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A good sales manager understands the value of different types of sales reports. Reports can help your sales reps deepen their knowledge of how prospects can best make use of your product along with their ability to come up with a customized plan to help prospects reach their goals. After all, these are the primary reasons prospects need the help of sales reps in the first place.
But knowledge of prospects and your own product isn’t enough for your team to find success and achieve sales goals. It's just as important to be able to read and analyze sales data, so you understand the factors affecting your team’s performance. This can help fine-tune your sales process or fill in gaps in knowledge if there are any.
Before you can read the data and judge performances, however, you must be sure you have the right data. One of the biggest problems among salespeople is that 46% don't use any dedicated technology to track lead and customer data. How can you track the right data if you don't even have the tools to produce accurate reports? Without a reliable database of basic information to draw from, sales managers can't effectively analyze their team's performance or identify areas for improvement.
Find out 9 essential sales reports all sales managers need to use.
1. Revenue by Salesperson
This first report examines how much revenue each salesperson has generated, typically on a monthly basis. It's one of the most common sales metrics that's of great interest to both sales reps and managers. Both parties are always keen to know, how much have I sold?
It's one of the most basic performance indicators used by managers. If an employee scores well based on this metric, it's likely they're doing just fine. Anybody who doesn't fare so well may be dragging sales down. This isn't a perfect measurement by any means. Sometimes low revenue numbers could be due to a number of deals not closing until early next month. In many cases, however, this report gives managers a quick glimpse into how a salesperson is doing.
As for employees, they could be interested in checking their progress as it relates to their quota, sales goals, and company average or even within the context of friendly competition against other salespeople.
These types of reports can also be used to evaluate your team as a unit or even the company as a whole. Analyzing the data month after month could also give you an idea of how trends affect sales and whether or not your team has improved or declined over time.
2. Conversion Rate
This means the percentage of deals won against the percentage of deals lost. Conversion rate, also known as win-loss rate, offers a more informed analysis than revenue totals because in many cases it can show you why revenue has gone up or down.
Basic revenue reports only give you a small piece of the puzzle. They can tell you exactly how much revenue has increased or decreased but provides no context to explain why. Increased revenue could be the result of factors such as advertising cycles, marked up prices and high amounts of upselling, among other things.
What conversion rates tell you are exactly how much of a month's sales can be attributed to your sales team. If revenue stayed at the same level, but your win rate increased during the same time frame, it indicates your team did a better job that month converting leads into customers. On the flip side, if your win rate has gone down you can insinuate performance among team members is down or you might have bad leads.
Similar to revenue reports, conversion rates can be generated for individuals, your team and the company as a whole. If you notice a particular team member consistently delivers high win rates, it's a good bet they're doing well.
3. Loss Rate by Sales Phase
This means the percentage of deals lost during each phase of the sales cycle. Conversion rate paints a good overall picture of your team's performance, but you can also analyze the finer details of what seems to be happening during every step of a sales cycle.
This is what loss rate by sales phase attempts to show by displaying exactly when deals are getting lost. It could be used to identify any potential weak spots in your sales cycle.
Let's say your team seems to be losing a lot of deals after the sales presentation is made. It gives you a reason to evaluate a team's sales pitch or even a particular salesperson's delivery. Steps can then be taken to improve upon it.
Find any weaknesses in your sales process or an individual's performance and work on making them strengths through pipeline scrutiny or coaching. Try to raise the bar for everybody on your team.
4. Average Sales Cycle Length
This means how long it takes to close a sale, from the start of a sales cycle to the very end. It's sometimes referred to as the closing speed and is one of the simplest and most essential sales metrics used by sales managers.
First, you must create a timeframe for comparison. How long it takes to make a sale on average is key to analyzing this metric. If you know it takes so many days to complete a sales cycle, you also have an idea of when you should be scheduling a presentation, sending along a quote or moving to close, among other things.
Average sales cycle length can also help you decide what to do in terms of managing your pipeline. If you find an opportunity has gone cold or if a deal seems as though it will go beyond the average length, you can inform the salesperson responsible it may be time to change tactics or pursue additional efforts such as discounts.
The metric is also used as a baseline for individual sales employees. If you find one of them tends to take longer than the average, you can help them identify weaknesses and areas of improvement. On the other hand, if somebody constantly closes deals quickly, you can find out what makes them successful and share their methods with the rest of the team.
5. Response Time
This means the time between a customer's inquiry and a salesperson's response. It's most often measured after initial contact, but can also be measured at any point during a sales cycle.
Companies that rely on inbound leads value this metric very much. Industries such as software development, real estate, event planning and hospitality can succeed or fail based on response time.
Catching a lead moments after discovering your website or contact information can make all the difference, which makes tracking this time gap is crucial for sales managers. By monitoring the speed at which your team responds to leads, you can identify and eliminate any roadblocks.
6. Total Lifetime Value of a Customer
This means the total amount purchased by a customer over the lifetime of your relationship.
It's a small part of the overall picture, but as a salesperson, you want to know the average value of a deal. In this case, it may indicate how much effort it's worth investing in trying to make a sale with the average customer.
This takes into account any future purchases they might make. If you get a handle on the total lifetime value of a customer, you can understand how much time you should be spending on new customers.
7. Churned Customers
This looks at trends with regards to churned customers. Figuring out the reason a customer bailed out on a sales cycle can be more revealing than analyzing why deals were lost.
A churned customer is a clear indication there was a major malfunction somewhere in the sales process. Sales managers who monitor trends when it comes to churned customers can identify bad patterns in the sales process and address them.
8. Contacts Report
This is a general report of all the contacts in your database. A salesperson's contacts are their most valuable asset. They're your potential customers and your network to finding more leads.
Contacts reports give you an overall view of the contacts in your database along with detailed information such as pipeline stage, industry and date of the last contact. It can help you discover opportunities, find networking connections and pinpoint weak spots in your funnel.
9. Lead Aging
This tracks the latest activity for each lead. It can tell you if any leads have been ignored. The longer a lead goes without being worked, the probability of failing a conversion goes up.
Sales managers should not stand for this. Lead aging can give you a heads up about which sales employees need to improve their follow-up game and fast. It could make a huge difference with it comes to conversion rate opportunities.
The Bottom Line
Many different sales reports and metrics are available for sales managers to monitor and analyze, but only a small handful of them truly matter.
By learning which ones you should pay most attention to, you can quickly turnaround dropping sales figures and help fledgling and struggling sales employees. Give yourself enough time to follow the metrics above, and you could boost revenue now and in the future.