Sales metrics can be an indicator of how well you’re doing in your job. However, with so many metrics available, it’s easy to get overwhelmed. Sales are the lifeblood of any business. If you don’t know how much profit you’re generating, you’ll never know when your business is in danger. They measure which sales strategies work best under different circumstances and which salespeople consistently achieve the highest results.
In this infographic from Quick Sprout, you’ll find the ultimate guide to sales metrics and how to implement them into your business today.
Importance Of Sales Metrics
Sales metrics are important because knowing them allows you to follow the results of your marketing efforts and continuously improve. First of all, they help you track progress toward goals, help prepare for growth, adjust compensation and incentives, and give you an idea of whether or not the sales team is operating as efficiently as possible.
- Identify the tactics
- Use of Salesforce in your business
- Keep Track of goals and sales
- Choose the right marketing tactics
- Create an effective sales system
- Cash flow is the road map
Different Groupings Of Sales Metrics
There are also different metrics you should track, depending upon the goal of your business. The list is broken into the following categories:
- Sales Key Performance Indicators
- Lead Generation Sales Metrics
- Activity Sales Metrics
- Outreach Sales Metrics
- Channel Sales Metrics
- Pipeline Sales Metrics
- Primary Conversion Metrics
- Sales Productivity Metrics
- Sale Process, Tools, and Training Adoption Metrics
- Sales Hiring Metrics
Sales Key Performance Indicators
The KPIs are what make up the backbone of any effective sales presentation. Whether you’re hitting the road to sell your product or service, understanding your prospects’ goals will allow you to hit the mark with greater effectiveness and efficiency.
Total Revenue: If you’re not yet earning money, then any money in your savings or checking accounts is total revenue.
Revenue by service: This refers to all the income generated by a business, not just the money it makes from selling a single product.
Revenue % From Business: It’s helpful to track your new customer acquisition rate at the level of the individual customer.
Revenue % From Old Customer: This refers to the money you make when you sell more, keep customers longer, and sell them more often.
Yearly Growth: This graph compares sales revenue from one year to the next.
Customer lifetime value (LTV): LTV is the lifetime value of customers for a company or business. It’s an important metric in microeconomics.
Territory Revenue: This reflects how effectively the company is using its existing channels to sell its products and services.
Market Revenue: This indicates the sales potential of a particular vertical.
Many competitors you’ve lost a deal to: If your customers are switching to a competitor, it’s a clear sign that you need to change something.
Net Promoter Score (NPS): This score is based on the familiarity, trust, and personal connections shared by the customer or user and the business.
Selling Cost: The cost of selling is the ratio of how much it costs you to sell your product compared to the revenue it generates.
Lead Generation Sales Metrics
Inside Digital Prosperity are detailed descriptions of important lead generation metrics that highlight how our sales teams are optimizing their efforts to drive new leads into their funnel.
- Prospect qualification
- Awareness of lead generation
- Lead response time (average)
- Sales readiness
- The volume of new opportunities
- Resource availability
- A clear idea on what to sell and why
- Cost per Lead/ percentage per lead
- Conversion Rate
- Customer acquisition cost
Activity Sales Metrics
The sales metrics in this report show which activities most frequently lead to completed deals. Sales managers can also use activity data to set goals, such as increasing the number of meetings their reps hold each week.
If a sales associate isn’t hitting their quota, take a look at their activity metrics (e.g. how many emails they’re sending out) to determine why. You can only have an impact on the salesperson’s activity if they work for you.
The activity metric is a measurement of something you do.
- Call made
- Email sent
- Social media shares
- Fix meetings
- Demos presentations
- Referral requests
- Live traffic updates
- Sent proposal
Outreach Sales Metrics
In any business, there are many marketing processes and strategies. Finding the one that works best for your business will require more than just a cursory glance at the options. Sales reps that go directly from meeting prospects at trade shows to asking them to buy the product will have a much higher initial contact-to-meeting rate than sales reps who email prospects.
There are three types of outreach sales metrics:
Social media metrics
- LinkedIn connection percentage
- Mail response rate
- Trade show events, conference
- Meetings sets
- Social media engagement percentage
- Number of opportunities granted
- Webinar Attendee
- Reciprocal Linker
Email sales metrics
- Open Rates and Click-Through Rates
- Cost Per Acquisition
- Spam Complaints
- Conversion rates
- Customer Service Feedback
- Percentage of recipients for next step
Phone sales metrics
- Call-back rates
- % of recipients ready for conversation
- % of prospects move to next step
Channel Sales Metrics
Here are some data points that may help you better understand which channels are generating the most revenue for your business.
