My guess is that most of you track an important conversion metric: that is, the percentage of your proposals that you win. And that’s certainly an important one. But that’s at the end of the sales process. The real question is… Why aren’t you tracking conversion along the way?
Think of the sales process as a sequential series of events. When you’re successful, it goes like this… A certain percentage of your sales leads convert to having an initial meeting. A percentage of your initial meetings result in more in-depth conversations. Successful in-depth conversations result in being invited to deliver a capabilities presentation. If you do a good job with the presentation, you might receive an RFP. And of course, do a good job with the proposal and you might pick up a new project or a new client!
Your sales process may have more or fewer steps… But you get the idea.
“Sure, Steve… I understand the process, but why bother tracking all of those conversions?” I’ll tell you why…
Forecasting
First, think of conversion tracking as a forecasting tool that works like this:
If you track all of the individual conversions for a while, you’ll establish conversion averages across your sales team for each step in the sales process. With that, you have forecasting ability. You now know, for example, that:
- for every 100 sales leads your sales and marketing team generates,
- you average about 80 initial meetings… and of those,
- you end up with 60 in-depth meetings,
- which result in 40 capability presentations
- where 20 of those clients ask for a proposal;
- you win 10 of those
- at an average of $50,000 per project
- resulting in a forecast of $500,000
And the more of this you do over a longer period of time, the more refined and predictable your forecast becomes. Think of the confidence this will give you as you work on planning the future of your business.
Improvement
Tracking conversions also allows you to predict – with confidence – the impact of your sales team getting better at their craft.
Imagine, for example, that you’ve worked with your sales team to improve their presentation skills. And those improvement efforts result in just a 10% increase in the ‘presentation to RFP’ conversion. Using the example above,
- 40 presentations would now
- result in 24 RFPs
- which generate 12 wins
- at $50,000 each
- which is $600,000 in revenue
And this sort of measurement can apply to all steps in the process… generate more leads, have better introductory calls, write better proposals, and so on. These activities aren’t just inherently better things to do… but because you’ve been tracking conversions, you can predict the positive financial impact those enhancements will have.
By the way, conversion tracking doesn’t have to be a tedious, manual process. Many CRM systems have the ability to track all of these conversions for you.
The Bottom Line
There’s an old saying… “You can’t manage what you don’t measure.” If you want to refine your sales forecasting and improve revenue growth, conversion tracking can help you get there. And if you’re not doing it now, it’s never too late to start.
Good luck and good selling.