Using 5 Metrics to Grow your Business

Successful customer acquisition programs are like training for a marathon. The key to increasing the speed at which you finish the race is consistent improvement in every aspect of the training routine with a mindset that success over long distances is not a chance occurrence.

The key to increasing revenue with programs that include a phone call can be traced to one of 5 Key Metrics. Improve any one of these metrics and revenue will increase.

They are:
1.
The number of dials
2.
The ratio of conversations to dials (Conversation %)
3.
The ratio of appointments to conversations (Appointment %)
4.
The ratio of closes to appointments (Close %)
5.
 The average value of a close

There are lots of tactical things that can improve these basic metrics depending on your product or market. From providing the sales force with a quality suspect lists to increasing the average price point, there are numerous creative ways to improve these ratios. The trick is to measure their impact.

This calculator can help you do that, and more. Here are some other uses:

1.
How many minutes need to be committed to cold calling, based on the 5 Metrics, to hit a specific revenue target?
2.
How many suspects a sales person will need in order meet the cold calling program goals?
3.
Who is accountable for contacting all suspects and do you have enough sales people?
4.
What should you set as prospecting goals in Klpz?
5.
 What is the "asset" value of your suspect list?

As a cautionary note, any calculator like this provides a compass reading and not a precise path. It will provide good directions and food for thought.

We will use a sample company to show the various calculations available. Let's first examine how much time a sales person should commit to cold calling if their entire quota depends on it.

In the example, $660,000 is expected revenue from cold calling activities.

The 5 Metrics plug directly into the calculator. In most cases, the three metrics associated with cold calling are not currently known. After one month using Klpz, your Klpz reports can provide guidance.

In the example, the calculator suggests that the sales person needs to spend 30 minutes a day cold calling.

The amount of time committed to calling programs is a driver in determining the correct number of suspects a caller needs.

A sales manager does not want a caller to have too few suspects to call, nor does the manager want to have a lot of suspects that never get called. In the example, the sales manager has determined the number of times a suspect should be pursued each year, in this example twice, on average.


The % of replacement targets is an indicator of the quality of the list the caller is using. Klpz helps calculate this number, over time, by tracking the number of suspects that are removed during the Closure process.

This sales person needs 589 names in their personal Klpz account in order to meet their goals.

The above calculations are for a single sales person. Let's assume that all members of the sales force look the same. If you know the number of suspects in your marketplace, the next calculation can determine how many suspects are not assigned to the sales force. You can now discuss who is accountable for the entire list of suspects.

In this example, there are 6696 targets unassigned. Accountability for pursuit of that group should be discussed. It may be that you can segment your market into niches based on value of the order, giving the sales team the high value niche to prospect. There are several options to consider in the pursuit of the various niches, including inside sales reps, marketing programs to look for leads, or simply hiring more sales people.

In Klpz, you can assign goals, which are measured in Steps: First Steps and Total Steps.

  Note: Even though we call the process cold calling; we are actually prospecting. Therefore, a Step in your prospecting cycle can include actions that are not Phone Calls. Therefore Klpz does not assign goals based on Phone Calls. Phone calls are tracked in the Core Report.

For instance, if your ideal cycle starts with a sales person stopping by the target's office, that would be the First Step. Or, if you use the Klpz video option, you might want to send it during the cycle without a prior phone call. This is a smart step, but does not require a Phone call. You want the sales person to put the suspect through a quality prospecting process, and every component does not have to be a phone call.

* " A First Step signifies the beginning of the pursuit of a suspect. Each caller should have a specific goal for how many new suspects they will begin to pursue on a daily basis.

* " The Total Steps is a measure of overall activity by a caller. Each step does not have to include a call, but each step is movement forward in the process to achieve "success." The First Calls are counted as part of the Total Step goal.

The question then becomes how many First versus Total steps a caller should be able to take in a day.

The direct driver for setting goals for First Call and Total Steps is time; specifically, time committed to the calling process. In our example, the caller is committed to 30 minutes a day of prospecting.

In the calculator, the assumption is that, using Klpz, a caller can take a step every 2 minutes. The calling process has 5 steps, but on average you are doing 3.5 before reaching Closure.

While most companies don't view them in this fashion, their list of suspects is a company asset. When you think about it, your potential customers (suspects) in aggregate represent the value of your marketplace.

You can do a more sophisticated approach by niche, but at the end of the day, averages will give you good insight. The real value of this calculation is to generate some thought as to "where is my sweet spot of suspects" and do I have good contact information for whoever is accountable to secure that account.


This calculator is built in Excel and is available at no charge upon request to bhoward@klpz.com.