It’s just not enough to be making money. You have to be growing, too. If you’re not growing, at least as fast as your marketplace is, then you’re losing market share to someone else.  Growing means that you’re increasing sales faster than the market is growing, it means you have to take sales away from other people:  you are gaining market share.

In the tough, fast-paced, global market environment of today, measuring your sales effectiveness is vital. The good news is that it’s not hard. Here are nine actions on keeping yourself up-to-date on just how effective your company is at its sales and marketing.

First and foremost, look at the data. I’m sure you’ve been watching your top line and your bottom line…  But are you watching what goes on behind those P&L lines?

Action 1: Calculate the conversion time to turn prospects into customers.

How long does it take to turn a prospect into a customer? It’s the length of time from when a prospective buyer first shows up to the time they place their first order. Track it in days. If the number isn’t going down, it means your selling effectiveness is going bad.

Action 2: Calculate the cost of a customer and the cost of an order.
Divide your entire sales and marketing budget for a period by the number of new customers; that’s the cost to acquire a customer. Now divide the budget by the number of new orders to determine the cost of a new order. If those numbers are increasing, your sales operations are becoming less efficient. If it doesn’t improve, eventually it will kill you.

Action 3: Measure lifetime value of a customer.
To truly appreciate your marketing and sales cost, however, you have to have some basic idea of what a customer is worth. Regularly measure average life of a customer and their value to you during that time. If you don’t know this number then it’s impossible to know how much you can or should spend to acquire a customer! Needless to say, the goal is that lifetime and lifetime value increase.

Action 4 :  Mesurer le ratio de ventes perdues.
For each 100 prospects, How many do not buy in a specific predetermined period? (i.e. 1.5 time average conversion period). If this number is decreasing, then you are on the good track.

Examine Your Processes.
It’s one thing to manipulate numbers to get an idea of what’s going on, it’s another to understand how these numbers happen. To find out, let’s roll up your sleeves and get down in the dirt — where the action is. Here’s a few more tips…

Action 5: Talk to your existing customers — frequently.
Want to find out how your selling operation is doing? Who better to ask than your existing customers? Make a regular practice of talking to existing customers about your selling efforts. Pick a customer at random and get them on the phone. You’ll find that not only do you learn something you didn’t know, you’ll find that they really appreciate your interest. Many successful companies make their entire senior staff do just this.

Action 6: Talk to lost prospects/clients.
If you think talking to customers is informative, take the time to talk to the “ones that got away.” These are the one’s you really need to give attention! Make a point, independent of your sales force to call customers that chose NOT to do business with your company. Try it!

Action 7: Take a fresh look at your selling materials.
A brochure gets developed and tends to stay in circulation long after its content becomes obsolete. An efficient marketing and sales brochure that says to your prospects exactly what you want to say is not so difficult to do. You need some basic design principles and writing structure basis.   See our blog post about the subject. (available in French). If your sales materials are out of date, then your whole company and brand are out of date, too.

Action 8: Meet with a customer service person.
Take the time to meet with one of the line-level customer service.  Customer service people get the problems first.  You’ll find out a lot about where your problems lay in setting expectations properly with your prospects, or about what’s not working in the sales process, or where your quality problems are. You may be surprised at what you’ll learn!

Action 9: Contact your own company.
This is one of my favorites.  Call the 800 number, send an email, fill in the web form, or just call the receptionist and request some information on your company’s products. Then start your stopwatch. If you think you’ll be recognized, get someone else to do it for you. See what happens, what you get, and how fast. If your company is on top of its sales process, you’ll have action and materials in an hour. If your company can’t do that, you better worry about the competitor that can.

You have comments? Please suggest other actions.