ATD: Key Metrics: How Are Sales Organizations Really Using CRM?




December 02, 2015

by Mark Donnolo, Managing Partner, SalesGlobe

CRM software is practically mandatory for every large or mid-sized  sales organization. It’s expensive and takes time and training to implement—and then everyone protests using it. Some return to Excel sheets. Some ignore it altogether. Some sandbag the system making it irrelevant. But sales leadership soldiers on, finding new and creative ways (or just straight demands) to ensure their CRM is a part of the organization.

So how are they using it? According to a recent SalesGlobe survey, sales organizations are tracking a lot of information, and have plans to track even more. 

Total Pipeline Value 

  • 100% of respondents track total pipeline value. All respondents use it to understand conversion and close rates, and most measure this by forecast stages in their pipeline.
  • 50% of respondents indicate their companies have a target number. (Best practice is for the pipeline to have between 2.5 and 3 times the revenue goal.)
  • Only 25% of those with a target number believe the target number is meaningful; for most organizations, it’s used as a guideline.

Average Deal Size 

  • 60% of respondents track average deal size.
  • 10% of respondents do not track average deal size because a very small percent of customers make up the majority of the deals, and the large deal size of these customers skew the results.
  • 25% of respondents use the metric to identify discounting or other trends and to monitor how effective they have been in raising the deal size.
  • 10% of respondents use average deal size as an input to quota setting.  

Sales Price 

  • 40% of respondents track sales price.
  • 10% of respondents stated that sales price information is used for margin analysis.
  • 10% of respondents indicated that sales uses this number to understand how they compare to the market and competitor pricing.  

Win/Loss Ratio Data 

  • 30% of respondents review win/loss ratio data.
  • 10% of the respondents indicated win/loss ratio data helps measure the effectiveness of sales campaigns and promotions.
  • 20% of the respondents that measure win/loss data state that reports are sent out, but there is no indication that the results are reviewed.
  • Most respondents indicated that there is value in looking at win/loss conversion rates over time, especially when considering if any process or policy changes will drive the win ratio up.

Sales Pipeline Cycle Time 

  • 30% of respondents track sales pipeline cycle time.
  • 10% of respondents indicated that because of the maturity level they have using their CRM, it helps to proactively identify issues and eliminate sandbagging.
  • 10% of respondents indicated that sales pipeline cycle time is looked at only by the sales executives to help them understand the average duration to close; this helps to confirm the sales forecast.
  • 20% of respondents indicated that it is shared throughout the sales organization.
  • 50% of those that do not measure cycle time indicate that the nature of their business prevents this from being a meaningful number. Examples include: seasonality of business, how products are split out and shipped, and even maturity in CRM usage.

Other metrics tracked and studied in CRM systems include contract terms, renewal rates, product mix, forecast relative to target, upsell opportunities, year-over-year and quarter-over-quarter growth patterns, and sales pipeline and billings by region.  And while it’s not happening yet, many sales leaders hope to use their CRM systems to look at sales rep capacity utilization and rep utilization of internal sales support resources in the future.

While challenges remain with CRM systems, the data they provide is critical for a high-performing sales organization, since these reports influence the sales strategy, product mix and offerings, and sales expansion and contraction decisions.