How To Use Sales Metrics To Improve Your Win Ratio
“The definition of insanity, is doing the same thing over and over again, all the while expecting different results…”
Maybe Albert said it, maybe he didn’t – it doesn’t really matter. What matters is that we learn from our experiences…
In this post I am going to show you how to create sales metrics that you can use – no matter the size of your business – using data that you already have, and a simple Excel spreadsheet.
Let’s look at a favorite offender – the Blue Bird – an unearned sales opportunity that comes flying in from out of nowhere, and lands on your desk requesting a proposal.
Here’s what many people miss. An inquiry or other expression of interest, especially from someone you have not done business with, does not constitute a business opportunity. And it certainly doesn’t justify an investment on your part.
Many companies who deal with a high volume of leads use the BANT process to separate the wheat from the chaff.
BANT stands for:
Budget – Do you actually know that there is an approved budget for the project under discussion? This is different from “we are interested” or “we are meeting to discuss” which might be good signs of an opportunity down the road, but is not the same thing as a budget commitment worth investing your time and dollars against.
The best indicator that there is a budget is an RFP from Purchasing soliciting bids. Even then it pays to ask.
Authority – Are you talking to someone who will be making the purchase decision? Until you know who the final decision maker is, you may be hearing a lot of wishful thinking. All too often people want to use a proposal to advance their own agenda.
There is nothing worse than walking into “the room” on “the day”, and realizing that you don’t know a soul… except never getting to present at all.
Need – Never forget that you are the expert. Does the idea they are interested in, or the concept they are describing, make sense to you? If it doesn’t, it could mean that it hasn’t been thought through, or that you are talking to the wrong people, or quite possibly that you are the wrong company for the job. Any of these are good reasons to head for the exits.
Here’s another good test – can you clearly explain why the project is important enough to the client to survive the next round of budget cuts?
Timeframe – Is there a key event which will drive the timetable? I am always wary of projects that don’t have deadlines – they are usually supplanted by projects that do. I like to say that “every project has a time when it is ready to be done.”
Try to stay clear until that moment arrives.
While BANTF is harder to pronounce, I like to add an F for Fit.
Fit – Is your company a good match for the prospect and the opportunity? Are you a credible supplier? Do you have reason to believe that you could pass though all of the gatekeepers and purchasing criteria and be awarded the project?
There has been a tremendous amount of discussion on the web about how clients now control the purchasing process, and how they are completing a significant part of their research before they contact a prospective partner, vendor or supplier. That may be true, but you also have a process and you need to be satisfied that you have a good chance of winning, before you invest your proposal dollars.
The best way to gauge interest is to analyze how the prospect has engaged with your company. Have they:
- Requested information on your website?
- Seen a capabilities presentation?
- Shared what is essential for a successful outcome?
- Spoken to one or more references?
In short, have they invested the time to know who you are and what you do?
Even if you are desperate for the work, if the answer is “no”, odds are excellent that you are being to set up to provide a necessary third, fourth or fifth bid. Here is where the Einstein piece comes in – you need to be very disciplined about this, or you will waste a whole bunch of time and money chasing Mr. Blue Bird as he flies out your window.
Here is how you can use sales metrics to support your new business development process and take some of the emotion out of the pursuit decision.
Set up a simple spreadsheet. In the left column, make a row for each of the five BANTF questions.
- Note that you will get much deeper insight if you break down Fit to match the steps you have designed to move a prospect through the sales funnel from Awareness to Interest to Consideration (usually the proposal) to Purchase.
Then make columns for the last five new business opportunities that you pursued. Put the jobs that you won in bold or red. The larger the sample – meaning the more companies you list – the more meaningful the results will be.
- If you have multiple sales people then you might want to list the last five pursuits for each one, so you can see what works for the company as a whole, as well as each person compares.
For each project put a 1 in the row if the answer is affirmative (i.e. if you knew there was an approved budget), and a big old goose egg if the answer is any version of no.
I am trying to keep this simple. You could use a 0-5 scale, the key is to be consistent so that everyone understands how the scores are assigned and what they mean.
To analyze the data total the rows and columns.
- Looking across by row, the totals tell you which of the five questions are the most important to winning or losing.
- Looking down by column, you can see how closely the totals correlate to winning or losing.
You might be able to say something like:
“I can see that every time that we didn’t confirm that there was an approved budget, we lost our investment. And that every time the client understood our capabilities we won.”
Congratulations! You have just used sales metrics to determine which BANTF criteria most impact your success. If you read last weeks post, you know that this is a way of establishing a KPI – a key performance indicator – for your sales efforts.
Integrating sales metrics into your decision-making process on an ongoing basis – i.e. filling out this spreadsheet after every pursuit – will give you the insights you need to improve your proposal ROI.
- Which new business development metrics are you now tracking?
- What other aspects of your business can you apply these techniques to?
- What systems do you need to put in place to support this approach?
If you are sick and tired of losing proposals you might want to take advantage of my complimentary post-mortem audit. You can find out more here.
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And be sure to Be sure to visit ck Curates where there is a whole section devoted to Pitches and other aspects of new business development.