Raise Your Batting Average
Baseball has a long history of statistics. For a hundred years, fans and managers have been keeping track of at-bats, runs-batted-in, and the all important batting average. There’s a good reason for this focus on the numbers – baseball is a long season. You can’t judge a player or a team by what happened on the field today. You’ve got to look at how consistent they’ve been over weeks and months. Are they getting better or in a slump? Was that home run a fluke or do you really have a star performer on the team.
Well, sales can be a lot like baseball. It’s not just about what happened today or this month. Managing sales is about looking at key measurements to see how the team and individual players are performing. In baseball, the batting average is a key measure of offensive performance. In sales, we can look at the win-loss ratio.
What counts as an at-bat?
There’s a strict definition of an at-bat in baseball–and it’s not the same as a “plate appearance”. If the batter gets hit by a pitch or walks, it doesn’t count as an at bat, and it doesn’t have any effect on the player’s batting average.
In sales we should be measuring how the sales rep is performing when in a competitive situation. You shouldn’t count every lead as an at-bat, just the qualified ones where there is a legitimate chance to get a sale. In most CRM systems, you’re tracking Opportunities or Deals – prospects that have been qualified as a legitimate business opportunity.
At Top Line Systems, we work with industrial businesses that sell to other businesses, usually part of a direct materials supply chain. Closing a deal with a new customer usually involves technical specifications and a formal quotation process before the project is awarded. Here are two chances for measuring performance here – how many opportunities result in a quotation, and how many of those quotations result in an order.
These statistics, like in baseball, only work with large numbers. A sales rep that did chased one deal and got the order may have a great “average” but that won’t be good enough for long. Quoting at every opportunity may make everyone feel busy, but if you’re not closing enough business it’s a waste of time & money.
The whole point of having a measurement is to have a basis for comparison and improvement. Let’s look at a few situations. Your low batting average could be caused by a number of factors. Let’s look at two different types of problems:
- Low Quote-to-Opportunity percentage
- Low Win-to-Loss ratio
Low Quote-to-Opportunity percentage
If your team is chasing deals that don’t turn into quoting opportunities, something is wrong. You can’t close a sale if all the deals are wrong for your company. In this case, you’ve got to look at where the leads are coming from – and how they’re being qualified.
I’ve seen sales reps that are always busy (active), but never have anything to show for it. It may not be their fault. They may be following up on leads that are a waste of their time. Where are your leads coming from?
- Digital marketing leads
- Trade shows
- Targeted lead programs
Digital marketing has reduced the cost of lead generation dramatically, but effectiveness has suffered. It’s easy to overwhelm the sales team with poor quality leads. The best leads are from your existing customers and business partners. Make sure you have a process in place to qualify leads before passing them on to your sales team.
At Top Line Systems, we qualify leads to the point that we know the decision makers, the buying process, timing, customer expectations for pricing and more. We help put your sales reps into the best position to close more deals.
Low Win-to-Loss ratio
Let’s say you are getting your share of at-bats – legitimate business opportunities that are in your zone – but you’re not closing enough deals. This is like the baseball player that has a low batting average. Does he go down swinging at the wrong pitch? Is he getting good wood on the ball, but it goes right to a defensive player?
Its possible this is also a problem with lead quality. You may need to adjust your customer profile to where you have a competitive advantage. Perhaps it’s an industry niche or a particular size customer that is most likely to buy from you.
Its also possible you are dealing with a deeper challenge. Are your product offerings competitive in terms of price, performance, and other factors? Analyzing why you lost a deal can give you great insight. Why you won a deal can be just an important. Just make sure you’re digging in to the real reasons.
“I lost the deal on price”
“I won the deal with superior sales skills”
What is the role of your sales rep? Are they generating their own leads and doing the qualification themselves? Are they “Account Managers” that are responsible for all communications with that account? It’s easy for today’s sales reps have multiple hats to wear, especially in smaller organizations. That doesn’t mean they’ll be good at everything, or even balance the time & effort effectively. If a customer has a problem with a shipment, do they have to stop their sales efforts to fix it?
Consider clarifying the roles in your team. Have someone designated to customer service issues. Develop a robust lead generation program that includes qualification. Keep your sales reps in front of potential customers. That’s where they have the best chance to be successful.