If you're in the consulting business, you've likely heard the saying, 'Your sales funnel is your business.' But how do you really know if your funnel is doing its job? You might have a steady stream of leads, but if they're not converting into high-paying clients, your funnel could be leaking valuable revenue.
Objective Sales Funnel Tracking Metrics
Imagine if, instead of guessing, you had a clear, objective way to measure every stage of your sales funnel—ensuring it attracts, engages, and converts the right leads every time. In this blog, we're going to drill down into the sales funnel key metrics that can turn your sales funnel from a mystery into a precise, revenue-generating machine.
Sales Funnel Quality Metrics
Below is a breakdown of how to compute or determine each of the sales funnel quality metrics, with formulas provided where applicable. Knowing these is critical to knowing and reducing your customer acquisition cost. That's why you need to track sales funnel metrics using a real-time CRM, such as Hubspot's CRM. They also provide a pretty good road map to where you need to focus your marketing efforts. Each of these sales funnel metrics provide actionable insights.
Conversion Rates at Each Stage of Your Sales and Marketing Funnel
Lead Capture Rate:
Lead Capture Rate = Number of Visitors
Number of Leads Captured*100
Your success at capturing leads comes down to creating the right marketing campaigns to attract and convert your ideal customer. It means having a strong brand known by your prospects. Absence of brand awareness can undermine even the most meticulously crafted sales or marketing strategy.
Qualification Rate:
Qualification Rate = Number of Qualified Leads
Number of Leads Captured* 100
Your sales team is critical to coming to an agreement with your marketing team as to what a qualified lead is.
Proposal Acceptance Rate:
Proposal Acceptance Rate= Number of Proposals Accepted
Number of Proposals Sent* 100
This metric is greatly affected by the ability of your sales and marketing teams to work together to deliver professional proposals that help turn tire kickers into paying customers.
Closing Rate:
Closing Rate =Number of Closed Deals
Number of Proposals Sent* 100
This is probably considered the key sales performance metric by sales managers and business owners.
Time Metrics
Time to Conversion:
Time to Conversion = Total Time from Initial Contact to Close for All Leads
Number of Leads Closed
Sales Cycle Length:
Sales Cycle Length= Total Time from First Contact to Close for All Deals
Number of Deals Closed
Stage Duration:
Calculate the average time leads spend in each funnel stage by tracking the duration from when a lead enters a stage to when it exits.
Cost Metrics
Cost Per Lead (CPL):
CPL = Total Marketing Costs
Number of Leads Captured
Cost Per Acquisition (CPA):
CPA =Total Marketing and Sales Costs
Number of Clients Acquired
Customer Lifetime Value (CLV) vs. CPA:
CLV Calculation:
CLV =Average Revenue Per Client * Average Client Lifespan
Compare CLV to CPA by calculating the ratio:
CLV/CPA Ratio=CLV
CPA
Lead Quality
If you've ever heard "the leads are no good", then you will need to pay particular attention to these metrics - if you want to know whether or not that is true.
Lead Scoring Accuracy:
Lead Scoring Model: Use historical data to assign scores to leads based on characteristics that predict conversion likelihood. Accuracy can be determined by how well the score correlates with actual conversion rates.
Client Retention Rate:
Client Retention Rate = Number of Retained Clients
Total Number of Clients * 100
Referral Rate:
Referral Rate = Number of New Clients from Referrals
Total Number of Clients *100
Engagement Metrics
Content Engagement Rate:
Measure by tracking specific metrics such as clicks, shares, and time spent on content relative to total views or impressions.
Email Open Rate:
Email Open Rate = Number of Emails Opened
Number of Emails Sent *100
Email Click Rate:
Email Click Rate = Number of Clicks on Links in Emails
Number of Emails Sent *100
Webinar/Consultation Attendance Rate:
Attendance Rate= Number of Attendees
Number of Registrations *100
Revenue Metrics
Average Deal Size:
Average Deal Size = Total Revenue from All Deals
Number of Deals Closed
Revenue per Lead:
Revenue per Lead = Total Revenue
Total Number of Leads
Pipeline Value:
Sum of the potential revenue from all active opportunities in the sales funnel.
Client Satisfaction Metrics
Net Promoter Score (NPS):
NPS Formula:
NPS = %Promoters - %Detractors
Promoters are those who score 9-10, and Detractors are those who score 0-6 on a scale of 0-10.
Client Feedback Scores:
Collect and average client ratings or scores on various service aspects (usually through surveys).
Funnel Health and Efficiency
Funnel Leakage:
Funnel Leakage = Number of Leads Lost at Each Stage
Total Number of Leads Entering That Stage * 100
Bottleneck Identification:
Determine by comparing the time spent in each stage and the conversion rates; stages with unusually high durations or low conversion rates indicate bottlenecks.
Automation and Process Efficiency
Automation Success Rate:
Automation Success Rate =
Number of Leads Successfully Nurtured by Automation
Total Number of Automated Leads * 100
Follow-Up Response Time:
Measure the average time between lead capture and the first follow-up contact.
Market Alignment
Target Market Fit:
Determined by the percentage of leads that match your ideal client profile and convert into paying clients.
Message-Market Match:
Assessed by the resonance of messaging through metrics like engagement rates, conversion rates, and client feedback.
These formulas and methods provide a quantitative basis for evaluating the effectiveness of your sales funnel, helping you to identify areas of strength and opportunities for improvement.
Track Your Sales Funnel in CRM
Almost all (but not every) metric of your sales funnel mentioned above can be tracked in Hubspot's CRM. But for service based businesses, who often submit very complex proposals, at great cost, you can set up your sales funnel to track all critical parts of your sales funnel.
Conclusion
Understanding and tracking the right sales funnel metrics can mean the difference between having a thriving consulting business and one that’s constantly struggling to close deals. By focusing on these key indicators, you can streamline your funnel, increase conversions, and ultimately, boost your revenue. But mastering these metrics and optimizing your sales process can be complex. That's where we come in.
Inbound Sales Consulting Services
Our Inbound Sales Consulting services are designed to help you refine every stage of your sales funnel, ensuring you attract, engage, and convert the right leads. Ready to take your sales funnel to the next level? Contact us today to learn how we can help you achieve measurable, impactful results.
