How do I know if I’m on track? Understanding your B2B Sales Goals and Metrics
One of the big mistakes that founders make when they first start selling, is that they focus on the sales number they need to achieve, but not the activity they need to do to get there. So what should you be looking at and what do you need to keep track of to ensure you hit your sales goals?
Knowing what to measure
When you are starting out, trying to get too clever with your metrics can be a bit confusing. I always suggest you start by measuring three key things:
Leads
Qualified Opportunities
Sales
As your business develops, you can get more nuanced and sophisticated with this. But when you are starting out - keep it simple.
Defining the Measures
The next thing that you need to do is be clear on what the definition of each stage is for your business. For example:
A Lead is:
someone who has downloaded a free resource
a person I met at a networking event who showed interest
someone who booked a discovery meeting.
You decide what you want the criteria to be. For some of you, you may only consider it a real lead if they book a discovery call with you. For others, downloading a key resource may show they are super interested and someone you should reach out to.
A Qualified Opportunity means that:
I have completed a discovery call, and they have passed my qualification criteria.
For this to make sense, of course, you need to know what your qualification criteria are. These should be the things you need to know, to be clear that you want to work with them – such as if they have enough money to pay for your services.
A Sale is:
a signed agreement
a deposit received.
There are, of course, more steps in the sales process, but this is a good place to start for basic metrics.
The 3 to 1 Rule
So now we have some basic things to measure. So what should our numbers look like?
I like to start with the three-to-one rule. Every business will end up with its own metrics, but you need a place to start. I find the three-to-one rule is a good benchmark.
The three-to-one rule is simply:
For every three leads, you hope to get one qualified opportunity.
For every three qualified opportunities, you hope to close one sale.
So, for each sale you hope to close, you need at least nine leads.
Remember, this is based on a direct sales B2B model where you are selling something worth several thousand $ - hopefully up to very large $ per deal – not a mass volume marketing model. If you are planning to sell something worth $10 to a 1000’s of businesses the metrics would be different.
Not just about measuring leads
Where a lot of founders go wrong when they are starting out, is they just measure leads and sales. You need to at least start measuring how many of those leads become real opportunities, and then from there measure sales.
You might find that you need more leads at the top of the funnel when you are starting. This will be because when you are new at it – you still are refining your offering and how to best sell it. Once you get better at that, the metrics will get better.
Getting the leads
So you might be thinking; that’s all good – but how do I get the leads?
Filling the leads at the top of the funnel will likely take a mix of marketing and direct outreach.
There are a plethora of ways you can approach this – including content and inbound lead generation strategies and partnership models.
The way you approach your lead generation will change how you approach your numbers at the very top of the funnel. But once you know how many leads you need, and you have a clear picture of what a good lead looks like, you can focus your efforts on hitting that number.
Building out your Model
Once you get started on the basics, you can start to refine and build out your sales model. Focus on the basics first and you’ll start to see where you want to next focus your energy.
As founders our energy is one of our most precious resources – use it wisely.
Want to keep learning?
Join the free webinar
How Many Opps do I Need?
Understanding B2B Goals and Metrics
