Lesson #3

# The Levers of Sales

## In this lesson, we’ll explore how to figure out which levers you should pull to increase your sales.

THE CHALLENGE

### Where should you invest your effort to increase sales?

With your Sales Formula in place, you now have a consistent way to understand what’s causing variability in your sales performance. To take this a step further, how can a dimensional view of your sales performance help isolate where you can get the best return on your effort? Let’s see how.

THE LESSON

### How to predict where to invest

As a sales leader, the clock is ticking and the pressure’s on when you have to hit your sales revenue goal. So which levers do you pull to increase your sales? How confident are you that it’s going to work?

In this scenario, data-driven sales leaders take the luck out of sales by uncovering key patterns in their sales data, making it possible to predict which investments get them the best return in a certain period of time.

So how can you make better predictions?

### Make thoughtful and targeted experiments

You want to be cautious about experiments you take to increase sales, as it’s possible any lever you pull could be beneficial or catastrophic to your sales growth.

For instance, if you increase the capacity of your sales team, you should see a boost in the number of leads worked. However, the new leads you work might be of lesser value, creating a negative impact on your average deal size and could slow your growth.

If you can target your experiments and segment exactly where you can find the lowest hanging fruit, your impact will be much more predictable with a lot less risk.

So where should you start?

### Recognize meaningful patterns

To determine which lever(s) are worth investing in, consider the wide variety of possible factors, or dimensions, that can influence whether you win or lose an opportunity.

For instance, if you’re an experienced sales leader or you’ve explored your sales data, it’s likely you’ve recognized patterns in how your team’s performance changes based on various dimensions.

How do you know which of these dimensions is really making a difference?

### Weighing the significance of dimensions

How much different dimensions influence the outcome of a sale can vary significantly, so determining the “weight” of these factors can help better predict the outcome of future deals.

If you are able to understand the weight of key dimensions, you will have a better idea of where you should focus your time and determine how you should balance your investments to reach your sales revenue goal.

To begin, you need to figure out where you should look for patterns in your sales data and identify key factors.

### Where you can find key dimensions

At a high level, you can generalize your sales strategy as a “Black Box,” with prospects as the input and “closed deals” as the output.

The “Black Box” represents the sales strategy you put in place to interact with your prospects, converting leads into closed deals in the most efficient way possible. Inside this black box are the people, processes and methodologies you deploy to help you accomplish this goal.

Under each of these categories, there are a wide variety of dimensions. You can measure the significance of each of these dimensions on sales performance.

Let’s show you how.

### How to dig deeper into a dimension and measure significance

To show how you can measure the significance of a dimension on sales performance, let's dig into the following example of a key dimension:

Lead Source: i.e. the way in which your prospect connects with your company and/or your offerings

In this diagram, we are digging into the prospect category to look at the variety of ways leads are sourced by channel. Under each channel, you can see a visualization of the sales funnel and notice how they vary from one another in terms of sales productivity and average deal size.

So why is this happening? How can we compare the differences among each channel?

### Compare sales productivity across Dimensions

As the illustration above shows, leads are not created equal. When looking at each channel using the Sales Formula, you can break down your sales performance and explore the number of leads you get from each source, how they convert at different rates, and the differences in average deal size.

In order to compare these channels and understand their “significance,” you would want to be able to measure how much value a lead from one channel produces versus another channel.

How can you figure out the value of a lead by a channel? How do you know which one is better?

### Calculate the value of a lead

Lead Yield is a simple way to compare the value of one lead versus another on an equal playing field. It normalizes how much value each lead produces.

You can calculate the “lead yield” with the following equation:

**Sales Revenue ($) / Leads Generated (#) = Lead Yield ($)**

For instance, if we wanted to compare the value of leads that come from “Paid Search” versus “Referrals,” we would calculate their respective lead yields and determine which source generates more value per lead. In this example, you can see referrals have a higher lead yield ($78) than paid search leads ($50).

So what could you do to boost your sales revenue? Where should you focus your effort?

### Use Lead Yield to re-evaluate how you currently invest your efforts

If you’re looking to increase your sales in a specified period of time, you can re-adjust your sales strategy and focus on the leads and opportunities that provide you the most value.

For instance, you might be over-invested in a lead source channel that has a low lead yield. Likewise, you might be under-invested in a channel that has a high lead yield.

To get a complete picture of how you might want to invest your efforts, you might consider factoring in the average length of time it takes to close a lead by channel, the cost of acquiring a lead by a source and the lifetime value of a lead by source.

The following example shows you how this might look.

INTERACTIVE EXAMPLE #1

### Lead Yield by Source

If you can calculate the lead yield by the dimension of lead source, you will be able to see the return on investment for a particular channel. With this in mind, how would you consider re-investing your time, money and effort?

Available in Keynote, PowerPoint and PDF file.

INTERACTIVE EXAMPLE #2

### Lead Yield by Source Visualization

In this visualization, you can see the distribution of channels by the average lead yield and average length of time it takes to convert that kind of lead. The size of the circle represents the percentage of total revenue you get from each channel.

If you had to increase your sales by 50% in a month, how would you invest your time, money and effort? How would that strategy change if you had a year?

Available in Keynote, PowerPoint and PDF file.

KEY TAKEAWAYS

### Lesson #3 Summary: The Levers of Sales

By exploring the key factors, or dimensions, and understanding their significance, you can start to figure out how to balance your efforts and focus your attention on the opportunities with the most value. To measure value, calculate the lead yield of various dimensions and see how they measure up and where you can take action to increase sales.

Lesson #4

# The Sales Genome

## In this lesson, we’ll explore how you can map and analyze all of your sales activities at scale.

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