is already gathering the data you need for each of these KPIs, all you need to do is dig into the system and access it. We recommend putting the data into a visualization that helps you easily identify and spot trends between these 15 KPIs for even faster improvement. Also, make sure to check out our Sales KPI eBook where we outline where each of these (and other) KPIs come from, how to formulate them and how to act on them.
If you would like to dig deeper into your data, it starts with understanding what metrics matters most. Download our free guide "Sales KPIs that Drive Performance Outcomes" to find out.