Sales and Ops leaders swim in a world of numbers.
At-plan? Forecast? Current pipeline? CAC? It goes on and on.
But what should you do with these numbers on a day-to-day basis?
Enter Meeting Math, a new set of numbers for sales and ops leaders, which are actionable rather than conceptual. Developed by Kronologic, Meeting Math focuses on two metrics: Average Value Per Meeting and Lead Deficit.
Meeting Metric #1: Average Value Per Meeting
Average Value Per Meeting measures the value that is on the line when a sales meeting happens.
You only need three metrics to calculate this:
ACV: What is a given new deal worth to you, on average, over the course of a year?
Close rate: What is your average rate of close from qualified opportunity to Closed Won?
Meeting conversion rate: What is the rate at which you convert a qualified meeting to a qualified opportunity. In other words, if you have 10 first-calls with qualified prospects, how many of those will become qualified opportunities?
Now put those together in this simple equation:
ACV x Close Rate x Meeting Conversion Rate = Average Value Per Meeting
For example, if you have an ACV of $50,000, a close rate of 0.25, and a meeting conversion rate of 0.50, your equation will look like this:
$50,000 x 0.25 x 0.50 = $6,250
Your value per meeting is $6,250.
Once you know your Value Per Meeting, you can measure how much sales value is in your sales team’s calendar in real-time. This is a leading indicator of sales production, unlike bookings or pipeline — which are both lagging indicators.
If the totals of your Value Per Meeting are low for this month, or even just this week, then you need to increase lead gen and top-of-funnel efforts ASAP.
Beyond sales and ops leadership, what does this metric do for the other stakeholders involved, like the sales rep and the prospect? For the sales rep, they can now ask themselves:
- Am I preparing properly for a call worth $500? How about a call worth $5,000?
- Should I have different levels of preparation for each?
- Is the prospect receiving $X worth of value during the meeting? If a given meeting is worth $5,000 to the company doing the demo, is that company providing $5k worth of information in that call?
This is an opportunity for sellers to make sure they are bringing industry insights, relevant benchmarks, and specific prescription — so the prospect receives value from the meeting that’s commensurate with their value to the seller.
Meeting Metric #2: Lead Deficit
Average Value Per Meeting is a useful number on its own, but it has even more value in helping you calculate the other important metric in Meeting Math, lead deficit.
Lead deficit is the quantification of the Last Mile Problem: How many leads (created by different marketing activities) never actually convert to sales meetings?
If sales and marketing are each their own sovereign nations, then their national shared border is the space between qualified leads and actual sales meetings.
It’s common to hear marketing says something like, “We generated more than 1,000 leads this month across our demand gen activities, which puts us at 30% over-achievement on our goals,” but in the same QBR, a sales leader will say something like, “With pipeline growth at only 50% of our target, sales has had to work extra hard to only miss our sales goals by 20%.”
What is behind these two different narratives? That is the Last Mile Problem.
You quantify your own Last Mile Problem by calculating your lead deficit for any given lead channel you have. Here is the equation:
(Total Leads – Meetings Booked From Those Leads) Average Value Per Meeting
This tells you how much money you’re leaving on the table by failing to convert those leads.
For example, if your company is generating 300 webinar and event leads per month, but you are only booking 34 meetings from event leads in a given month, while your Average Value Per Meeting is $6,250 (from the previous example), your numbers are:
(300 – 34) x $6,250 = $1,662,500
In this example, you’re leaving $1.6 Million on the table every month from just event and webinar leads.
If you run the lead deficit equation for different lead channels, you can identify what you need to prioritize and where you need additional resources (human or technology) to convert more of those leads into meetings, opportunities, and revenue.
Lead Deficit in Different Channels
At Kronologic, we calculate lead deficits all day, every day, as we prepare prospect proposals. Here are some of the top trends we’ve discovered from sales and marketing leaders.
Event & Webinar Lead Deficits: Typically there is at least $1 Million+ in lead deficit from event leads. It’s common that 80% – 95% of these leads never convert to meetings, and most leaders believe their team’s level of follow-up is too slow.
Cross-Sell Targets: Most companies have $10 Million – $100 Million of cross-sell lead deficit! Whoa!! Talk about low-hanging fruit.
Cross-Sell go-to-market strategies seem to be the most antiquated of any channel we see. Most sales and marketing leaders can’t even quote metrics on recent cross-sell campaigns.
OOO Demo Requests: Some sales leaders have made progress in getting demo request response time down to minutes, but how about the demo requests that arrive outside of business hours? Their conversion rate is typically much lower, and those lost leads add up over time.
Gated content leads: It’s common that 90%+ of these never convert to meetings, and leaders regularly admit that they aren’t being prioritized. However, that doesn’t mean there isn’t gold in there if you can assign technology or sales talent to work them properly.
Chat Bots: Commonly 50% – 90% of deanonymized chat leads (they have provided an email address) never actually convert to a meeting.
This is strange, when you think about it, because few people are quick to give a company their email address unless they are actually interested and engaged in a decision process.
What does this tell us?
These are average lead-deficits that are fairly common across various companies. If your lead-deficits in any of these channels is higher than the average, then it’s definitely ripe for improvement.
Back to You
There you have it, two actionable metrics that are easy to calculate and will transform the way you approach sales.
How are you measuring the sales value in your calendar? What are the leading indicators you watch most closely?