17 CHAPTER 1 METRICS AND PERFORMANCE MEASUREMENTS Sales metrics 01 Sales funnel To gain better insight into the effectiveness of the Sales & Marketing team, a sales funnel can provide a high-level overview of what is working well and which parts need improvement, based on each stage of the sales process. Prospects Marketing Qualified Lead (MQL) Sales Qualified Lead (SQL) Closed deals From the first point of customer contact to the signing of the contract, there are various instances during the sales process when a potential customer may churn. Tracking these metrics will show where and why this may happen, allowing management to take appropriate action to fix this "leaky" sales funnel. Sales funnel refers to the percentage and number of leads that through each stage of the funnel from start to finish. An example of a sales funnel 1. Lead: Potential customer that heard of your product - either via inbound (e.g. SEO) or outbound (e.g. marketing team outreach) approaches. 2. MQL (marketing qualified lead): A prospect that your marketing team deems more likely to eventually turn into a sale than other leads, but isn’t quite ready to buy yet — require additional marketing assistance before they’re ready to receive a sales call. 3. SQL (sales qualified lead): A prospective customer that has progressed past the initial engagement stage, has been thoroughly analyzed by both marketing and sales, and is deemed ready for the next stage in the sales process — a direct sales push. 4. Closed deals: Sales & Marketing team successfully got the prospect to sign the contract. Metric Description Formula Lead generation Lead Generation by Source means showing the period’s by source lead by different channels including, but not limited to, n.a. inbound, website, sales-led, advertising etc. Conversion rate Conversion Rate measures how many of your leads are # of customers moving to the next stage. in current stage Low conversion rate — leaky spots in your pipeline where leads might be dripping out. # of customers High conversion rate — your sales process is working and in first stage you’re moving prospects through effectively. Win rate Win rate refers to percentage of leads that have resulted # of wins in a close. # of leads Attainment Attainment measures actual sales success to forecasts # of actual sales made at the beginning of the period across sales reports. # of forecasted sales