Loading...

Key Sales Metrics And KPIs for Managing A Forecast

By Analytix Editorial Team

November 27, 2014 0 Comments

Why should you pay attention to sales metrics? Sales metrics are indispensable to performance, as well as when carrying out forecasting. Metrics provide the necessary analysis needed to ensure your team is on the right track and performing as intended. Metrics and Key Performance Indicators (KPIs) are also needed to evaluate revenue forecasts.

Here are some key sales metrics, and the ways in which they can influence your revenue forecast:

  1. Total leads generated by your business

By itself, this metric is self-explanatory; how do you determine the range of tools that measure the leads your business is generating? There are several tools that help you determine the opportunities generated by your business. These include:

  • Subscribers to your blog/blogs
  • Visitors to your website, measured through clicks and other analytics
  • Respondents to an advertisement or promotional material
  • Number of sign-ups and registrations, etc. at events like exhibitions or virtual events, such as webinars, etc.

How does this particular metric help?

The higher the number of sources, the more accurate your assessment of the leads your business is generating. This can indicate whether your current lead-generating activities are adequate or whether you need to invest into more or diverse ones.

  1. Ratio of leads to sales qualified leads

There are two kinds of leads: potential ones and those that show no promise of converting to a sale. Understanding this ratio can help you channelize your resources appropriately. Once you can determine how many leads are promising or sure to convert to a sale, you can focus on them. To calculate leads to sales qualified leads:

  • Determine the number of leads across a time period
  • Determine the number of qualified leads across the same time period as above
  • Divide qualified leads by number of leads
  • Now multiply this figure by 100 to get the percentage

How does this particular metric help?

This analysis helps you determine which of your lead generation methods are actually working and whether they are bringing the intended audience or clients to your business or not. It will also guide you as to whether your marketing efforts are channelized well or not.

This also helps in forecasting by way of pointing at the total leads needed to ensure your sales momentum is maintained. Further, you will also know how many total leads you need to get a certain percentage of qualified sales leads.

  1. Ratio of quote to close

This ratio measures the number of quotes that turned into actual sales. It helps you determine the effect of different variables, such as prices, value, etc., on the sales of your product/services. To determine this ratio:

  • Take the number of quotes you created across a certain time period
  • Take the number of actual sales from the same time period
  • Divide the number of actual sales by number of quotes and multiply by 100 to get the percentage figure

How does this particular metric help?

This metric indicates whether your efforts of converting prospects are working within the stipulated timelines or not. It can give you an idea of whether to increase the speed or allow it to remain as is. Further, it can help you determine whether your quote contains the right elements in terms of price, value for money, etc. These are important in determining whether a lead will convert or not. For example, if the price is too high, it can prohibit sales. On the other hand, if it is too low, you may be seen as supplier of cheap products/services.

Overall influence of metrics and KPIs on forecasting

All of these metrics help you manage your forecasts better through accurately determining the efficiency of your sales process. In their different ways, they measure different aspects of the sale and review how effective your efforts are proving to be.

The professionals at Analytix Solutions have helped businesses like yours in goal setting and performance measurement profitably. Call us at 781.503.9002 or send us an email at sales@analytix.com and we will contact you with solutions customized to your business.

Post Your comment

Free Analysis

Free Analysis Request

×



    Resources
    Analytix © 2005-2022. All Rights Reserved.
    Share This