Knowledge
What to measure in B2B sales in a small company?
When I ask a business owner how sales are going, I often hear that there are quite a few conversations, a few proposals have gone out to clients, and one bigger deal should close soon. Perhaps it really does look good. But what exactly does “quite a few” mean? What is the belief that the client is about to decide based on? And are we actually signing profitable contracts?
In a small B2B company, sales measurement should help answer four questions: are new opportunities appearing, are open deals moving forward, why clients buy or walk away, and what sales can we expect in the near future.
To begin with, a few pieces of data updated in one place and a short, regular review are enough. You add more detailed metrics when you need to understand a specific problem.
Before you start measuring, define what you are actually counting
Suppose one person in your company records as a sales opportunity everyone who replied to a message. Another only a client they have had a meeting with. You, in turn, treat as an opportunity someone who asked for a proposal. At the end of the month you put the results together and try to draw conclusions. Except each of you is measuring something different. That is why you first need a few shared definitions.
A lead is a company or person you can reach. The mere fact that someone fits your client profile does not yet mean interest in buying.
A prospect is a specific possibility of cooperation. For the purposes of a simple system, you can assume that the client fits your company, has confirmed a problem you can help with, and you have agreed on the next step in the conversation about solving it. Depending on what you sell, you may need additional conditions.
A win should have an unambiguous criterion. It can be a signed contract or an accepted order. Choose the moment appropriate for your business and apply it consistently.
The same goes for meetings. A scheduled meeting and a meeting that actually took place are two different things. If you want to evaluate the conversations held, count the ones that happened. This may sound like a detail. But without such arrangements, even the prettiest report will not explain much.
1. Are new sales opportunities appearing?
The first number worth knowing is the number of new qualified opportunities together with their source. How many appeared in the last week or month? How many came from referrals, how many from website enquiries, how many from actively reaching out to new companies, and how many from existing clients? This breakdown matters because the total can hide a change that will start to hurt you some time later.
You may still have plenty of conversations thanks to existing clients, even though you have not won a single new company in two months. You may also be increasing the number of marketing enquiries but getting fewer and fewer of the kind where cooperation really makes sense. In a small company it is especially easy to neglect client acquisition when there is a lot of delivery work. Today everyone is busy, so sales can wait. The problem will only show up when the current orders start coming to an end.
That is why you should regularly check whether the inflow of new opportunities continues also in the weeks when you have your hands full.
What to measure earlier, before an opportunity arises?
It depends on where you get your clients from.
| How you acquire clients | What is worth observing |
|---|---|
| Actively reaching out to new companies | The number of new companies contacted, replies indicating interest, and first conversations held |
| Inbound enquiries | The number of enquiries, their fit with the offer, and the time to the first substantive response |
| Referrals and partners | The number of introductions to potential clients and how many of them lead to a real opportunity |
| Existing clients | Upcoming renewals and identified possibilities of further purchases |
Choose data related to how your company actually sells. If most of the revenue comes from further projects for existing clients, it would be hard to consider the number of messages sent in cold mailing the most important measure of sales.
2. Do open deals have an agreed next step?
The second matter is the state of the conversations you are already having. For each active opportunity you should know:
- what is supposed to happen next;
- who is responsible for taking that step;
- when you agreed it would happen;
- whether the client knows what the next step is.
“Proposal sent” describes an action you performed. It still says little about what is happening on the client’s side. Much more is explained by a note like: “The client is discussing the proposal with their partner on Tuesday. On Thursday we have a call about the scope and start date”. Note the difference between a step agreed with the client and your private plan. Writing down that you will call on Friday helps organize your work. It is not, however, proof that the client wants to continue the conversation or is expecting that call.
At the weekly review, look first of all at the deals with no next step and those where the agreed date has passed. This is often more useful than looking at the total value of all proposals.
When to consider an opportunity inactive?
I would not set a single rule such as: “after two months without contact we close it as lost”. If the client warned that they would come back to the topic after the budget is approved, a longer break may be entirely justified. You need to record the reason for the postponement and the date to come back.
The situation is different when the client has not replied for weeks, you do not know their plans, and the proposal still appears as an almost certain sale. Then try to establish whether the topic is still current. If you have no grounds to treat it as active, remove it from the current forecast. You can mark it as postponed or close it according to the rules you have adopted. The contact history remains. What changes is your assessment of whether you can count on that sale in the near future.
