SO, YOU’VE GOT A SALES TEAM… NOW WHAT?
But things aren’t quite going according to plan. Reps aren’t hitting their goals, or maybe you’d like to increase their goals but you know they’d miss if you did. What do you do?
First, Track the Basic Sales Funnel
First, track three simple metrics:
- Discoveries per week. How many introductory meetings is each rep holding with qualified prospects? You may prefer to track ‘demos’ instead. Whatever the most important ‘meetings’ metric is, put that on a dashboard and track it daily.
- Pipeline creation. Decide on a qualification standard (BANT, ANUM, MEDDIC, IDGAF, FOMO, whatever acronym you prefer…), and track how many meetings turn into sales-accepted opportunities. 50-80% of meetings converting to pipeline is the benchmark, depending on where those meetings are coming from.
- Closed revenue. Or bookings. Or ARR. Or however makes the most sense for your company.
Let’s do an example. Let’s say your product’s average deal size is $25k ARR. If the quota your reps need to hit is $45k ARR per month, and they convert 30% of pipeline into ARR, and 65% of discoveries turn into Opportunities, then:
- To hit $45k ARR, they need to each generate $150k of pipeline per month
- To generate $150k of pipeline per month, they need to hold 9.23 good discovery meetings per month. Round that up to 10 for good measure, and add 1-2 as a cushion 🙂
If you convert 2% of cold prospects into discovery meetings, then to hit 9-12 meetings per month, each AE will need to be contacting 450-600 people per month.
You may instead prefer (as I do) to hire SDRs, invest in marketing, spin up PR, and get other forms of demand generation going, and to then increase AE quotas. That way, they’re holding more meetings but doing less prospecting. Either way, the equation is the same.
Then, Dashboard It
Build a dashboard, in Salesforce or otherwise, that updates in real time based on the activities and deals being logged in your CRM. Set it up as follows:
- COLORS! For each metric, color code so that a result of 80% of goal = Red, 100% of goal = Yellow, and 120% of goal = green. That way, it’s easy to see how reps are doing: all green/yellow means it’s okay, red/yellow means they need work, and all green means they’re killing it, and you should buy them a coffee or a beer and praise them publicly.
- Actually look at it. Check the dashboard daily (but not 12x/day, don’t be a dashboard junkie), and monitor results that seem deeply different from what should be happening.
For example, if meetings are Red, pipeline is Yellow, and revenue is Green, what does that mean?
Your AE has been doing well recently, but is not set up for success next month, since the pipeline is drying up.
Each module should look something like this:
(The typical deal ARR here was in the $6-10k range.)
If metrics are “in the red”, you know to take a deeper look at those.
Once everything is green/yellow consistently, you know you can scale, and it’s a matter of expanding your team and growing!