- Total revenue from contracts with partners
- Per partner revenue
- Margin per companion
- The average size of a deal by valuable partners
- Revenue target achiever partners
- Opportunities numbers in partner pipeline
- The average velocity of deal
- Customer partner retention rate
- Average cross and upsell rate of customer
- Counting all partners
- New partners added per month/year
- Partners who leave last month/ year
- Average time to find, train, and onboard new partners
Pipeline Sales Metrics
Pipeline sales focus on the volume of prospects within a sales organization’s pipeline, such as how many potential leads are currently being worked on.
You’ll want to measure each metric for a specific time frame, like daily, weekly, monthly, or quarterly. You should also analyze each metric by staff and by individual employees.
The average span of the sales cycle: This refers to how long it takes leads to go from the time they first come in until they’re converted into customers.
Weighted pipeline value: This is a measurement of the overall value of deals that are currently in the pipeline.
Total available opportunities per month/ year: To get a better sense of this, it’s worth knowing the average number of open deals per fundraiser.
All closed opportunities: This refers to the number of prospects that you have closed.
Annual contract value (ANV): Annual contract value refers to the value of a particular deal relative to its life span.
Win rate: What is the ratio of the number of deals you’ve won to the number of deals you could have won?
Rate of conversation by sales funnel stage: It’s important to track which tactics are most effective at each stage of the sales funnel.
Primary Conversion Metrics
- We’ll be going over how much an idea is worth to you
- Closed /won opportunities percentage
- Lost opportunities percentage
- Percentage of opportunities which are lost to contender
- Percentage of opportunities obtained by lead source
- Average conversation for achieved opportunities
- Lost opportunities average conversation
Sales Productivity Metrics
Sales productivity is how well your sales reps convert leads into clients. The more time your salespeople spend working, the higher the chance they discover new investment opportunities. To evaluate your sales representatives’ performance, look at these factors:
- Percentage-wise how much of your time does selling activities take?
- Manual data entry time spent per month
- Percentage of invested time on content creating
- Percent of salespeople who support their claims with marketing materials
- If you’re using a lot of tools to get things done, it might be better to try one tool that does the job of several
- Of the responding leads, what was the percentage quality?
Sale Process, Tools, and Training Adoption Metrics
It’s a major benefit of investing in sales enablement and training that your salespeople will be able to achieve more by doing less.
- Percentage of salespeople who follow a sales process
- Percentage of salespeople who use marketing materials to generate sales
- Percentage of salespeople using response, designated message, and/or email template
- The average cost for the company to train a salesperson
- On average, how much time do your sellers spend training each month, quarter, and/year?
- What percentage of the salespeople applying sales training can close more deals in six months?
- How durable is your sales rep training program?
- Percentage of salespeople who use CRM
- What percent of salespeople use tools like LinkedIn Navigator?
Sales Hiring Metrics
A solid sales hiring strategy is the key to hitting your targets. Between company growth, churn, and the costs of training new hires, losing even one high performer can decimate your team’s productivity.
It’s far too easy to rush through a hiring process, ending up with someone who doesn’t fit the job. Using data about previous hires to inform future hiring decisions will enable you to find high performers even when times are tight.
Things to tracks are:
- What percent of the time do you spend recruiting?
- Average of recruiting time
- Accepted offers percentage
- Percentage of new hires made from each source
- The average seniority of your employees with the company is rising
- Turnover rate (average)
- The average cost per person to find a realistic replacement for the salesperson’s role
Several things determine how productive your salespeople will be, and a lot of them have to do with individual personalities. One is the length of time in which it takes new employees to become productive. Use sales pipeline data to hire good people, fire bad people, and develop better expectations for your reps.
A ramp-up schedule is a prediction about how much time it will take to reach 100% of your sales quota. If a sales representative takes four months to exceed 100% quota, then they are taking four months to exceed 100% quota.
Even though new sales reps may inherit some of the customers that their predecessors sold to, they likely won’t have the same relationships. And your top performers will likely hit their quota right away, but a salesperson who is hitting 98% of their goal isn’t at the same level as someone who has hit 100%.
Alternatively, Ideal CEO Somen Mondal suggests that you use the following formula to determine whether or not to refinance your business:
Ramp-up = time spent in training + average length of the sales cycle + X
X is seller’s experience: The more you put into your sales training, the better you will do in the end.
Ramp = 30 days+53 days+ 10 days
After 93 days, this salesperson would be as productive as an average salesperson.
