All metrics are not created equal. Some are much more relevant to the success of your sales development team. Let’s find out more.
How do you know you’re measuring the right things in your sales development team? Your tech stack produces a massive amount of data; you can’t possibly focus on all of it. But what should you concentrate on?
For me, it all comes down to focusing on leading indicators rather than lagging. In this article, we’ll explain these concepts and show you why leading indicators point you in the direction of sales development success. Let’s go!
Lagging vs leading
A lagging indicator is a sales metric that measures an outcome. For example, quota is a lagging indicator as it measures your results, whether that’s the number of meetings booked, revenue or anything else.
On the other hand, leading indicators measure the inputs that drive those outcomes. An example would be the outgoing calls an SDR makes during a day, week or month.
Leading indicators show that you’re moving in the right direction and allow you to predict outcomes with a degree of certainty. However, so many leaders seem to forget their value, even if people like me promote them again and again. Leaders often put more emphasis on lagging indicators, like quota, because they’re easier to identify. But, they then miss out on the rewards because while lagging indicators report the news, leading indicators allow you to shape the future.
Leading indicators for SDR teams
For an SDR team, your leading indicators are your activities, such as the number of calls you make a day or your conversion ratios.
When I’m with my clients, I approach it by starting with the quota and working backwards through the conversion funnel. I look at the quota and ask:
- To reach your quota, how many meetings need to occur?
- How many conversations convert to a meeting?
- How many calls do you need to make to get a meaningful conversation?
Once you have the data you need, you can look at averages and start to benchmark the team. Is the activity level high enough? At what parts of the sales funnel are there blockages that cause you to lose out on revenue?
When you pinpoint these issues to a granular level, you can use the data to look for improvements. For example, if your team are having conversations with the right decision-makers, but they are not converting, is this a skill gap or a messaging gap? If meetings are being held, but not turning into qualified opportunities, is this a qualification issue, a handover issue, an AE skill gap or something else? Let the data point you in the right direction.
Find out more
Lagging indicators will only tell you there’s something wrong. Leading indicators tell you what the problem actually is. If you’re just looking at the outcomes and not the inputs that drive them, you’re missing out on finding ways to improve.
Work backwards from your goal, benchmark, then listen to what the data tells you.
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