The phrase “the customer is king” is a sentence that resonates with all companies. The goal of every company is to have as many sales as possible. This is why customers and sales go hand in hand, there wouldn't be one without the other. As a result, tracking your prospect's journey and their behavior is very important for your sales. To get the full overview of your prospect’s and customer’s journey, you will use the sales funnel. Read on to find out everything you need to know about the sales funnel and its report, and which KPI to use.
What is a sales funnel?
To know what is sales funnel reporting and why you need it you need to first know what a sales funnel is. The sales funnel is the term used to describe all the phases your prospects go through when deciding to buy your product or service. How many stages you will have in your sales funnel depends on your company and your product/service. In general, there are 4 stages in the sales funnel starts with awareness, then interest, decision, and ending with action. In order to keep up with what is going on in all stages you need a sales funnel report. A sales funnel report is an analytical way of tracking your sales process. Keep on reading to find all of the benefits of sales funnel reporting!
Why is sales funnel reporting important?
Sales funnel reports show your customers throughout the sales funnel phases. Having this data gives you so much value to your strategy and your operations. Here are all of the benefits of sales funnel reports:
- You can easily see how many leads are being generated, what deals are being negotiated, what is being finalized, and how many sales you are getting.
- Gives you insights into how customers found your company, why they decided to go through the rest of the phases, or why they decided not to continue with the rest of the phases ➡️with this data you will see your conversion rates and how effective your marketing strategy is.
- You will gain comprehension of your success rates, strengths, weakness, and progress over time.
- You will see how much value each phase holds and how value moves between phases - with this, you will know what needs to be prioritized.
What KPIs you should track in your sales funnel?
In order for you to get the maximum of your sales to funnel you need to track some related KPIs. They will help you in creating and track your goals and also help you in measuring and improve your sales funnel overall. Here is a short list of KPIs you must track.
Leads
It makes sense that if we are talking about the sales funnel we are gonna mention leads as this is essentially what the sales funnel is all about. With leads tracking you are making an impact on almost every aspect of your sales and marketing strategy. There are different types of leads so don’t track only one type, the more you track the richer your data is gonna be. Here are some of the most valuable KPIs related to leads:
Lead Generation
Lead generation is an essential sales funnel KPI that is usually used for top-of-the-funnel activities. In short, it tells you how many new customers you get in the funnel in a specific time period. The reason why this KPI is so important is that with it you can determine what is your next move in your campaign. Lead generation tells you how effective your efforts are and how much awareness you are actually attracting. This KPI is also very useful if you are trying to generate leads from multiple channels since it provides an overview of each channel’s performance.
Lead Attrition
Lead attrition is a metric that tells you how many of your leads left you. There are many reasons why your leads may “exit the funnel” from concerns over cost, accidentally signing up, or opting for a competitor. By tracking lead attrition, you can more easily figure out problems in your sales process and from there you can make improvements.
Cost per lead (CPL)
Cost per lead focuses on how much it costs to get a new customer so it tells you how financially-effective your mark efforts are when it comes to bringing new leads into your sales funnel. The purpose of this metric is for you to understand how much you can afford to spend on your new leads and to give you important data for ROI marketing calculations.
Lead quality
Lead generation will tell you how many new leads you get but not every lead will turn out valuable. That’s why you need to use the lead quality metric to determine the number of actually interested leads. These leads are now considered prospects since they are deemed likely to buy. Your goal is to have a high number of quality leads. It indicates that your marketing efforts are working. After all, there is not much point in having a high number of low-quality leads - it will only bring you low conversion rates and high bounce rates.
Some lead quality metrics that you can track to help you with that are visitors’ leads and leads to opportunities. One useful way to measure lead quality is through the Lead to Opportunity metric. This metric tells you the percentage of leads that become sales-ready leads. Leads to Opportunities put in context your lead quality metric by informing you how well-qualified leads actually are.
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Customer Lifetime Value (LTV)
Customer Lifetime Value measures how much money you will get from a customer throughout their relationship with your company. Your LTV metric is working alongside your CPL metric since you need to know how much you will earn from a customer in the time that they decide to stay with you so that you can know how much you can invest in your marketing in order to be able to attract potential leads in the first place.
Conversion rate
Conversion rate is a metric that gives you an understanding of how good your strategy is from taking your leads from the top of the funnel to the bottom. By tracking this metric, you will gain an understanding of how profitable your marketing and sales campaigns actually are.
Total Revenue
The definition of total sales is a pretty straightforward one. It tells you how much money you generate from all of your sales in a specific time period. This metric is fairly easy to understand and calculate but also rather difficult to improve. Knowing your total sales will help you with calculating your break-even point, and knowing how to increase profit margins, and is also an overall sign of business health.
Average Deal Time
Average Deal Time tells you on average how much it takes you to close a deal. It’s useful when you are trying to make plans and forecasts since you have a more thorough understanding of the sales cycle.
Sales funnel reporting with Plecto
In sum, reporting on your sales funnel is a must if you are trying to optimize your sales and marketing strategy. By now, you know that in order to optimize your performance you will have to analyze a lot of data that often updates in real time. Plecto’s automated reports feature does exactly that. Plecto’s automated reports update in real-time and you can set when you want your report to be exported to PowerPoint, Excel, or shared via email. Plecto also offers you a way to visualize and present your data to everyone with real-time dashboards.
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