3. What ends in a contract, and why do we lose the rest?
In a small company I would start with a simple summary: how many deals you won, how many you lost and how many are still open.
Only next to that would I show the percentages. If out of eight proposals you signed one contract, it may seem that effectiveness is poor. But when two deals are lost and five are still awaiting a decision, the result of that group is not yet known.
How to calculate win rate?
Win rate, i.e. the share of wins, is the number of won opportunities divided by the sum of won and lost opportunities.
If in a given period you closed three deals as won and seven as lost, the win rate is 30%.
The condition is a shared definition of a sales opportunity. If one person only enters well-qualified projects into the funnel and another every loose conversation, their results cannot be compared fairly.
With a small number of transactions, the note “3 won out of 10 closed” is often more useful than a bare “30%”. You can see at once how many cases the result is based on.
The reason for a loss should help you understand something
For a closed deal, add a short reason and one sentence of explanation. You can use a fixed list: competition, no budget, purchase postponed, incompatible technology, bad timing or lost contact.
Make sure, however, that the label is not misleading. “Price” may mean the client had no money. It may also mean they did not see the justification for the expense or compared your proposal with a completely different scope. It is worth distinguishing a reason confirmed by the client from your own assumption. If you do not know, write “not established”. That is more honest and more helpful than a made-up answer. With a few lost deals, you can learn the most by discussing them together: what the client needed, what you showed them and at which point the conversation lost momentum.
4. What sales can you expect in the near future?
The sum of proposals in the funnel can look very good. Especially when it also includes the ones clients have already forgotten about. That is why, for each significant opportunity, check the amount, the expected decision date, the next step and what might stop the purchase. If you have ten open deals, you can review each one separately. You do not have to replace that knowledge with a complicated formula right away.
Why can funnel value times win rate mislead you?
Suppose you have four proposals: one for PLN 240k and three for PLN 20k each. PLN 300k in total.
Historically you win one deal in four. Multiplying the funnel value by 25% gives PLN 75k.
Except that if you sign one of those four contracts, sales may amount to PLN 20k or PLN 240k. You also do not know yet whether the decision will be made this month or in six months. Such a multiplier can be a rough approximation with many similar transactions and consistent historical data. With a few uneven contracts, it can badly blur the picture.
In a small company I suggest preparing a cautious scenario and an additional one. In the first, include the deals where you have specific grounds to expect a decision in the given period. In the second, show those that may come through but still depend on significant unknowns. For both, note what you base the assessment on. The cautious scenario is not a guarantee either.
Check how much the company will earn and when it can deliver the order
The contract value alone is not enough. Before considering a larger contract a success, check how much should be left after the direct costs of delivery and whether you have the resources to do the work by the promised deadline. In services, a big project can occupy the whole team and leave little money. Also establish which amounts you are comparing. A monthly subscription and the value of a whole annual contract should not land in one column without distinction.
Remember too that signing the contract, doing the work, issuing the invoice and receiving payment may fall in different months. A forecast of signed contracts does not replace a plan of cash coming into the account.
How to organize the data in a small company?
If you already use a CRM, first check whether you can keep the necessary information right there. Creating an additional spreadsheet with the same data usually adds work and causes discrepancies. If you have no tool at all, a simple spreadsheet will be a good start.
In the opportunity register, one row should mean one separate purchase or project. The same company can appear several times if you are talking about different orders. This way the next sale does not overwrite the previous one.
To begin with, the following fields will be useful:
| Field | Why you record it |
|---|---|
| Company and the name of the project or purchase | To distinguish individual deals |
| Source of the opportunity | To know where sales opportunities come from |
| Person in charge | To make it clear who is responsible for the deal |
| Date the opportunity was qualified | To track the inflow of new deals and their age |
| Current stage | To know where the conversation stands |
| Net value and the scope it covers | To compare the right amounts |
| Next step and its date | To move the deal forward |
| Date of the last meaningful interaction | To notice a lack of progress |
| Expected decision date | To plan future sales |
| Outcome, closing date and reason for the loss | To evaluate completed deals |
At this stage you will not yet calculate every possible conversion or the response time to an enquiry. And that is fine. First you need data you will actually use. If you run outbound, keep a separate register of the companies contacted or use the data from your prospecting tool.
When to add more detailed metrics?
When the basic review shows a problem you cannot yet explain.
