Underlying framework for sales function is the SALES FUNNEL. It describes customers’ journey through several stages before they make a purchase. Each stage can be measured against volume (leads) and efficiency metrics (conversion rates). You can optimize your sales funnel by looking into each stage volumes and stage-to-stage lead conversions.

You should also pay attention to sales velocity – the total time it takes for an opportunity pass through the sales pipeline. Aim for short sales cycle (time required from 1st contact to payment) by exploring ways how:

• to reduce friction / improve onboarding
• to increase conversion to paid customer
• to increase retention

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1. CONTACTING

Goal: generate sales leads

Activity: unique opportunity sessions (emailing, cold calling, unqiue meetings)

Growth metrics: emails, cold calls

Performance metric: opportunity conversion to sales leads

Cost efficiency metric: sales lead acquisition cost

2. QUALIFYING

Goal: generate sales qualified leads (opportunities)

Activity: questioning customers (calls, fill-in forms)

Growth metric: SQL

Performance metrics: MQL, PQL, IQL converion to SQL

Cost efficiency metric: SQL acquisition costs

3. POC (trials, demo)

Goal: engage SQL in your solution

Activity: design and execution of POC

Growth metric: passed POCs

Performance metrics: SQL to accomplished POCs, time in POC stage, goals / events accomplished in POC

Cost efficiency metrics: POC acquisition cost, for customized products you can measure total cost of all executed POCs (time & material) per accomplished POC, time to finish

4. POC EVALUATION
(can be merged with 3.)

Goal: demonstrate successful use case application and problem resolution (with additional features)

Activity: discuss customer experience and eliminate doubts prior commitment

Growth metric: successful POC evaluations (intention to buy within 2 months)

Performance metrics: ratio of sucessful POCs, SQL to successfull POCs, time in stage

Cost efficiency metrics: same as POC with respeect to successful POCs

5. NEGOTIATION & CLOSE

Goal: convert prospect to customer (=paying user)

Activity: negotiate contract

Growth metric: number of initiated negotiations, number of closed deals

Performance metric: win rate, time in stage,

Cost efficiency metrics: contract value CLV, CLV / CAC, ARPU

7. RENEWALS & UPSELLS (CUSTOMER SUCCESS)

Goal: prolong customer’s committment

Activity: invite customer to prolong their committment, initiate negotiation

Growth metrics: expansion revenue (from existing customers)

Performance metrics: renewals success rate, upsell success rate

Cost efficiency metric: net revenue retention