• David Marsh

PreSales Metrics that Matter

When building and scaling a high performance sales engineering team, you must identify metrics that matter. By “matter”, I mean metrics that drive revenue and revenue generation behavior. So called “vanity” metrics are a distraction and a waste of time, so you need a process to determine what drives value in your organization. 


Revenue teams need actionable metrics that drive behavior. For a solution consulting team, we need to know how much activity is going on in order to optimize the balance between expensive headcount and the number of deals that we can support in any given revenue cycle. More importantly, we need to know if the activity levels are effective for the target win rate we want and what variables impact the win rate (or conversion rate, if you prefer).

People are not machines, so utilization rate needs to be balanced against the quality of the work you are looking for. In our case, if we want higher quality demos, we need higher quality preparation and customization. More preparation means more time investment on the front end, so you need to figure out how many hours of prep are warranted for a 45 minute or 1 hour demo on average.


Define what is important to your revenue team


Leading indicators are roughly predictive measurements that show things in advance of events like conversion, and tend to change frequently. Lagging indicators are process output measurements and generally speaking show outcomes from your process. As an example, think of a car speedometer and odometer. The speedometer (leading indicator) shows your current speed in Mph or Kph and gives an estimate of how long it will take to reach your destination based on your speed. The odometer (lagging indicator) shows the total distance traveled only after your destination is reached, so it is an output after the event (the journey). 


Results are more valuable than activity, because you can be super busy and not achieving your desired goals. Activity is an important metric because it can give you a leading indicator of your pipeline health, but it is not enough by itself. Activity rate can drive bad behavior if you are chasing any deal with a pulse and not bailing out of opportunities that are not qualified.


“What gets measured gets done” — Peter Drucker

Here are some example Metrics for Sales Engineers in SaaS: 

  • Customer facing activities by team

  • Win rate by team  

  • ARR by team


You need to be able to show these down to the individual SE level, but aggregating at a team level is the default. Tracking customer facing activity is a leading indicator for pipeline health (assuming the opportunities are qualified). Tracking Win Rate (lagging indicator) is essential, but there tends to be lots of noise around the signal. Tracking ARR by team (lagging indicator) gives you a good sense for Annual Recurring Revenue influenced by the team, but you need to be able to compare the deals where SEs are not involved to get the bigger picture. 


Tracking your Win Rate or conversion rate is difficult, but rewarding. Here's the equation:


Win Rate = number of deals won / total number of opportunities


It looks simple, right? It’s not.


It is difficult because there are only a few reasons to win deals, and lots of reasons to lose deals - and tracking that is a challenge. How will you measure the fact that you lost was because the deal was not properly qualified? Who gets to make that call? This is where alignment between the SC team and the sales team becomes critical. 


Keep in mind that your tools influence your metrics. If you are using Salesforce, you have to actually put meaningful notes in the opportunity, and you have to have the right custom fields or values available to track the reasons you won or lost the deal. If you are savvy with Excel or other BI tools, the world is your oyster, but most of us work with canned metrics in Salesforce or another CRM. This highlights the need to understand what is important to your team and how to effectively measure things that drive that behavior. 


Create Team Dashboards


Dashboards are a key tool to visually check status in an efficient way. A dashboard is a visual

collection of charts and / or metrics (KPIs) that you can see at a glance to understand the state of your business. The ability to drill down and understand the underlying data is a requirement. Having a friend or contact in sales operations (SOPs) will save you time and ensure that you are using the correct data.


Find a dashboard tool that integrates with your sales system. A common example is something like Grow or Domo, that can take input feeds from Salesforce or the C


RM of your choice. You can always use the default reporting in Salesforce, but third party packages will give you additional flexibility and options. 


My team dashboards show the KPIs I explained above (Activity by Team, ARR by Team, and Win Rate by Team) broken down into a Month to Date, Quarter to Date, and Year to Date views. This helps me easily see if we hit targets for revenue, see the health of activity, and see who is influencing the most revenue. 


Make It Happen


Now that you have defined what is important to your team - your KPIs - and created dashboards for visual status, you can start optimizing for results. You can see the flow of deals through your funnels and start to understand which adjustments will yield the biggest improvements if you start to test those adjustments. Start by investigating the ASP (Average Sale Price) and determine what your threshold deal size should be for SC support. Early in company lifecycle you can support almost anything, but as the company grows, you will have to decide how to allocate limited resources in most cases.In the next article we will talk about aligning with other teams that either drive or retain revenue. Solution Consulting / Sales Engineering teams work closely with the inside sales teams, field sales team, and the services teams that implement and support customers. The more friction that exists between the teams, the less energy and focus you have for customers. 


In the next article we will talk about aligning with other teams that either drive or retain revenue. Solution Consulting / Sales Engineering teams work closely with the inside sales teams, field sales team, and the services teams that implement and support customers. The more friction that exists between the teams, the less energy and focus you have for customers. 



David is currently Vice President, Global Sales Engineering at MRI Software.


Connect with David on Linkedin.

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