Sales strike rate is another fine component apart from sales velocity and sales productivity, which defines the sales performance of a sales person. The reason we have placed it as a separate component is because, technically speaking you can have a good sales velocity (turnaround time from initiation to sales closure for every sale closed) OR sale productivity (sales units and value per sales person per period of time), but still a low strike rate in terms of %age of sales leads, which finally resulted in sales closure.
In other words, the sales strike rate is the % of leads, which get converted into sales.
One may ask a question on 'why sales strike rate is important, as long as the sales productivity and sales velocity expectations are met?'. it is agreed that sakes strike rate comes after the other two in terms of importance. However, there is a merit to watch out this parameter, as it talks about the opportunity of enhancing your sales performance. For example-:
- It can help identify some systemic problems in your sales process.
- It helps you to reduce the bad publicity, as some of the failed sales are due to our lack of fulfillment of commitments.
- It can help you better leverage the investment behind lead-generation.
- It surely reduces the sales expense. Every failed sale lead has expenses.
Sales strike rate has the following success drivers/influencing factors:
- Quality of leads: Quality of leads in terms of being warm leads, reasonable information about the prospect, and high value (larger ticket size) and high confidence leads (higher probability of conversion)
- Sales Velocity: This is covered as a separate topic. A higher sales velocity (turn around time to convert a sale), is generally linked to higher sales strike rate.
- Sales density: A lower sales force density, may lead to higher sales productivity (lesser number of sales people pursuing same customers), but lower sales strike rate. This is because, as a sales person may be following up on higher number of prospects leading to lesser strike rate. For example- 10 sales person pursuing 100 customer vs. 20 sales persons pursuing 100 customers, you will find a higher sales strike rate in second case, even though the sales productivity and sales velocity may be higher in first case.
Measures for sales strike rate
- Number of sales leads.
- Number of sales leads closed.
- No. of sales units.
- Amount of sale value
KPI-Metrics for strike rate of sales
- %age of Sales leads converting into sales
Dimensions/Attributes on which you can analyze sales strike rate
- Business unit
- Sales Leads Source
- Sales Lead Value category
- Lead Confidence Category