Track the Most Important Metrics
Learning Objectives
After completing this module, you’ll be able to:
- Explain the importance of monitoring, measuring, and developing sales pipeline.
- Articulate why transparency is critical to success.
Introduction
Now that you’ve carved territories for your sales team, it’s up to you as a sales leader to make sure your reps are delivering every single quarter. There are multiple things you can track, so just focus on the most important. In this unit, you learn about which metrics sales leaders at Salesforce use to succeed.
“To sell successfully you need a lot of things, but most importantly you need pipeline—and there’s never enough pipeline.”
—Patrick Blair, former CRO Quip, Salesforce
Your Most Important Metric
Patrick Blair, EVP, Salesforce, CRO Quip, penned an insightful article explaining how every sales organization needs one metric that is the most important. Salesforce’s number one metric is ACV (annualized contract value), which is the sum of new or add-on opportunities. Regardless of what metric your company uses to measure success, be sure your team is aligned enough to deliver on it every quarter. Tie every business decision to that key metric.
Pipeline
As you’d expect, pipeline closely follows as the second-most-important metric. If you don’t have a pipeline, you can’t close business. But it’s important to make sure your pipeline is viable and that you understand what it consists of by asking questions like:
- What kind of transactions are in the pipeline? You should see a healthy balance of large deals, smaller transactions, and up-sell opportunities.
- Does the timing look right? Look for compelling events or budget to tell you if the deal can close on schedule.
- How much experience does the salesperson have? You can expect more pipeline and more closed deals from a seasoned veteran versus a novice rep.
Measure Monthly
Even if your reps are going after a quarterly target or quota, you can’t wait until the end of the quarter to determine progress. Measure their performance monthly to reduce risk. Salesforce enforces a making-every-month methodology as part of its culture. That means we set expectations for progress and closed deals every single month. Consider adopting this approach so you have a healthy pipeline and a steady flow of business. This makes it easier for you to consistently meet your quarterly goals.
As you’re working on these metrics, remember: Don’t assess your pipeline alone. Transparency is a wonderful thing. As you inspect your pipeline goal and potential deals, look to your team to get their insights. Managers, executive sponsors, solution engineers, and others can identify blind spots that can hold up your deal. But they can only help if you have total transparency into the pipeline.
What’s Next?
With a clear picture of what metric is most important to you (whether that’s ACV or your equivalent) and solid pipeline, you’re ready to track the health of your business. How are you going to keep up with it every day/month/quarter? In the next unit we talk about the core dashboards that every sales leader requires.