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HOME » NEWSLETTER & ARTICLES » NEWSLETTERS & ARTICLES ARCHIVE » How Can You Tell When Your Sales Are Poised to Rebound? June 2009
How Can You Tell When Your Sales Are Poised to Rebound?
Business Indicators and Sales Metrics
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Bill McCormick
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One of the training associations that I belong to recently sent out the following announcement for their upcoming monthly meeting: “Due to too few signups, the session titled ‘how to do business in today’s economy’ has been cancelled.” I can’t think of a better example that illustrates the current state of the economy.
For sales professionals, it is easy to get discouraged in today's business environment. When you need to work harder to make a sale, it is difficult to sustain the extra level of effort without seeing some positive results. How can you tell when sales are poised to rebound? Here are some business indicators that salespeople can use to gauge that the economy is improving and that customers are about to increase their level of purchases. Here are four examples:
1. How many genuine prospects do you have to contact to win one new customer? For simplicity, we call this your win ratio. In a normal economy, a typical win ratio ranges from 3:1 to 5:1, depending on the type of product/service that you sell. When the economy slowed down, win ratios worsened. If you aren’t already tracking your win ratio, you should start doing this. When the ratio improves, it generally means that the economy is improving.
2. How long is your sales cycle to win a new piece of business? When the economy worsened, the duration of the sales cycle worsened by a factor of 2x or more. When you see the sales cycle accelerate to a more normal duration period, it means that customers are feeling more confident.
3. Are customers paying on time? Salespeople have told us over the last few months that it has become increasingly common for their current customers to delay the payment of invoices. When this turns around, it usually means that customers are in a better cash flow situation, and that more money should be available for additional purchases.
4. How many new leads are contacting you? Two common examples:
-number of leads/attendees at trade shows
-new customers who find you by searching on the web.
STAR has seen an increase in Q2 in the number of new customers who are searching for sales training, which is an early indicator that these customers are feeling better about the economy. When the number of unsolicited leads starts to increase for your business, it is a good sign.
Where Do You Go From Here?
You can track some or all of the metrics listed above by yourself. If you would like some assistance, STAR can help you in two ways. First, our Sales Prospecting and Business Development workshop can teach your entire sales team how to measure key sales ratios and the skills to win new business more effectively. Second, we can work with individual salespeople through STAR’s 1-on-1 sales coaching and help you personally to design a tracking program that fits your sales environment.
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