The basic numbers

By January 19, 2016Metrics

Sometimes, because the fundamental, obvious stuff is so fundamental and obvious, we as sales manages lose sight of it. One example of this is analyzing, thinking about – DEEPLY thinking about – and discussing Close Rate, Sales Cycle Time and volume of opportunity in the Sales Funnel.

Take some sample data. With the exception of “Expected Sales” which is calculated, all the numbers are based on historical performance.

funnelIn case you haven’t thought about this for a while, here’s the calculation using Rep A as an example. He closes 59% of his deals, so 59% of the $288,870 in the funnel = $170,433. Hold that number… It takes 72 days on average to close a deal, so he turns his funnel over 365 / 72 = 5 times per year. In other words, if he maintains $288K worth of opportunity throughout the year, he’ll likely close 5 X $170,433 = $858,354.

Got it? (If not, think through the logic until it makes perfect sense. It does make perfect sense!)

The next step is to compare and contrast. Let’s look at Rep A vs. Rep C. What if C could learn a trick or two from A and knock a few days off that sell cycle? Reduce it by a week and C’s expected revenue leaps up to $1,126K.

What if A could learn a trick or two from C and get more deals into the pipeline? Just another $58K in the funnel gets our friend A up to the million dollar mark.

And how hard is it to think of 30 or 40 more questions? And what kind of discussion might ensue from a team meeting kicking around those questions and answers and insights?

Fundamental and obvious stuff? Yep. Have you done it lately?

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