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Sales and Marketing – The SAM Scorecard


Sales and Marketing - The SAM Scorecard GrowthForce“You need to define success before you can know if you’ve achieved it.”
-Richard Branson

There’s no questioning the fact that sales and marketing KPIs are leading indicators for any business. Why? Because they help you plan and evaluate past data to drive future (hopefully better) results. Sales leads to business growth, and more sales is usually driven by marketing and biz dev efforts.

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Mastering this interdependent relationship between departments is an often untapped method to growing faster and being more profitable. The next logical step for a CEO, then, is to start by determining “What causes sales in my business?”

This is achieved by defining your sales steps and asking the right strategic questions, of course. Let’s start with the sales step formula and segue into KPIs:

Sales Steps Formula

In one form or another, every company makes sales by following a defined sales-process steps that usually looks something like this:

lead generation---> proposals ---> closed sales

The specific steps will vary; that, or there may be more/less steps for different industries/verticals, but all sales processes should follow a uniform, basic formula that’s both iterative and methodical.

As an overarching authority figure to this process, the CEO must set sales and marketing goals and objectives to follow. Then, the sales team needs to outline how those goals will be met. From there, you can figure out what needs to be measured.

What are sales and marketing activities you need to achieve the sales targets? Those are the metrics to share with everyone in the sales organization so you can figure out whether the right people are in place to achieve those goals.

Questions a Strategic CEO Should be Thinking About:

  • What do your sales leading indicators tell you? (Hint: watch the trends)
  • What does your pipeline look like? Is this an area where the CEO needs to focus?
  • Where do you spend sales and marketing resources to get the most profitable deals?
  • What type of clients should the sales reps focus on? (Hint: the Service scorecard will tell you who are the most profitable clients)

The Sales & Marketing Scorecard/KPIs

The following are some valuable charts to follow in the sales and marketing scorecard:

  • # of Leads and # of Leads TTM
  • $ Value of Proposals and $ Value of Proposals TTM
  • Closed Sales and Closed Sales TTM

GrowthForce_SAM_ScorecardIn sales and marketing, a business’s key performance indicators revolve around the steps of the sale. We have selected these 3 basic sales KPIs based on the 3 steps of the typical sale.

This sample KPI chart follows this progression of a sale:

  1.    Leads 2. Proposals 3. Closed Sales

By studying the sales KPI charts, a CEO can make predictions by asking:

  • What step in the sales process is the best indicator of success (for GrowthForce, it’s the number of qualified leads)?
  • How are you doing in getting those leads versus your targeted goal?

Using the Sales and Marketing Scorecard TTM KPIs means you can see where these KPIs are trending over time. In any given month leads, proposals and sales may be up or down, giving a false sense of fear or security.

Case in point: the TTM (Trailing Twelve Months) trend shows you what’s really happening in the business.

If these KPIs are trending down, that usually means lead generation should be the focus of the CEO and sales management. If your pipeline is full and leading indicators of leads and proposals are trending in the right direction, the CEO can then focus elsewhere.

If you're a service business, these leading indicators become extra important as it helps forecast hiring plans and when to bring on new people.

Using Leading Indicators to Hire The Right Employees

In a service business, having the right employees is the key to success. To get them, you must have the lead time to be able to hire right. You get that extra lead time by looking at leading sales indicators to forecast when you will need more people.

Doing this gives you more time to find someone who has the behaviors that match the core values of the company. That’s exactly how you lower turnover, also! After all, 80% of turnover comes from bad hiresYou can hire “A” players, if you don’t have to rush into hiring employees!

Additional/Advanced Sales & Marketing KPIs

CEOs should focus not just on total sales, but also sales efficiency. CEOs should ask themselves:

How many steps does it take to close a sale? What are our percentages of qualified leads that become clients? What is the percentage of proposals that become clients?

By understanding your sales funnel conversion metrics and comparing over time you can learn where to put energy into improving that part of the process. Tracking activity and profitability by each sales rep, team, office or region is possible so you can see which offices have the best activity and closing ratios.

You should also be analyzing your marketing spend ROI and the number of leads and closes being driven by any given marketing source.

  • $ in backlog (sold but not delivered) – this leading indicator tells you what the short-term revenue will look like. Make this one of your key indicators if you are able to build a steady backlog in your business.
  • Lead-to-Close percentage – this metric that shows how many leads you need to get to close a new sale. This is typically a critical leading indicator of future sales.
  • Lead-to-Proposal percentage – shows how many leads become proposals.   Work backwards to figure out how many leads you need to generate the targeted number of proposals.
  • Proposal-to-Close percentage – shows the percentage of proposals that become clients.  Work backwards to figure out how many proposals you need to get a new client.

Your Sales and Marketing KPIs

When it comes to your business, every single one is unique – so don’t just take our KPIs without doing your own due diligence. You’ll need to test what works well in coordination with your marketing and sales departments, and ascertain what will provide the most comprehensive reports without being overly granular.

Need motivation? We found this snippet from Lead Forensics to prove the point on the importance of consolidating data and isolating the right knowledge:

Data is constantly being churned out and it’s a highly valuable resource for any business. However, if it’s just left as a heap of bits and bytes, then it will have no meaning. But if you use it properly then it will lead to knowledge that you can then learn from and apply, encouraging even greater business success.

To understand how to get actionable financial statistics for making data driven decisions, we invite you to check out the CEO’s Guide to Keeping Score:

The CEO's Guide to Keeping Score

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