Sales are the fuel of your company. Benchmarking your sales process can help you fine-tune your fuel efficiency. Sales process metrics are especially helpful for full-service remodeling companies because they have a unique sales process. Unlike most other enterprises, prospective clients do not know exactly what they want. They may want a new kitchen or an addition, but before they can sign a construction contract you must clarify the project scope. Your sales process includes an intermediate design and planning step that isn't necessary in most companies.
The two systems I have found to be most helpful in managing and improving the sales process are a lead tracking system and a sales department time-tracking system. A good lead tracking system identifies the key steps in your sales process and tracks conversion rates from one step to the next, not just the overall conversion rate from initial inquiry to construction contract. The sales process for a design/build remodeler typically includes these steps: initial inquiry, qualification as target lead, a design agreement and a construction contract. Successful jobs are those that “convert” from one step to the next, following the entire path from initial inquiry through project completion.
The goal of your lead tracking system is to quantify your average conversion rate from each step to the next. How many inquiries are truly target leads? How many target leads sign design agreements? How many design clients sign construction contracts? Benchmarking against your previous performance provides a helpful basis for analysis and improvement.
The goal of your sales time-tracking system is to quantify average time needed for each step. How many hours does it take to qualify an inquiry and designate it as target or non-target — a phone conversation? One meeting? Two? How many “selling” hours to a signed design contract? What is the average time from inquiry to construction contract? Your company averages, compiled over time, yield valuable data. Uses for the data from these two tracking systems include:
- Refining your marketing. Is the ratio of qualified leads to total leads going up or down?
- Pinpointing sales process problems. Is your average conversion rate in any area slipping? Why?
- Identifying areas for improvement. Can you reduce time needed in any area of the sales process without sacrificing results?
Planning for growth. To increase the number of contracts by 30%, how many sales hours will be needed? The key to a tracking system is quality, not quantity. Focus on compiling only the most useful data and you'll be rewarded with valuable and usable information.