A guest blog by Alex Laats, CEO at Rekener
More and more B2B companies are driving growth with an omni-channel sales strategy. A critical element of this is a high-performance sales team.
Sounds great, but a sales team is a big investment. It takes time and money to set up a team of Business Development Reps (BDRs or SDRs) and Account Executives (AEs). At the same time, Sales Managers are under intense pressure to hit their goals.
This means that Sales Managers need to know what’s working and what’s not working so they can ramp up reps and keep their performance at a high level. Metrics are an essential tool to ensure effective coaching. It allows managers to first identify areas of opportunity in their reps performance and then get to the root of the problem by understanding the "metrics behind the metrics". At Rekener, we live for this challenge, and our objective is to automate the metrics using Sales Rep Scorecards, so sales managers can quickly see what’s not working and, just as quickly, work to improve performance.
In this post, we’ll go over 5 examples of must-have skills for Business Development Reps (BDRs) and Account Executives (AEs), and share our tricks for using metrics to drive success.
#1 - Maintain Activity Levels
A big part of the job for BDRs is to generate the right volume of calls, emails, connects and more. To figure out what activities to track, you start with the goals. BDRs are usually responsible for setting demos or generating opportunities. The key is to use historical data to understand the volume of activities that drive the demo or opportunity generation goals. Greg Keshian has written two great posts that describe how to set up scorecards with the right metrics for inbound and outbound reps.
The best way to make sure that BDRs hit the target activity levels is to shine a bright light on the metrics. Sales Rep Scorecards really help. Once set up to show activity levels by rep, it is very clear who is hitting the target and who isn’t. At Rekener, we recommend using these scorecards at daily stand-ups with BDR teams and at weekly one-on-ones.
Quantity metrics don’t tell the entire story, so it’s important to look at metrics that expose whether BDRs are focused on the right activities. For example, you want to make sure that reps are not focusing their activities on a small subset of leads and accounts in an effort to hit volume goals. To overcome this, you can include metrics like Percent of Leads Called, Leads Sourced per Account, Calls per Lead and Unique Leads Called. These metrics are good early indicators because they can be measured before you have your results for demos or opps generated.
Another trick is to create an Activity Score. As BDRs are arguably the most important people in your sales team, it is vital to keep them motivated and driven.
An Activity Score assigns a value to each activity, with higher values assigned to the metrics that have a close connection to the objectives. For example, it makes sense to score Connects and Demos Set higher than Calls Made and Emails Sent. Rolling these scores into a total Activity Score is very powerful because it gives managers one number to show reps where they rank. This motivates reps to work with managers to improve performance.
Here’s an example of a Sales Rep Scorecard for a team of BDRs being ranked by Activity Score.
#2 - Source Quality Leads
BDRs need to develop skills for sourcing high quality leads. Sourcing lots of leads is very easy, because reps can scour LinkedIn, ZoomInfo or other tools to add leads to the customer database. Volume of sourced leads is a good activity lead to track.
The real challenge for managers is to figure out if reps are sourcing quality leads. By looking at Lead Conversion Rates, you can measure the percentage of leads that end up converting to opportunities. It’s good to look at this on a cohort-basis, which means that you take the number of leads created in a period and then divide that into the number of those leads that eventually convert into opps.
If a BDR team is crushing numbers for sourced leads but the Lead Conversion Rate remains low, then the team needs better training. It could be that they don’t have a good understanding of the ideal customer profile or the key personas to source.
Another way to use metrics to figure this out is to use a visualization similar to the following bubble chart. This bubble chart is set up to show sourced leads (called Contacts Created) on the Y axis and Opportunities on the X axis. The size of the bubble is number of Calls. This is a good way to show the Reps that are having success generating Opportunities from sourced leads because their bubbles are more to the right. The size of the bubble and the number of contacts created shows the amount of effort required. If a BDR has a big bubble up and to the left, that means they are not sourcing quality leads that are converting into Opportunities.
#3 - Handle Objections
Overcoming customer objections is a huge part of any sales role. When a BDR is hitting all of their activity metrics but is not generating enough demos, the key is to break down the numbers to identify the root of the problem. It could be related to calling the right leads (as discussed above) or to handling customer objections.