Reply rate: when you actively reach out to new companies
You can count what share of the companies contacted replied and what share showed interest in a further conversation. Count each company in that group once. Mark auto-replies separately. An out-of-office message does not indicate interest in the offer. Also establish what you count as a positive reply. A mere “please send the materials” is sometimes the start of a conversation, but sometimes also a way to end it. Compare groups that had a similar time to reply. The companies you wrote to yesterday did not have the same chance to react as those covered by the whole contact sequence a month earlier.
Stage-to-stage conversion: when you want to find the place that needs improvement
To calculate it you need the history of transitions, for example the dates of completing needs discovery and presenting the proposal. The current stage alone is not enough. Choose one transition you want to understand better. For example: how many of the opportunities in which you conducted needs discovery reached the presentation of a solution?
Low conversion is a signal to check the cause. It may result from a weak conversation, but also from the right decision not to offer a solution to a client it will not help.
Cycle length: when you find it hard to plan dates
You can measure the days from qualifying the opportunity to signing the contract. It is important that the start and the end are always defined the same way. With uneven results, the median is useful, i.e. the middle value after ordering the times from shortest to longest. Next to it, show the number of contracts you calculated it on.
Look separately at the age of opportunities that are still open; the fact that something takes longer than average does not have to mean it is a lost cause.
Response time: when you receive inbound enquiries
You need the date and time the enquiry arrived and the first substantive human response. An automatic confirmation that the form was received does not do the job. Check how many enquiries got a reply within the agreed time and whether any remained unanswered. If there are few enquiries, a list of the ones missed may be more useful than the average response time.
What does a useful sales review look like in practice?
Suppose you run a service company. Last month, six qualified opportunities appeared: four from referrals and two from existing clients. Actively reaching out to new companies brought none. You also have eight open opportunities. Three of them lack an agreed next step.
What follows from this?
It is certainly worth sorting out those three deals. You know what you can do right away: go back to the conversations and agree what happens next, or confirm that the topic is no longer current. The lack of opportunities from outbound still needs checking. Perhaps you were not running any activity, or perhaps you contacted the wrong companies. The number alone does not point to an explanation.
So you check the activity history and see that for three weeks nobody initiated new contacts because the team was preparing a big proposal. Now you have a specific problem to solve: continuity of activity. On that basis, you decide who will take care of winning new companies and when. This is exactly what measurement should provide. It should help you get from a general impression to a specific situation you can influence.
How often to analyze sales?
Every week, review new opportunities, open deals and the next steps. With a few or a dozen opportunities, you can start with 15–20 minutes. That is the review time, on top of the ongoing updating of data.
Every month, check the sources of opportunities, the closed deals and the forecast for the coming periods. Choose a problem that really needs attention. If you need a more precise measure, add it right then.
Every quarter, take a broader look at which clients you sell to, what you earn on and whether the current way of winning orders supports the direction of the company’s growth.
You do not have to change something after every review. Sometimes the right conclusion will be: we carry on, and to evaluate we need more sales opportunities processed.
How much data do you need to draw conclusions?
With five closed deals, one additional win changes the result by 20 percentage points. That is why a single weaker month does not have to mean that the sales process has deteriorated. The passing of a quarter does not guarantee a meaningful sample either. If you close three contracts per quarter, you still have few cases.
Look at the number of deals, their similarity and the time they need to close. Separate new contacts from referrals and small orders from big projects if their course differs significantly. With a small sample, compare specific cases, treating percentages with caution.
You can react immediately to a mistake you notice, for example an unanswered enquiry. Assessing whether a change in the way you conduct conversations improved the effectiveness of sales as a whole already requires longer observation.
Where to start in your company?
Set aside time and gather all active deals in one place. For each one, record the person responsible, the source, the value, the next step and the expected decision date. During this work you will probably discover that some information exists only in your head, that nothing has happened for a long time on a few deals, and that some amounts are based more on hope than on arrangements with the client. That will already be a useful result.
Next, set a fixed time for a short review and update the data after significant interactions. Only when you see what you still do not understand, add the measurement that will help you explain it.
In SalesMachine, the B2B sales system developed at TechMine, measurement serves precisely to improve specific activities. The numbers are meant to help understand where the sales process works well, where it needs improvement and what is worth tackling first.
If you want to put sales measurement in order in your company, get in touch with me. We will start with how you acquire clients today and what information you lack to make decisions. And if you want to check the level of sales maturity in your company, you can do it yourself online using the sales maturity diagnosis (in Polish).
