How to Effectively Use Benchmarking Statistics to Evaluate the Sales Process Throughout the Pipeline

THE CUSTOMER JOURNEY: BEFORE IT BEGINS

Focus on engagement through social media and mobile. New business is happening on smartphones and tablets, which are increasingly responsible for a larger portion of the time spent online.

The growth of marketers who view social media marketing as a critical factor for product or service development (from 25% in 2014 to 64% in 2015) proves that it works. Invest more resources to leverage social channels.

Aberdeen research shows that companies using marketing automation see 53% higher conversion rates (from first contact to MQL) and 3.1% higher annual revenue growth compared to companies that do not use automation.

Over the last decade, digital tools and channels have evolved at a rocket pace. It has affected every industry, and it is no exaggeration to say that customers now rule, with speed being the new currency in business. With an ever-growing list of responsibilities and tactics to test, marketers need to stay laser-focused on metrics that impact both revenue and customer satisfaction.

Statistics:

• 13-22% of MQLs are ultimately converted into qualified sales leads.
• 30% of marketers claim customer satisfaction is one of their most important metrics.
• Customer retention is one of the top 5 digital metrics for modern marketers.
• 70% of the buying process is now completed by the time a prospect is ready to engage in sales.

Tip: Another reason to invest in marketing automation is lead scoring. These tools assign points to specific criteria, including demographic factors and other parameters aligned with the company’s target market or ideal customer profile. When leads are objectively scored to indicate when they are ready for sales, marketing can pass more qualified leads to sales. By eliminating low-quality leads, sales efficiency increases. For instance, recent studies show that a 10% increase in lead quality results in a 40% increase in sales productivity.

BUILDING A PIPELINE: KEY METRICS TO CONSIDER

Insightful Takeaways:

Quick response time can significantly boost your sales team’s efficiency.

Automating key sales processes and utilizing data science will pay off, enabling sales reps to respond swiftly and effectively to inquiries.

Companies that have automated lead management report a 10% revenue increase within 6-9 months.

In today’s competitive sales environment, it’s critical to pay close attention to all sales metrics. However, not all organizations track the number of calls, emails, response times, and other sales rep actions. With this data, companies could achieve greater success in building their sales pipeline and achieving their goals. Here are the stats every sales professional must know to increase response and conversion rates.

Statistics:

• Top-performing telemarketers are those who make 15 significant calls for every 100 outbound actions.
• The average sales development rep makes 52 calls per day.
• Reaching out to a prospect at least 6 times can increase the contact rate by 138%.

Tip: Contact a prospect within one hour of their initial inquiry. Companies that respond within an hour of an inquiry are seven times more likely to qualify the lead compared to those that wait even one hour longer. Firms that wait a full 24 hours before contacting a lead have 60 times lower chances of qualifying it than those who respond within the first hour.

METRICS TO FOCUS ON IN THE EARLY STAGES

At the early stages of the sales process, if you want to succeed, you need to measure the activities of your reps within specific time frames. Pay attention not only to the volume of activities undertaken to generate opportunities, but also whether those activities effectively lead to closed deals.

Statistics:

• 44% of sales reps give up after one follow-up call.
• 65% of a rep’s time is spent on activities that don’t directly generate new sales.
• Only 2% of sales happen during the first meeting.

Tip: Monitor and reward sales reps for their early-stage pipeline actions to ensure a healthy, long-term flow of deals and predictable revenue. The most critical factors at early stages are speed of contact, opportunity qualification, estimating the buying cycle, and planning the right sales strategy.

PUSHING DEALS THROUGH THE SALES FUNNEL

Carefully monitor your sales cycle and funnel conversion. Compare your numbers with market averages. Historical trends in your company’s pipeline will help you identify and eliminate bottlenecks, as well as provide data for well-informed, timely decisions.

Once you understand how effective and efficient your reps are at creating a pipeline in the early stages of the sales process, it’s time to convert that pipeline, which means identifying buying behaviors while understanding which opportunities should be prioritized.

Statistics:

• The average sales cycle has lengthened by 22% over the last 5 years due to a higher number of decision-makers involved in the purchasing process.
• The likelihood of closing a sale at the “presentation” stage is under 30%. At this stage, only 10% of SQLs reach the sales presentation.

Tip: To optimize your team’s performance and increase wins, you need to know where your reps struggle with converting opportunities to the next stage. Analyzing your sales pipeline by stages shows exactly where the leaks are, allowing you to pinpoint areas where your sales reps need to improve.

MAINTAINING A HEALTHY SALES FUNNEL

Encourage your sales reps to keep their pipeline clean and accurate. Increased data accuracy is crucial for building accurate sales forecasts and making better business decisions.

Furthermore, a more transparent pipeline will help increase conversion rates and generate higher revenues.

