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Lead Management: The 3-Headed Monster – Part 3

August 10, 2023
Lead Management: The 3-Headed Monster - Part 3

In this series so far, we have covered measuring leads and the famous saying, What gets measured gets done.”

Humans just experienced the hottest month in recorded history (July 2023). Should your HVAC company be busier during this heat wave? Very likely. The temptation is to believe, “We’re doing pretty well” and then forget to measure, when the boost to your sales numbers may simply be related to the thermometer. If you fail to measure, you’ll fail to train your salespeople and they will struggle when the weather isn’t in their favor.

We also covered qualifying leads, by discussing some of the topics to cover to prepare the customer for the sale.

Now we will cover some of the details for evaluating performance based on data gathered from leads. You will need to continuously monitor the progress towards your stated goals. Track key metrics, analyze the outcomes of your efforts, and make data-driven adjustments. Celebrate milestones achieved along the way, and use any setbacks as opportunities for learning and improvement.

Clearly Defined Goals

The days of crossing our fingers are over, hoping for next month to be better by some stroke of luck. Individual and team sales goals should be clearly defined and understood. The team should know how much progress they’re making when it comes to meeting their goals, and regular meetings should be held to make adjustments in numbers or to redefine expectations.

Which Metrics To Use?

One of the biggest weaknesses I see in small companies, not just in the HVAC industry, is failing to measure the basic units of business performance. Obviously, you’d want to measure your financial performance with your financial statements. You’ll want to measure revenue, gross margin, profitability, etc.

But we must not ignore the details of sales metrics. If you want a successful lead management program, it has to start with the nuts and bolts of sales performance.

Below are some of the basic numbers for measuring sales success. Modern statistics can sometimes drill down deeply into the numbers to find out which days of the week outperform others, what time of day is the most successful, and what color shirt to wear to make the best impression. I’m kidding about the last one, but for the sake of keeping it simple, we’ll just use the below metrics to kick things off.

  • Total Leads – The total number of leads taken by a salesperson for the month so far.
  • Number of Sales – The total number of leads a salesperson has converted to a sale.
  • Closing Rate – Number of Sales divided by the Total Leads, shown as a percentage.
  • Total Sales Revenue – Monetary total of all a salesperson’s sales for the month.
  • Average Sales Revenue – Total Sales Revenue divided by Number of Sales.
  • Revenue per Lead – Total Sales Revenue divided by number of Total Leads.

To show these numbers in a real world example, I’ll use metrics from a real salesperson named Dave. Dave’s numbers may not appear typical because he has taken my advanced training and is now a top performer in his company. His numbers for the first week of the month are as follows.

He has taken 13 calls and has closed 8, for a 61.5% closing rate. He has brought in $63,018 in revenue from those 13 leads, which means he averages $4847 in revenue per lead. And for those of you not tracking revenue per lead, you really should be.

In other words, EVERY TIME the lead coordinator hands Dave a sales lead, whether he closes it or not, Dave brings back an average of $4,847. Every time he leaves the building with a sales lead! When he does convert it to a sale, that sale averages $7,877! Is this someone you’d like to give all your leads to?! Absolutely, except there’s a better way (besides cloning).

If Dave’s doing some things that the other guys aren’t doing, we’ve got to identify exactly what. Just like anything else, find somebody who has what you want and do what they do. And if you do what they do, you’ll get what they’ve got. It’s simple, but not particularly easy.

Power of Observation

When managing your team, you should go on ride-alongs occasionally. You’ll discover one salesperson may be just a little bit better at describing the company’s value, thus tipping the sales odds in his favor. Another is better at convincing the homeowner that they really will stand behind the product and buy it back if anything goes wrong. Maybe a salesperson is trying to push the most expensive units in the lower-income neighborhoods, not getting many sales. Or pushing the least expensive units in the higher-income neighborhoods and leaving a lot of money on the table.

Making adjustments

Your sales team’s metrics should be reviewed regularly. Plan to hold monthly or quarterly sales goals meetings and inform everyone where the team’s progress currently stands. If an individual (or the whole team) is underperforming, this is the time to address taking additional training or reviewing the basics they were taught.

If you find everyone overperforming, talk about not letting the foot off the gas pedal and becoming complacent just because they’re ahead of projections. Incentivize with bonuses or some other way that lets them know it’s as much about them as it is the corporation/company.

Underperforming, overperforming or hitting the target exactly, this is where you can make adjustments to the team or to the numbers. If you’ve been charged with managing the sales team, there’s more to it than just signing off vacation requests. Your neck may be on the line, so it serves everyone well to pay close attention to the numbers and their meaning.

Discover and Track Patterns

This is where you can shine. You are able to see these sales numbers from an eagle’s perspective because you have the overview of the entire team. Patterns will show themselves over time. For individuals and for the whole team. How is a salesperson performing month over month? Is anyone showing improvement every month? You will find more than one “aha” moment, I’m sure.

One tip that’s not talked about much: analyze where the lead actually failed and why. Have your salesperson make a note about when in the presentation it turned to a no (if the sale was lost). It’s possible to find a pattern here and address it. Is the salesperson straying from the training? Was there too little or too much time spent building the relationship? Lack of persistence or attention to details? Did they walk through the sales hallway?

Try Having an Open-Door Policy

Salespeople struggle just like anyone else. Their numbers can fluctuate as much as the weather here in Colorado. Sometimes they will have a good week followed by a bad week, in which they changed nothing about their presentation. Circle of life, hakuna matata and all. Be available to listen and bounce ideas off each other. If the entire office’s numbers are up or down, there may be other external factors in play. If you live near the water during hurricane season, you know what I mean. Be an understanding boss, up to a point.

Here are a few additional topics to consider when managing a sales team:

  • How to reduce the cost per lead
  • Spiff/incentive program
  • When to continue working with a salesperson vs cutting them loose vs reassigning
  • How exactly to realistically set your sales goals? What information to use?
  • Rehashing leads (cannot stress its importance enough)

No one claims managing is easy, if it’s done well. There is a lot of responsibility on your shoulders, regardless of the company size. If you need additional help scaling your business into a powerhouse, contact us. I hope you found this information useful. Have a great week!