New Numbers Sales & Ops leaders need to know in 2020
9 Minute Read
Sales and Ops leaders swim in a world of numbers. What is your, At-plan? Forecast? Current pipeline? CAC? ...and it goes on from there. What isn’t so obvious is what can actually be done by knowing each of these numbers on a day-to-day basis. Enter Meeting Math, a new set of numbers for sales and ops leaders that have been developed explicitly to be actionable.
Meeting Math, as developed by Kronologic, is focused on two metrics, Avg. Value Per Meeting and Lead Deficit.
Avg. Value Per Meeting
Avg. Value Per Meeting measures the value that is actually on the line when a sales meeting happens. You only need three metrics to calculate yours:
1. Average Contract Value or ACV – what is a given avg. new deal worth to you over the course of a year? =
2. Close Rate – what is your avg. rate of close from qualified opportunity to Closed Won
3. Meeting Conversion Rate – what is avg. your rate of conversion from qualified meeting to qualified opportunity - if you have 10 first calls with qualified prospects, how many of those will become qualified opportunities?
Now put those together in this simple equation:
ACV • Close Rate • Meeting Conversion = Avg.Value Per Meeting
For example, if you have an ACV of $50,000, a close rate of 0.25 and a Meeting conversion rate of 0.50, your equation is
$50,000 • 0.25 • 0.50 = $6,250 Avg.Value/Meeting
Once you know your Value Per Meeting, you can measure in real-time how much sales value is in your sales team’s calendar. In other words, it’s a leading indicator of sales production unlike bookings or even pipeline; which are lagging indicators. If the totals of your Value Per Meeting are low for this month or even this week, you need to increase lead gen and top of funnel efforts asap.
Beyond sales and ops leadership, what does this metric do for the other stakeholders involved like the sales rep and the prospect?
For the sales rep, they can now ask themselves:
- Am I preparing properly for a call worth $500? How about a call worth $5k?
- Should I plan for different levels of preparation for each?
- Finally for the prospect, are they receiving $X worth of value during the meeting? If a given meeting is worth $5k to the company doing the demo – Is that company providing $5k worth of information in that call?
This is an opportunity for sellers to make sure they are bringing industry insights, relevant benchmarks, and specific prescription to make sure that the prospect receives value from the meeting that is in line with how valuable the prospect is to them.
"Are you bringing $5k worth of value to every call?"
The other important metric in Meeting Math is Lead Deficit; which is the quantification of The Last Mile Problem - How many leads (created by different marketing activities) never actually convert to sales meetings?
If sales and marketing are each their own sovereign nations, then their national shared border is the space between qualified leads and actual sales meetings. Is it a common scenario where marketing says something like, “We generated more than 1,000 leads this month across our demand gen activities; which puts us at 30% over-achievement on our goals,” but in the same QBR, a sales leader will say something like, “With pipeline growth at only 50% of our target, sales has had to work extra hard to only miss our sales goals by 20%.”
What is behind these two different narratives on the same revenue team performance? The Last Mile Problem.You quantify your own last-mile problem by calculating your Lead Deficit for any given lead channel you have. Here is the equation:
(Total Leads - Meetings booked from those leads) • Avg. Value Per Meeting
For example, If your company is generating 300 webinar and event leads per month, but you are only booking 34 meetings from event leads in a given month while your Avg Value Per Meeting is $6,250 (from the previous example) your #’s are:
(300 - 34 = 266) • $6,250 = $1,662,500
In this example, you are leaving $1.6 Million on the table every month from just event and webinar leads. If you run the lead deficit calculations for different lead channels, you can now prioritize where you need additional resources, human or technology, that can help you convert more of those leads into meetings, opportunities, and revenue.
Meeting Math Podcast:
Recently I was featured with my cofounder on an episode of the Advanced Selling Podcast, in EPISODE #576: HOW MUCH IS EACH OF YOUR SALES MEETINGS WORTH? It's a great interview, Bill and Bryan do a great job. Really worth a listen.
Meeting Math Questions: please let me know, email@example.com
Kronologic solves the last-mile problem for Sales and Marketing in the enterprise. As the world's first Active Scheduling Platform and Calendar Monetization Engine, Kronologic allows sellers to be omnipresent, ensures a great buyer experience and allows Marketing to get data they’ve never had before.
Sitting between the CRM and the calendar, Kronologic listens to timing signals that a prospect or account is ready to speak with Sales and then goes to work on behalf of the seller to lock in a meeting. To the buyer, it feels like a company and a seller that are in tune with their needs, to the sales rep, if feels like magic: they walk into work with meetings already confirmed on their calendar. All they have to do is show up and do what they do best.