Five essential metrics for creating a business development plan
Implementing a business development plan without planned metric tracking is a dangerous game to play. Without tracking key metrics, you won’t have any way of knowing whether you’re wasting your time trying to develop new business opportunities where no opportunities exist. When you track the right metrics, however, you’re able to adjust and improve your business development plan based on how it performs.
We’ve identified five essential metrics that you need to track when creating a business development plan:
1. Lead-to-customer ratio
The lead-to-customer ratio refers to how many leads you need to generate each month in order to meet your monthly sales targets. Once you know this ratio, you’ll know how many leads need to enter the top of your sales funnel each month. This metric is vitally important; if too few leads enter the top of your sales funnel, there’s nothing you can do to make your business development plan successful. Without enough leads, you simply won’t be able to convert enough customers.
2. Length of the sales cycle
This metric looks at how long it takes to close a deal, from first contact with a lead to the point of purchase. This is important as it dictates how far in advance you need to be getting new leads into the top of your sales funnel in order to meet your monthly sales targets. For example, depending on the length of your sales cycle, a dip in lead generation now could affect your business development revenue target immediately, or only in three months’ time.
In addition, knowing the length of your sales cycle helps you plan a calendar of activity for closing a deal. For example, how often do you need to check in with a lead, send new information or do a presentation during a sales cycle?
3. Channel effectiveness
It’s important to know which channel is the most effective when implementing a business development plan. If you know which channels get the best results, you can ensure that your business development plan is optimised for those channels. For example, this metric will dictate whether you should spend more time attending conferences or communicating with potential customers on social media.
4. Best time for closing deals
Statistics will show that there is always a time of day, day of the week and time of the month that is most effective for calling new leads or calling existing leads to close a deal. Knowing this metric will allow you to increase the probability of closing deals by scheduling your sales calls for these days.
5. Profitability versus revenue
It’s important to know that you are actually making a profit, as opposed to just generating revenue. Having a business development plan that relies heavily on giving discounts and under-cutting your competitors could be more detrimental than not having a business development plan at all. Furthermore, you need to know what percentage of your total revenue is profit. If your profit percentage is too low, you need to change your business development plan. After all, if you could make the same profit simply by investing you money, why bother going to the effort of doing business at all?
Author: Graeme Wilson
Image credit: accessible business