A deeper look into the pipeline reveals how it’s evolved over time, whether it’s growing in line with increasing revenue targets, and how much revenue can be expected from it. A shrinking pipeline must be evaluated quickly, and this can only happen when net opportunity flow is tracked accurately.

Statistics:

• Only 46% of reps believe their pipeline accurately reflects future business.
• 80% of reps feel they handle opportunity qualification well.
• The average pipeline lag time is 21%.
• 51% of forecasted deals are not closed.
• Companies that effectively manage their pipeline grow their revenues 15% faster than those who don’t.

Tip: Use dynamic processes in your CRM to help sales reps maintain clean pipelines. Automated processes guide users through each step, alert them about overdue tasks, and notify them of any information needed at each stage.

LEARNING FROM RESULTS: SALES PERFORMANCE METRICS

Analyze the buying cycle of your acquired customers to deeply understand their journey, key touchpoints, and the main reasons they decided to do business with you.

Analyze your churn rate and identify which sales cycle best correlates with high customer satisfaction.

By this stage of the sales process, you should be measuring your reps’ activity, building and analyzing their sales pipeline based on historical data, and tracking how the pipeline has changed over time. Based on this information and other analyses, you can evaluate your strategy.

Statistics:

• Lost sales productivity and wasted marketing budgets cost companies at least $1 trillion annually.
• Sales teams that held at least 3 hours of meetings per month saw a revenue increase of over 11%.
• Sales teams that implement best practices in their organizations achieve nearly 90% quota attainment—almost double that of organizations that neglect best practices.

Tip: Share the insights gained during the sales process with your marketing team. This will help them leverage these insights to improve their campaigns, messaging, and resources. Better alignment between sales and marketing will help you achieve your revenue goals. Recent studies show that aligned organizations achieve an average of 32% annual revenue growth.

CLIENT RETENTION IS AN ART THAT PAYS OFF

Take a proactive approach to customer service. Instead of waiting for problems to arise, a company that implements anticipatory service can eliminate issues before they even occur.

Implement a relationship-based marketing strategy. Use marketing automation tools to deliver personalized messages and maintain strong post-sale relationships with customers.

There’s a saying that the key to customer retention is being willing to spend just as much to keep them as you did to acquire them. A successful transaction isn’t the end of the story, but the beginning. Customer retention, repeat sales, and referrals are the holy grails of every business. Effective customer retention starts from the first point of contact and lasts throughout the entire relationship.

Statistics:

• A 2% increase in customer retention has the same effect as a 10% reduction in costs.
• Reducing churn by 5% can increase profitability by 25%.
• 40% to 62% of customers switch brands if they are dissatisfied with customer service, even if they are happy with the product.

Tip: 88% of customers will not make a repeat purchase from a company that ignored their complaints or feedback on social media. Treating customer service as a core element of business strategy might seem like a no-brainer, but it’s not always implemented. Treating CRM as the foundation for business growth and strategy can potentially increase retention rates to 90%.

OPTIMIZING THE PROCESS BASED ON SALES MATHEMATICS

Why effective sales processes matter:

• 53% increase in forecasted deal wins.
• 65% increase in the number of reps hitting their quotas.
• 88% increase in the number of companies achieving booking goals.

The sales process consists of steps that sales reps must take to sell a product and should mirror the customer journey. This will help identify the actions reps need to take to move opportunities from one stage to the next. Therefore, it’s crucial to create and formalize a sales process while providing reps with clear understanding of all steps involved, so they can determine what actions to take to effectively close a deal.

Creating a formal sales process means having clearly defined stages and milestones that are understood by all sales reps. Your sales team shouldn’t have to guess at what stage a particular deal is in or how to manage opportunities at each stage.

Statistics:

• Win rates exceed 50% for 2/3 of companies that have a defined sales process.
• Companies with a well-defined sales process have a 33% higher chance of achieving top performance.
• Companies with a formal sales process see 18% higher revenues than those with an informal one.

Tip: To introduce gradual changes in the sales process, it’s necessary to analyze and understand the key factors. Use sales metrics as a foundation to create a dynamic and flexible sales process that will help improve performance and achieve sales goals.

SUMMARY

With over a trillion dollars spent annually on sales teams, maximizing sales efficiency is a key goal for every business. While all sales organizations are different, it is always important to measure KPI metrics and performance at every stage of the sales process.

Sales is a numbers game. Having benchmarks to measure performance helps companies be better prepared to operate in today’s sales environment. Additionally, a process-based sales automation tool can help manage sales metrics to achieve higher win rates that every company strives for.

There is no magic or quick method to improve sales metrics—it requires careful analysis and understanding of key factors. Tracking the metrics described in this ARTICLE will help you create a dynamic and flexible sales process, allowing you to improve your results and achieve your sales goals.