Understanding Time to Lead Ratio
Not all leads are created equal, that much is clear. Some result in a $10 sale and some are worth millions in ARR, therefore justifying any amount of time on the sales rep’s part. However, most leads processed by most sales reps daily are not million-dollar deals. Therefore, it makes sense to track the amount of time required to process and close a lead on average.
Understanding Time to Lead Ratio
A sales rep’s target will always be set to ensure that the total hours purchased from them justifies the MRR or ARR generated. But what’s the use of this logic if the sales rep is habitually working overtime or ig database allocating an inadequate amount of hours to the wrong leads? This is where the time-to-lead ratio comes into play. The time-to-lead ratio shows how long all sales activities per lead take on average.
It’s not about tracking the sales cycle or time to close as much as it’s about the allocation of a sales rep’s time and whether or not it’s justified to see the value of the deals generated. And it’s not as simple as dividing the standard 40 hours a week by the number of deals closed. Seeing how different sales cycles and deals can be, it’s essential to differentiate between them.
It may turn out that the bigger check deals are the least profitable, seeing how much time it takes to close them, and vice versa. Now that we understand the importance of tracking time per lead, let’s move on to the strategies to optimize and reduce this time to the minimum profitable, amount.C