News flash: guesswork has no place in your sales strategy.
If you're not using accurate, actionable data to guide you to your target numbers, you're setting your team up for a whole lot of unnecessary problems. Go too high, and you're at risk of asking your team to work toward unrealistic goals — a surefire way to kill energy and engagement. Go too low, and you're missing huge revenue opportunities that could be well within reach, and you're not driving your reps to hit their full potential.
Most importantly: relying on guesstimates may seem like the easiest, fastest way to set a quota — but it's actually the hardest, most stressful path you can take. Without data to back you up, you have no idea what's possible and what's not, or which levers to pull when you're getting off track.
Not knowing is not fun — and if that's how you're doing it: chin up! We've got a better way.
A common sales quota that sales teams track is “meetings set” (or “demos booked”). So in this post, we'll show you how to set and track sales activities that lead to meetings that lead to deals, and how to leverage quality or efficiency metrics to see what's working and what isn’t.
For purposes of this illustration: we'll say your overall target is 100 closed deals this month. How many meetings will it take to get there? Let's break it down.
KPI 1: The objective
To identify your target objective of "meetings set," you’ll want to start with the number of deals you need to close and your ratio of meetings-to-deals closed.
Let's play it out: Let’s say 10% of all meetings held end up as closed deals. This means you need to hold 1,000 meetings this month to get you to our target of 100 closed deals this month. (You could also focus on improving your "meetings set to closed: won ratio," but that's for another topic for another day!) How many of your set meetings actually end up being held? Maybe it's 80%. So you need to set 1,250 meetings to make sure 1,000 are held to make sure you close 100 deals this month. (Who said math wasn't fun?)
Metrics to track:
- meetings set
- meetings held
- closed won deals
- ratio of meetings held to deals closed
- ratio of meetings set to meetings held
KPI 2: The activity
Now that you know how many meetings you're gunning for, it’s time to use some similar math to determine how many dials, emails, and LinkedIn Connections you need to make before you’re able to hit the target.
Let's play it out: If you know that every 25 connects lands a meeting, and every 50 calls lands a connect, you would need 62,500 calls to get 31,250 connects in a month to book 1,250 meetings — and as we saw above, that's the magic number that will get you to 1,000 meetings and ultimately land 100 closed: won deals. If we take it a step further, we can pull out our calendars and see that there are 20 working days in June, so to get all those calls in, your department needs to make 3,125 each day. If you have 25 reps, that's 125 calls per rep per day! You can even go so far as to break it down hourly to know that to hit their goal of 125 calls per day, the reps need to hit 16 calls per hour. Good-bye, guesswork!
Metrics to track:
- Calls to connects ratio
The "Magic" Formula
Use the highlighted ratio metrics of historical performance to determine future goals and projections, as seen here in this sample data.
(full downloadable template here)
Have questions about tracking becoming a metric-driven team? Connect with us on LinkedIn! We’d love to talk more.