A common mistake companies make, which I have seen often, is their focus on the tail end of the Revenue Realization Cycle (RRC) such as closing ratios, sales cycles, and forecasting what will close this quarter, while neglecting to track and measure all the upfront work that needs to be done prior to these stages. Champion boxers say that the fight is won in the gym, not in the ring. This means that if they adequately prepare for a fight and are in great shape, they have the best possible chance of winning the fight.

In the same way, companies that measure only the tail-end of the RRC are basically entering the ring unprepared and expecting to win the fight, by just trying hard. Unless they have very short sales cycles (less than 1-2 weeks), their ability to impact the current quarter’s outcome is minimal.

For companies that have sales cycles longer than 30 days, the battle to achieve quarterly revenue targets actually started the previous quarter. If they didn’t start last quarter, they most likely will lose the battle this quarter.
If you don’t know your Funnel Math (how many impressions you need to generate qualified leads that result in your quarterly revenue targets—as well as how long it takes to do these), you don’t know what to measure to support revenue objectives.

DEMAND GENERATION
How many impressions (touches, including number of emails, direct mail, ads, etc.) will it take to get to the optimal number of raw leads to get to the right number of warm leads to hit your revenue target? Once you know the number of impressions required, you will need to understand the conversion ratio of Marketing Qualified Leads (MQLs) and Sales Qualified Leads (SQLs). Are your MQL-to-SQL ratios 10%, 5% or less? Knowing these numbers are essential elements for creating successful demand generation campaigns and building an SQL funnel or pipeline.

SQL FUNNEL
How many dials, on average, does it take to get a conversation with a decision maker? Who cares? At the end of the day, if your Teleprospecting team isn’t having daily conversations with decision makers, you aren’t going to build a sales pipeline or generate revenue. There are tools out there that track phone connects or enable your Teleprospecting team to “log a call”. In general, these tools are good and can support the day-to-day management of your Teleprospecting team. Your team must make a minimum number of daily dials to reach decision makers. However, we recommend that you focus on the number of conversations that Teleprospectors have with decision makers, each day, because conversations with decision makers move the sales process forward. Call logging tools don’t track that kind of data. You will need to build this process into your CRM. It keeps Teleprospectors on their game and gives managers insight into the activities that matter.

MQLs take time to be nurtured and developed before they become SQL’s. Therefore, you’ll need to build an SQL pipeline to support the Sales pipeline. Most companies have no concept of an SQL pipeline, which is usually 4 times the SQL quota (25% of SQLs convert to sales pipeline. You’ll need MQLs and callers to build an SQL pipeline. These are the front-end Revenue Realization Cycle numbers you will need to track, measure, and know very well.

Make sure that you have an SQL quota for each Teleprospector and track the SQL funnel, regularly. Track your SQLs through the sales funnel to get an accurate picture of your SQL-to-Closed Deal ratios. Knowing these RRC numbers will help you meet revenue targets.