Increase sales through improved Daily Call Metrics
Posted by Geoff Alexander on Mon, Feb 23, 2009 @ 01:00 AM
There has been quite a bit of discussion on this site on the subject of Call Metrics, or KPIs (Key Performance Indicators). Just how many calls per day should a rep make, anyway? Much of the talk has been about whether telesales reps' KPIs are fair, and how the numbers are derived in the first place. In my opinion, the only valid call metrics are the ones are quantitively tied to quota.
Here's a model that you can use to determine if yours are meaningful. If you're an inside sales rep, see if these synch with the ones you're using now. If you're not using metrics right now, create your own chart, and you can see how many calls you'll need to make each week to make quota. If you're a manager, building a model using the formula below can be a great way to help your inside sales reps meet quota. If your ultimate objective is qualified leads or appointments, just substitute those outcomes for "sales."
You'll want to devise both a Weekly Sales Quota sheet, and a Daily Call Quota sheet. I've added straw figures as examples, and they'll be different than yours. In my telesales training courses, we always cover how measuring success is an important way to increase sales numbers. Use this model to chart your sales success.
How to derive a Weekly Sales Quota sheet for Telesales Reps:
1) What's the rep's total monthly sales quota? (Let's say $100K)
2) What's your company's Average Sale Price? (Let's say $5K)
3) Divide sales quota by ASP to get Total Number Monthly Sales needed to make the rep's sales quota: (Result is 20 sales)
4) Divide Total Number Monthly Sales by 4 to get Total Weekly number of Sales to meet quota (Result is 5 sales per week)
How to derive a Daily Call Quota sheet for Telesales Reps:
To begin determining your own company's Daily Call Quota sheets, you'll need to know:
1) Your rep's monthly sales quota (see above)
2) Your ASP (see above)
3) What your company's suspects-to-prospects ratio is
4) What your company's prospects-to-proposals ratio is
5) What your company's proposals-to-close ratio is
Here's a model used by one company: Let's say that for every 100 suspects:
1) 20 become prospects
2) 5 of them typically reach the proposal stage
3) 3 of them close
Therefore, a rep would have to call 200 suspects per week (40 calls per day):
1) To get 40 prospects (8 per day)
2) To generate 10 proposals per week
3) To generate the 6 closes per week needed to slightly exceed quota
Ramp-up time: How long after a proposal is generated does it typically take for a sale to close?
If you use this model, there will be a ramp-up time equaling the time it takes a sale to move from proposal-to-close stage. If the time is typically one month, then your reps should be fully productive using this model by the second month of its implementation.
As an exercise, plug in your own figures, and you'll have a good idea of the call numbers you'll need to make to succeed. Constantly exceeding quota is one of the 20 characteristics of a superior inside sales rep. Develop your own KPI figures, and add them to your Best Practices playbook.
So that's a formula I've found successful. What's yours?