With lead costs up, many home improvement companies are paying closer attention to sales productivity metrics such as presentation rates, gross close rates, and net close rates. How often are reps tracked?
Daily, says Greg Sliger, general manager of Prince William Home Improvement, in Northern Virginia.
TRENDS IN TIME
Many managers track those numbers every day and analyze them at weekly, monthly, and quarterly meetings with reps.
At the beginning of his day, Jake Jacobson, vice president of sales for Premier Window and Building, in Baltimore, hears from each of the 11 sales reps who report to him, explaining the disposition of the previous day's leads. Those results are logged into a database program called Dealmaker. For any given month or week, Jacobson knows gross and net close, as well as actual sales numbers. Tracking performance with that level of detail allows potential problems — such as slumps — to be immediately identified. It also creates a basis for sales projections. “The good thing about [daily contact],” Jacobson says, “is that if I talk to a rep who hasn't sold anything for five days, then I'm taking his temperature.”
FEED THE HOT HAND
Close numbers tracking also lets managers distribute leads to those most likely to bring back a contract. “As the cost of opportunities increases, we are much more stringent on lead allocation,” says Chris Edwards, president of Total Remodeling, in Union, N.J., “wanting to feed the ‘hot hand.'”
Gross close, net close, and average sale all factor in when leads get distributed. “If your salesman is averaging $4,500 per sale, you don't want to give him a lead that might come in at $25,000 because he's probably not going to sell it,” Jacobson says.
Prince William Home Improvement tracks sales metrics using MarketSharp and Excel software. Sliger says the company is currently running a 32% gross close, with 27% net close. “We are all about close ratio,” he says. “If a guy's maintaining a 45% close ratio for the year, he's got first dibs on leads.”
REVENUE PER APPOINTMENT
At many home improvement companies, the most important metric is net sales per lead issued (NSLI). “That takes all these numbers and combines them,” says Joey DiMicco, general manager of Renewal by Andersen of Grand Rapids, Mich.
At True North Home Systems, in Kennebunk, Maine, sales manager Brad McCrum says he tracks “how many opportunities, how many demos, how many gross sales, and what was the keep rate” each day. But, he says, “the one truly important number” is NSLI, on which the company bases its bonus system.
“Out of the leads we issue to a sales rep, we expect a certain amount of revenue to come in,” McCrum says. “That's the truest gauge of how well we're doing.”