When times get tough many companies are forced to focus in more on performance measurement. So it’s no surprise that the words that seem to be on everyone’s lips in the leads space these days are data, measurement, metrics and ROI. Every day a new company seems to pop up with a new way of guaranteeing lead “quality”, lead integrity or sales performance. But, despite the talk, many of these companies are still waiting in the wings for the metrics revolution to take place.

Why is this? We all know that it’s the bottom line that matters. And at the end of the day we know that profitability is dictated by the ability to purchase leads that turn into sales at some definable ratio. What we are really bad at though is properly defining what the key metrics are that help us behave in a way that creates an attractive profit per lead.

I believe that it is the following metrics that are most important in ultimately driving profitability:

Behavior metrics

Average Speed to Contact: The faster your salesperson calls a prospective customer, the more likely you are to close the sale. You need to monitor this because calling a customer 5 minutes after they have made an inquiry is good but leaving the lead to go cold for an additional 25 minutes typically results in a 2100% decline in your likelihood to close the sale.

Contact Attempts: Salespeople need to be persistent. If they are calling often, they increase their chances of connecting and are far more likely to be the first to contact the customer. The chances of closing a lead when you are the first to contact the customer are exponentially better. Don’t forget that the average lead is worked by 4-10 of your competitors.

Contacts Made: Salespeople who are working leads need the customer to pick up the phone. If your salespeople are making a lot of contact attempts and making relatively few contacts, you may need to find a new lead source!

Actions: This is a measurement of overall activity going on in your salesroom. How many times do they make a disposition each day, week, month? If they are not taking several actions in your lead management system every hour then they are probably not doing their jobs properly. Maybe it’s time to quit checking ESPN.com and hit that phone.

Success metrics

Contact rate: What percentage of the leads in your system have resulted in an actual contact being made during the past day, week or month? If you are not contacting a high percentage of your leads, they are either poor quality leads or your organization is behaving badly (see metrics above)

Application rate: What percentage of your leads have led to an application being taken? Depending on the industry, this would be defined as having taken a loan or enrollment application for instance. Typically a good benchmark here is that less than an 8% application rate is fairly poor performance, although this depends on the type of leads your company uses and the underlying level of customer demand at the time. It is definitely possible to consistently hit in the high teens if you are buying good leads and have a team that is behaving in the right way.

Conversion rate: “The ultimate metric”. What percentage of your leads end up generating revenue? If you are in business today then your own performance regarding this metric is likely etched in your mind, it is that fundamental. If you don’t know this ratio cold then I’d suggest that you need to get your hands on a lead management system ASAP (although it needs to be one that measures your conversion rate, of course!).

I would argue that armed with these 7 simple metrics, you have everything that you need to build a cutting edge sales organization that can weather any storm. Furthermore, given the simplicity and comprehensiveness of these measures, it is probably high time that the industry embraces these as common standards. Once we do that, for the first time we will all speak a common language and can begin to benchmark ourselves against one another. Only then will we truly be able to say whether we are performing well or poorly in a market that changes dramatically from one day to the next.

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