Five Metrics Your CRM and Project Management Software Should be Tracking

Every business has a CRM “system.”  Not every business has CRM “software.”  The difference between the two is the level of efficiency and insight that can be gained with proper tracking and measurement. Whether you have created a spreadsheet specific for your daily tasks, are using a free CRM tool, or have implemented an entire ERP solution, the best CRM for your business is one that will make your life easier and transition you from “gut feelings” to “actionable items.”

The following five metrics will help you target the right prospects for your business and identify areas for improvement.  A slight increase in any of these metrics can dramatically improve your bottom line. 

1. Number of leads required:  How do you know if your marketing is working?  It is working if it is generating the required number of leads at the top of the sales funnel.  If you don’t know how many leads you need, you can identify this number by working the math backwards based upon the variables below.  Start by identifying a revenue number that you believe will be profitable to you.  If you have a 50% conversion rate, simply adding 2 more leads will land you a new customer!
2. Average Sales Cycle:  From the initial opportunity until the deal is signed, using your CRM to track how long your average sales cycle is open will allow you to identify the types of prospects or projects which are most likely to close “now.”  Using this data, you can create a few more prequalification steps to eliminate meetings today that would best be held in 30 days.  This would allow you to focus your energy on opportunities that will make an impact on your business today.  A small decrease in time to close can have a big impact on your cash flow.
3. Average dollar sale:  Every business is different; whether you target 100 $1 sales or 1 $100 sale, you need to know which type of opportunity is best for you.  Time spent closing deals that aren’t in your best interest could otherwise be spent landing sales that were.   Additionally, if you could “up” your average dollar sale by only 10%, you could essentially add a “free” client on every 10th sale. 
4. Conversion Rate:  Do different reps have different close ratios?  Of course, but why is that? There are a multitude of factors that can play into the company’s conversion rate, be it better target qualification, less competition for the needed product or service, or the particular skill of the sales rep.  CRM tools can help identify the factors that lead to higher or lower conversion rates.  Enhance your advantages and eliminate the obstacles.  A small improvement in conversion rates will mean less time swinging and missing and more money in the bank.
5. Margins: Have you ever wondered how you could hit your quotas and the P&L still lag behind?  Perhaps it is your margins.  Material and labor costs have risen dramatically.  Have your prices kept pace?  You can close a million dollar sale and be worse off if it costs you two million dollars to deliver the product.  Remember, margins are a factor of profit.  Markups are only a factor relative to cost.  Never forget to keep an eye on the profits.   If you run a service based business, in a perfect scenario, your Project Management system would tie into your CRM, so that you could get a true indicator of a clients profitability based upon not only the sale, but also on the delivery and service of the product.

If you would like to learn more about how you can track these valuable datapoints quickly and easily, please contact me today to schedule a conversation.

Brad Watson

haloDASH.com

CRM and Project Management Solutions

bwatson@halodash.com