The first metrics to keep an eye on are Activities per Demo Set. If the number is high, then break it down to look at interim steps in the process, such as Connects. If there are good Connects but the Connect per Demo ratio is high, then it could be a problem with objection handling. When a manager sees this, it could be a matter of training, to make sure that the rep has all the necessary facts to overcome objections. Or, it could be a matter of delivery, which a manager can determine by listening in on some of the rep’s calls.
The same analysis works if the goal is generating opportunities. In that case, ratios to study are Activities/Opportunity, Connects/Opportunity and Demos/Opportunity. If there is a fall off after Demos Set, then the problem is probably with handling objections in the demo.
Sales Rep Scorecards can be used to track all of these metrics so a manager can zero in on problems early. Some of Rekener’s customers have created separate scores for opportunity generation, as shown in the following example. This example also shows achievement levels for Opps and Bookings compared to targets.
#4 - Qualify Opportunities
For a sales team, the ability to qualify opportunities is a key skill that must be developed in order for BDRs to progress in their careers to become Account Executives and Sales Managers. An example of a sales qualification framework that I’ve used many times is BANT, which qualifies opportunities based on an assessment of Budget, Authority, Need and Timeline. Here is a good Sales Hacker post by Jacco Van der Kooij on the challenges of sales qualification for BDRs and AEs.
If a Sales Manager is hitting opportunity numbers but not generating bookings, then it is important to dig deeper to get to the root of the problem. There are lots of possible reasons why this could be happening, but they can be divided into are two main categories.
#1 - There is a problem with the product, either in terms of feature deficiencies relative to competitors or product-market fit.
#2 - There is a problem with the sales process or skills of the sales team. If it is the latter, then the ability to qualify opportunities is something that a sales manager should look at right away.
So, how can metrics help the sales manager figure out if there is a problem?
The best metric is Cohort-Based Close Rate. This measures the number of opportunities from a specific period that were eventually closed / won. Cohort-based isolates the opportunities that were created in a specific period and ensures there are fewer variables that influence whether they end up closed won or closed lost. This helps a sales manager isolate whether qualification skills are a problem.
Note that you don’t want to use Closed Funnel Close Rates for this purpose. A Closed Funnel Close Rate looks at the number of deals won in a given period, divided by the total number of deals closed (won or lost) in the same period. Closed Funnel is a bit murkier because the opportunities that close in any given month might have been created at different times, and there could be more reasons influencing why they end up closed won or closed lost.
The following example demonstrates how Sales Rep Scorecards can be a great tool for staying on top of Cohort-Based Close Rates.
#5 - Close Deals
The ultimate goal is to close deals and generate bookings. And although, it’s great to hit the bookings number, it’s a trailing indicator that doesn’t tell a sales manager much about the strength of a sales rep or a sales team.
Sales Velocity is the best metric for sales managers to proactively measure the expected output for a sales rep or team in a given period of time. It is a more complex metric that is calculated by multiplying the number of opportunities created in a period by the Average Selling Price and the Close Rate (in this case Closed Funnel), all divided by the sales cycle in the period.
If a sales rep hits their booking number for a given period but has a low sales velocity relative to other sales reps, then a sales manager can focus her energy on helping that rep where she is weak.
Here is an example of a team of AEs, ranked based on the Sales Velocity metric.
Measure and Your Sales Revenue Will Grow
As anyone who has worked in sales will tell you, it’s not easy. When you’re managing a whole team, the challenges only rise.
However, if you know the right metrics to measure, and you know how to measure them, your job will become a whole lot easier, and your sales will continue to grow.
Make sure you’re measuring:
- Activity levels
- The quality of your lead generation
- How you handle objections
- Your ability to move leads forward
- Deals Closed
About Alex Laats
Alex is CEO and Founder of Rekener. Previously, he served as President and COO at ZeroTurnaround and as President of the Delta Division of BBN Technologies. At ZeroTurnaround, he grew high velocity inside sales by 6x in 3 years. At BBN, Alex co-founded RAMP and AVOKE, both recurring SaaS businesses based on BBN's world class speech recognition and natural language processing tech. Alex started his entrepreneurial career as founder and COO of NBX Corporation, which led the transformation of business telephone systems to Voice over IP. Alex’s companies have generated $500M in liquidity events and more than $1B in sales.
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