Successful sales professionals are, more often than not, very driven people. Spurred daily by a strong desire to expand the customer base, grow the business and enjoy the financial and other rewards that come with hitting and exceeding sales targets. Sales reporting is the best way for them to demonstrate their achievements. High-performing sales executives know what’s required to identify sales opportunities and turn prospects into customers.
While success at sales has always been part art, part science, it’s the science component that has become increasingly relevant and important in our modern, data-driven business world. More than ever before, businesses are relying on computer-generated data to set sales strategies and guide sales-related decisions.
If you manage a sales team, you no doubt rely on some form of sales reporting to track the performance of your sales reps and assess the ongoing performance of your team as a unit. And that’s a good thing, as the typical sales report is very useful in providing an overview of sales activity within a business. A common problem, however, is that a lot of businesses do not go far enough in their sales reporting. At its most basic, a sales report will provide a snapshot of sales results and where things are currently at in the sales pipeline, but will not necessarily show data that can used to improve sales results, identify trends, gain insights, make forecasts and pinpoint shortcomings in the sales process.
To get the most out of sales reporting there are plenty of things you can focus on. But in doing so you don’t want to burden your team with excessive reporting demands or waste time producing reports on things that don’t really matter that much. The types of sales activities and processes you should be generating reports on will largely be determined by the type of business you’re in and the goals you want to achieve via your sales operations. But regardless of your business or industry, there are a number of core metrics your sales reporting should include, namely:
Deals in the pipeline
Your sales rep has identified a prospect and is moving them along in the pipeline. But where in the pipeline are they, when is the deal expected to close, and what revenue will be generated for the business when it does? The ‘deals in the pipeline’ metric will identify each of these and provide information that can be used to make incoming revenue forecasts and reveal possible systemic weak points in the sales cycle.
What is a good conversion rate – ie the percentage of deals won vs the percentage lost – for your business? If it’s 10% and your sales team is struggling to get it above 5%, obviously something isn’t quite right. Maybe your target is too high or the tactics your sales executives are applying to reach the goal are deficient. Or the quality of their sales leads is poor. Measuring the percentage of times that a prospect has been turned into a customer will enable you to discover what’s working and what isn’t and make adjustments accordingly.
Revenue by sales representative
This is possibly the most fundamental indicator that is used by managers. Obviously you need to know which of your sales executives are performing well – and can be pretty much left alone to do their job – and which are struggling and in need of extra guidance or training. When the sales report relating to individual revenue includes detailed information on the rep’s sales generation activities, it can quickly become clear what the high performing sales execs are doing right and where under-performing reps are tripping themselves up.
Length of sales cycle
What is the average length of the sales cycle at your business, and why can some sales people close most of their deals within that period of time while others usually take a lot longer? The length of sales cycle metric can identify what sales tactics are working best when it comes to getting prospects across the line within a reasonable time-frame and, when this does not occur, where there are issues that need to be addressed in that rep’s sales cycle strategy. It may be revealed, for example, that the tactics that the fast-to-close sales executive use are fundamentally different to those routinely applied by the salesperson who has a track record of slow-to-close sales.
Sarah typically closes fewer deals per month than Jim, but somehow manages to generate more revenue per month for your business than him. Why? It is, of course, because Sarah’s deals are usually bigger than Jim’s and are making a bigger positive impact on your company’s bottom line. By tracking deal size as part of your regular sales reporting, you will gain an insight into how your sales representatives are performing when it comes to extracting the greatest value from customers. If cross‑selling and up-selling form part of your sales strategy, you will be able to know which of your sales reps are capitalising on additional sales opportunities and which are letting opportunities slide (probably without them even realising it).
Source of lead/customer
It’s the beginning of a new month and your sales team reports for the previous month are in. And sales are up – great news! Or they’re down … not so good. Whether it’s one or the other, you need to know where your prospects and your customers and coming from. By tracking the source of each customer – email campaign, print advertisement, cold call, etc – you will be able to pinpoint which of your sales and marketing strategies are proving most successful and which need to be discarded or modified.
When a prospective customer first contacts your business, there’s a good chance that they’ve made a similar enquiry to at least one of your competitors. There’s an obvious link between how quickly a salesperson responds to a lead and the likelihood that a sale will be made. On average, how quickly does one of your sales reps respond to an enquiry? Particularly if your business relies on inbound leads to generate sales, it’s important to track and closely monitor your sales team’s response times and speedily address whatever problems are preventing your sales executives from responding to enquiries within a reasonable time.
Whatever information you decide to include in your team’s sales reports, it’s important to never lose sight of the big picture. The sales cycle never really ends, and it’s up to the team leader to continually fine-tune it to deliver the maximum results. If your sales reporting strategy is closely aligned with your overall business growth strategy, you’re probably on the right track.
You will also be on the right track if your sales reporting includes a good balance of input measures and output measures. Input measures are things that sales reps can control, for example number of cold calls, follow-ups to enquiries, meetings with prospects, industry events attended etc. Because these are areas in which sales reps can exercise some control, they present the opportunity for improvement through extra coaching and training.
Output measures are the results of sales activities, eg number of sales, new prospects in the pipeline, profitability of recent deals, customer attrition and so on. These are critical areas to measure against targets but are less useful in providing a road map for individual performance improvement.
Once you have developed your sales reporting strategy and have applied it in the right way, you will certainly see, before too long, improved sales results. The insights you gain, and the actions you take in response to them, will help set your business up for long-term success.