Brad Sugars wrote a post on his site, Entrepreneur, entitled 7 Simple Numbers That Will Grow Your Business. You can find the whole post here.
The 7 numbers he recommends are:
- The lifetime value of each customer,
- How much it costs to acquire a new customer,
- Conversion rates,
- Your average dollar sale,
- Response rates,
- Lead-to-sale ratio, and
- Touches to sale.
These are all marketing and sales numbers and tracking them is critical to success. You may debate some of them, but those that document steps in your sales cycle are incredibly valuable. They are your sales formula, or sales recipe.
If you get all your sales people doing all these steps each week in sufficient numbers to lead to your financial goals, there is no reason you won’t reach your goals every quarter.
Companies running their businesses on EOS recognize one of our key tools which gets this done for you. It’s called the scorecard. Every department has an activity based scorecard which tracks the path to success for that department. I wrote an earlier post which provides some more detail on the EOS scorecard tool; you can find it here. The sales department scorecard is the most direct path to revenue achievement for any company.
There are great CRM tools out there that can help you do this, like Saleforce and Sugar, but we advocate starting with a simple spreadsheet which documents:
- What the activity is,
- What the weekly goal for the activity is,
- Who owns the activity, and
- 13 columns for the quarter.
The sales manager tracks these goals for each sales rep and aggregates them and shares one or two of them on the executive team’s scorecard. The one or two she selects typically have proven over time to have a high correlation with sales success measured in purchase orders.
Do you agree with Brad Sugars’ numbers? Do you have others you prefer and use? What is your sales recipe? Will you share it with us?
Photo credit: Martin Pettitt