Leading indicators are more important than ever.
Our country is experiencing one of its most unpredictable and chaotic periods in history. As business leaders, we must adapt quickly to the changing environment. We also need to adjust our business and marketing plans. You may be desperate for help with marketing during a pandemic. You might want to reevaluate your sales methods. It is important to look forward and not just at the past to survive the current turmoil.
What do you mean? What are we saying? What are some examples of this? This will be explored in depth, but the key is to have B2B indicators that can predict the future. You can then optimize your business plan and marketing strategy before it’s too late.
We have managed to grow our business and relationships with customers despite these challenges. We did it by focusing more than ever before on the key performance indicators that drive our business.
Here is a list of the tools we use for B2B marketing and those that we’ve seen used by other B2B leaders to drive predictable growth in revenue and strategic pivots based on data.
All of these micro-leading indicators are part of Power Digital’s “4 pillars”, which drive our economic engine and forward-thinking forecast model. These four pillars also serve as leading indicators, which predict our financial performance even before it happens. We are currently within 5 %+/- of where we end up.
Leading indicators for Power Digital’s Four Pillars:
- New business (President is accountable) = Sales and acquiring new customers
- Client retention (COO accountable) = Doing excellent work for clients and keeping them
- Service expansion (President is accountable) = expanding the services that we offer to our existing customers while we build trust and prove ourselves
- Cost Model (CFO Accountable) = The key pillars to ensure that we invest at the right levels as we grow in order to increase our teams and improve our technology and product while maintaining our profit margins.
We have monthly, quarterly, and annual plans for each of these four pillars. This makes the financial performance we see in our rearview mirror very predictable.
Before we go deeper into the Leading Indicators that drive these Four Pillars, there are a few things to consider.
- Are these key pillars already established in your organization?
- Can you track your employees in real time through a dashboard or a tracking system?
- What is it that makes you miss your goals or exceed them?
- Does your model allow you to update the pace and track its impact in real time, such as by using customer engagement metrics?
- Are you able to clearly identify the owners of each?
- Are you using micro-metrics and leading indicators to help you achieve your goals?
We have created a simple checklist that you can use if the answer to any of these is unclear. This list is an extensive list of important future leading indicators. We need to become even more data-driven and better snipers in order to succeed in this wild business world.
Revenue Leading Indicators
Sales Activities
It is essential to measure and report your sales activity (daily, weekly). Tracking the tactical activities of your sales reps is necessary. These activities (i.e., new prospecting calls/emails, product demonstrations, proposal presentations, etc.) Measurement and reporting are critical to ensuring that your pipeline grows. These activities can be measured to identify skill gaps. Your sales leader is also a key person when it comes to reporting on the sales process. A sales leader should act as an overhead, ensuring that the rest of the team is on track and reporting on time.
Total Pipeline Revenue
It is important to evaluate your entire sales pipeline regularly (daily, weekly) as part of the overall sales cycle. This directly correlates with your anticipated (forecasted) results for the period your business model dictates. If your business plan predicts $1M of total sales for Q4, then your real pipeline target will be determined by your sales velocity (the full time to close a sale) and win ratio (the percentage of the time that you win a contract). Forecasting sales can be done using a simple math equation. This will allow you to predict your sales in any window accurately.
Monthly Updates to the Pipeline
According to the same rules as the pipeline total, the new deals will land in only two places: “close won” and “close lost.” Your pipeline will be affected by either outcome and decrease. To ensure consistent and predictable performance, it is important to have a monthly business pipeline growth goal to offset any decline in the total pipeline. This KPI will help you avoid sales problems and identify the right time to add a new sales representative to your team or adjust your marketing and prospecting efforts in order to meet your growth targets.
Sales velocity & win ratio
These two metrics can be very useful indicators in any situation but are especially important when the economy is in flux. In these times, companies tend to be more cautious about new investments. They also create more robust decision-making processes that include more checks and balances. The sales cycle length compared to your benchmarks will allow you to determine which salespeople need additional coaching and support in order for them to navigate the new decision-making process. It will also enable you to identify which verticals still make buying decisions and which ones are on hold.
Contributor Sales Productivity
How you achieve your target is equally important. The way you reach your target is also important. Why? You cannot scale your sales organization if you don’t know how you hit (or miss) your target.
Here, the key is to rank your salespeople and measure their productivity. How many sales reps make or exceed their quotas? How many reps are absent? How many reps are missing? What would happen to your sales targets if 50% of those reps who are currently not meeting their quota met their budget goals instead? Calculate – the sales productivity of your organization is one of the main reasons why you achieve (or fail) to meet business targets.
You’ll need to have a playbook that allows your salespeople to be productive and meet their quotas. Many organizations don’t provide their salespeople with enough sales enablement to make them successful. Setting expectations, coaching salespeople on value and unique selling propositions, and then releasing them to win business are common problems.
It’s a world of fierce competition, and while this may produce results, there are no guarantees. Sales enablement marketing will increase the productivity of your field reps and their chances to win.
