June 27, 2017
Tracking Sales from Lead to Close: CRM Metrics That Matter
Did you know that, without landmarks or visual cues, humans tend to walk in circles. That’s right, people need reference points to walk in a straight line from point A to point B.
Without defining and measuring customer relationship management (CRM) metrics — your business reference points — you might find yourself walking in circles or lost deep in the data woods without a clear path out.
Whether you’re just getting started with CRM or you’ve tracked every lead since day one, it’s always beneficial to pause and look around to assess your location. Then, you can adjust and forge ahead with confidence.
Here’s a look at five CRM metrics that matter.
Two simple metrics to track are sales calls and emails. How many outreach calls is your sales team making on a daily, monthly, and quarterly basis? How many emails are they sending?
Are leads moving down the sales funnel with more frequency after a call or after an email? Maybe there’s an optimal combination of the two? By tracking your sales activities, you can uncover trends that allow you to tweak your outreach approach to best nurture your leads.
While traditional outreach activities like those above are effective reference points to start with, it’s also important to track where else your leads find your company. For example, one lead may discover your blog through an online search or hear about your services through a family member. Another may follow your business on Facebook or LinkedIn.
By tracking lead sources on a monthly basis, you’ll know where to invest your resources to have the biggest impact.
Do you know how many of your leads became customers last year? What about last quarter? Or last month? Your conversion rate are crucial to keep on top of. When you know your team’s typical conversion rate per sales cycle, you can determine a predictable sales model and grow your team according to your sales projections.
Average sales cycle length
Now that you know your conversion rate, it’s time to look at how long your typical conversion takes. This is a big one! The best CRM tracks not only your first interaction with a lead, but their entire history with your company including emails, sales calls, meetings, and more.
Once you know the length of your average customer journey, you can make smarter sales predictions and implement methods to shorten the time to close a new deal. If you want to shorten your sales cycle, a CRM helps you do that with email templates, reminders, and automated workflows.
Customer retention rate
Are you keeping an eye on how many customers stick around — and how many never return after that first sale? Once a lead becomes a customer, it’s your job to keep them happy so they continue working with you.
The happier your customers, the more profits you’ll enjoy, too, according to research by Fred Reichheld of Bain & Company. In fact, all it takes is a 5% increase in customer retention to see a 25% boost in profit.
Take a look at your CRM reports over any given time period to see how many customers you’ve gained and how many you’ve lost. Any change to your retention rate is an indicator of how well your business is providing value to your customers.
These five metrics provide reference points that keep your sales activities moving in the right direction. What other CRM metrics do you track? Leave us a comment below.