The numbers never lie. It’s a lesson I learned back in the early days of my entrepreneurial career. As the business owner, I was excited to share with my husband all of my “wins”. As an accountant, he wanted to know what they meant to the bottom line. After about the tenth time I had said, “I met with so-and-so and they’re interested in working with me, too,” he said, “that’s nice, but how much money do you have in your pipeline?” Uh, pipeline? What’s a pipeline?
The numbers never lie, is a lesson I’ve never forgotten. And over the years since that first business, I’ve applied this philosophy to so many business cases: sales pipeline, statistical data around close rates and time to close, numbers around marketing and advertising campaigns and conversion rates. The numbers game keeps us honest and keeps us focused. We can tell ourselves that we’re doing well, but if the numbers don’t support that story, it’s time to take notice and potentially make a change. Sometimes that’s a big change – like a change to our market segment, business model or sales and marketing strategy.
Today on ‘Take Action Tuesday’, here are a few steps you can take to check your numbers:
Review Your Sales Pipeline
First off, do you have a sales pipeline. This can be as simple as an Excel spreadsheet that lists the prospect, project, potential revenue and confidence rating. For example, ABC Company, 10 widgets, $10,000, and I’m 50% confident they’ll buy. Then, calculate the amount ($5,000) and sum the total of all of your deals in the works. When you track this data across the board you’ll see how much potential money is sitting there waiting for you to close it. This information can be very motivating.
Get Clear on Your Sales & Marketing Strategy
Strategies are great. We’re even offering a class next week – 7 Crucial Elements to a Powerful Marketing & Sales Formula – (you really should attend). But, how do you know your strategy is working if you’re not tracking specific metrics and then measuring them against where you want to be. For example, if your close rate is 10% and you want to close 100 customers by the end of the year, you need to talk to 1,000 customers. How many have you talked to so far? It’s the beginning of the 2nd quarter, so you should have talked to at least 250 prospects and turned 25 of them into paying customers.
Lose Your Assumptions About What the Numbers Should Say
We often make assumptions about the story the numbers should tell us. I have five customers with annual revenue over $1 billion, and 10 customers with revenue of $100 million. At first glance, we might think that the numbers tell us that our $1 billion customers are our best customers. However, if you run the numbers you may find out that not only do they spend less money annually with you, they’re also more difficult clients to have and cost more to maintain.
Hope to see you soon over here at ASU Chandler Innovation Center.