Is your sales team reaching or surpassing your monthly sales targets? If so, congrats! If not, you may want to reevaluate how you set and measure goals for your sales team. To be successful, sales managers and executives need to understand the sales funnel, set the right goals for the sales team, and use data to measure their performance.
In this post, we'll discuss setting goals for the top of your sales funnel, including how to begin mapping your sales funnel and determine the right sales KPIs to keep you on track.
Your sales and marketing funnel encompasses the entire customer journey from brand awareness to retention and renewals. So, the sales funnel begins where your marketing funnel ends—with that crucial lead handoff between your sales and marketing teams—and continues through to closed deals. But what steps go in between?
One useful way to visualize your funnel and identify each stage is through inputs and outputs: What does your team start with, what tasks are they responsible for, and what do they produce?
Depending on how you've structured it, your sales team may receive leads or MQLs from marketing—these are your inputs, feeding the rest of your sales funnel.
You may be wondering what the difference is between a lead and an MQL?
A lead is a piece of contact information, typically an email address, that a person gives to your company, often in exchange for a piece of content like a newsletter or ebook.
An MQL, or marketing qualified lead, is a lead that has met certain engagement criteria before being handed over to sales. For most organizations, it doesn't make sense for sales to contact every person that downloads a whitepaper. Instead, marketing teams nurture leads until they take higher-intent actions (like requesting a demo) before sales reaches out.
What happens to leads or MQLs after they're handed over to your sales team? Every sales process will be different, but generally, MQLs go through qualification and demo scheduling processes.
Qualification is the process of determining whether a lead is serious about making a purchase and ready to take steps towards it. This includes asking questions about the lead's authority to make the buying decision, their organization's budget, etc.
Once a lead has been qualified and deemed ready to move forward with a sales rep, they’re considered a sales qualified lead, or SQL.
The next step after qualification is to schedule a demo or discovery call between the lead and a sales rep. For most teams, it makes sense to do this at the end of the qualification call, and take advantage of having the lead's attention and interest. Sometimes an SDR or sales rep will then send further nurturing content before the demo is held to keep the lead warm and prepare them for the upcoming call.
Producing SQLs and scheduling demos for them is the desired output of the top of the sales funnel. As they progress to the middle of the sales funnel, potential customers learn about and evaluate the product as a solution for their company's needs. Because of the time investment required by sales reps to move leads through the remainder of the funnel and close deals, highly-qualified leads are incredibly valuable.
Of course, not every lead that gets contacted and asked qualifying questions will become an SQL. Some won't be ready to move forward with sales, some won't be interested, and others won't acknowledge your contact at all.
However, just because they don't all become sales qualified leads doesn't mean you've failed. In fact, identifying that someone isn't a good fit for your product early on is a big win—it means you won't waste any more time trying to sell someone who isn't going to buy, and that you can spend more time on those leads that will eventually become paying customers.
Taking these steps, even if they don't produce exactly the result you want, can also help your business in other ways. Sococo, makers of virtual office software, use qualification calls
to learn more about their customers' pain points. By tracking pain point data, they've been able to adjust their marketing strategy to make sure they're attracting the right prospects. As a result, they're now reaching out to people who are more likely to become SQLs. What a win!
Now that you know the inputs (leads or MQLs) and the outputs (SQLs) of the top of the sales funnel, and the steps your team takes to convert them (contacting and qualifying), you can begin setting goals.
Though it may seem obvious, an overarching goal for the top of your sales funnel should be to turn as many of those MQLs into SQLs as possible. You may even want to get your marketing team involved here as well, since they should be invested in providing the best MQLs that are most likely to turn into SQLs.
It may also be helpful to set smaller goals that support the overarching objective. What sort of contacting and qualifying targets will help your team reach the goal of getting more SQLs? For example, how many emails do they need to send to MQLs each day? Do they need to do any outbound prospecting in addition to their MQL contacting?
It's hard to know whether you're going to reach your goals unless you track your progress. Sales metrics use data to make that progress tangible. In most cases, the data for your top-of-funnel sales metrics will come from your CRM. So what should you be tracking? Here are a few ideas:
-Sales Activities by Rep This metric shows the work your team is putting in to get the right results. Tracking it where everyone can see it can also increase competitiveness among team members. Possible sales activities to track include:
-Number of Calls Made / Number of Emails Sent
-Number of Qualified Demos & Appointments Scheduled
-Email Open & Response Rates If your SDRs are writing their own email sequences for contacting leads, they should be tracking and evaluating how effective their emails are.
-MQL:SQL Ratio What percentage of MQLs convert to SQLs? This metric is key to ensuring your sales team is getting the highest quality of leads from marketing.
-If your team is also responsible to schedule demos, SQL:Demo Scheduled Ratio may also be a meaningful metric.
Remember that just as the marketing team should look at the MQL:SQL ratio to make sure they're sending over the best MQLs, you should also be looking at middle-of-funnel conversion rates to ensure you're passing truly qualified SQLs on to the next step of the sales process. If the SQLs your team is producing aren't actually a good fit, your sales team will waste valuable time trying to sell to them, or worse, you'll acquire customers that quickly churn.