Most would argue that a no-growth sales performance would indicate that the sales team isn’t doing a very good job. Let me explain a bit about some metrics that might be of interest to you. The question boils down to how you generate leads and your performance in closing those leads.
One of our Sales Summits members is VP of sales of a “download, try and buy” software company. They had a 20% growth plan for 2014 and it looks like sales will be flat, up only a point or two from 2013. The company’s marketing efforts are all done to drive people to their website and convince them to download the software for 30-days and try it. (FYI – average sale here is about $3,000) In this scenario “downloads” are the same as leads as 95%+ of purchasers buy this way, even existing customers. The problem is that the number of downloads is down almost 33% since last year for a variety of reasons – stale product, cuts in marketing and SEO budget, etc.
Sitting with the VP of Sales we made the following calculations (numbers are rounded for simplicity):
Presenting this to the CEO and board we made the following observations about the sales team:
- We became much more efficient and closed 40% of the “leads” versus a close rate of 30% last year.
- We were able to grow our revenue per sale by more than 50% by
- More cross-selling
- More up-selling
- Better negotiation
The message is simple. If sales are flat look hard at the metrics that might not be accustomed to.