subject: Sales Channel Metrics And Performance [print this page] Sales Channel Metrics And Performance Sales Channel Metrics And Performance
The construction of your sales cycle and the precise metrics that you use for your sales channel will eventually establish the rate at which your sales will grow. Determining which key performance indicators to use and the amount of time between measurements will have a sizable impact on the data collected and the resulting tactics.
Regardless of the KPI's that you prefer to use, the performance of your deals cycle should be periodically measured against a benchmark and monitored for change. With the help of these measures it becomes much easier to know just efficiently your channel is performing and whether there is a problem which if present can then be rectified at the earliest.
As you strive to improve the effectiveness of your deals channel, there are a few key indicators that should be monitored. As for instance, the overall efficiency, funnel value is an significant one. It refers to the potential value of the entire deal in a channel and in fact it also represents the value of future sales. Because it includes future values, the funnel value allows you to evaluate the long-term profit potential of a sales prospect or client.
When measuring the performance of a deals cycle, it would be ideal if every facet of the channel were tracked; in truth, sometimes it is not possible to assign each and every value. Often, to streamline the analysis, each deal in a deals funnel is evaluated individually. Score cards or ratings for each aspect of the deal can then be monitored and weighted based upon the probability that the deal will go through. This process is often made a bit more accurate merely by weighting activities close to the completion of the transaction more heavily that interactions near the beginning.
Arrival rate is another one of the important sales funnel metrics that need to be addressed. The arrival rate refers to the total deals that are in the channel during a particular period of time. This rate allows you to assess the rate at which prospects are acquired into the sales channel and subsequently converted. These numbers can then be made use of in order to estimate the amount of sales effort that is required and the figures can also be used to estimate the amount of cash flow required.
The conversion rate is another metric often associated with the deals funnel. The conversion rate evaluates the number of potential deals that have actually closed. This figure is used to gauge how successful a particular qualifying in process as well as deals process is. Perfect (hundred percent) conversion rates show that all deals that were qualified had been changed into real sales. This is of course an ideal situation but is mostly unachievable in real life.
Another key metric is the flow rate. This funnel metric is defined as the amount of time a typical deal remains in the sales funnel. Such a rate is quantifiable as both an average as well as a spread. To cite an example, it could reflect the minimum and also the maximum time spent by the deal in the channel.
When checking this particular rate, it is more than likely that you will be able to identify many a deal that have been stuck in the channel and such deals are known as stuck deals. Such deals ought to be taken out and dealt with individually.