Indicators in sales
There are two types of indicators in sales
- Leading indicator
- Lagging indicators
A leading indicator is a clue that provides advance notice of future performance. Leading indicators are more accurate than lagging indicators, but they aren’t as easy to measure.
A lagging indicator looks back at the past. Lagging indicators show you how you’re doing after the fact. You should also track “leading indicators,” which are signs of an impending problem that you can address before it becomes critical. Once you see weak results, you need to revise your sales plan to improve performance.
Although different from the business KPIs we’ve covered so far, sales metrics are still important, especially for SaaS startups.
SaaS Sales Metrics
SaaS products are starting to become more prominent. There are entire companies devoted to SaaS, and the more important industries are all using it. The rapidly growing software industry has generated immense wealth for a few large holders of stock, while average working people have less and less opportunity to get rich from software sales. SaaS is a type of online software solution. A subscription service provides access to a limited number of features for a specified period. Subscription-based services have many benefits over regular programs, but they come with a certain amount of risk: If a user doesn’t use the service or fails to maintain his subscription, then the provider could have the rights to his or her data and activities.
Just because you’ve convinced a customer to make a purchase doesn’t mean they’ll keep making purchases. Rather than focusing solely on the first sale, focus on building a long-lasting relationship with customers.
The sales KPIs you track should provide insight into your sales performance and help you identify growth opportunities.
- Customer acquisition cost (CAC)
- Cost Per Acquisition (CPA)
- Customer Life Time Value
- Average Revenue per User Account
- Monthly Recurring Revenue (MRR)
- Annual Recurring Revenue
- Churn Rate
- Revenue Churn
- Negative Churn
Customer acquisition cost (CAC)
Since you want to know how much it will cost you to attract a new customer, divide the amount of money that you spend on attracting customers by the number of new customers who are attracted.
That means that each customer is worth $20, and if you spent $1,000 to acquire the first 50 customers, your long-term customer value (LCV) would be $20.
This is the easiest way to figure out how much your company’s value has increased over a specific period. But it assumes that you’ll keep adding customers at the same pace forever and that your marketing and sales costs will remain constant, which rarely happens.
If you count CAC as the number of customers who bought in a given month, then it will not accurately reflect actual customer acquisition costs.
To avoid these mistakes, the formula is this:
CAC = (Marketing Expenses (n-60) + 1/2 Sales (n-30) + ½ Sales (n)) / New Customers (n), where n= Current Month
Cost Per Acquisition
Balfour points out one common error is to confuse “Cost Per Acquisition” with “Cost Per Action” — but the two are different, and the difference can be financially significant.
CPA is an essential metric to track because it shows in which areas you’re wasting money or where you can spend more and get more back. You can use CPA to predict CAC and therefore, a sale.
Time To Collect CAC
When a startup collects CAC it means they’ve reached the break-even point. How long it takes to collect CAC will tell you how quickly the startup can reach profitability.
Your average income per account is $ 400. Your margin of profit is 95%.
Month to retrieve CAC = CAC divided by (ARPA x GM)
You would need approximately two weeks to break even.
Customer Life Time Value
The LTV is the average net profit per user over their lifetime as a customer, adjusted for the fact that some customers will churn. If you’re growing by acquisition, the ratio between lifetime value and acquisition cost should be the same month after month.
Break down your LTV by how much the customer pays you in a given month or another period, you’ll be able to understand how profitable they are for you.
If the LTV: CAC ratio is 1.5:1, you will need to do something with that, and if it’s 4:1, you might want to cut back.
- Decrease your expenditures on Tier X while increasing them for Tier Y.
- For most businesses, if you can understand your lifetime value, you can design your company in a way that optimizes for that.
Average Revenue per User Account
Revenue per user or account represents the average revenue that a company receives for each user/account. If you plan on using the average number of months for each contract, then it makes sense to calculate the monthly average. If customers generally purchase your service yearly then calculate it yearly.
Monthly Recurring Revenue (MRR)
Monthly recurring revenue refers to how much money will be made on average from each customer in a single month. Lifetime Value (LTV) is a vital sales metric for businesses, as it shows their growth and how much money they will make in the future.
Calculation Of MRR
MRR can be calculated in two ways:
- Add up the monthly revenue from each customer to get a running total of the monthly revenue.
- Multiply the number of users paying you per month by their average revenue per user.
The first method is an inferior inaccuracy, but it’s faster. Suppose you have two customers paying $200 each. Your total MRR will be $400. The second method is not tricky. If you bring in four customers at $150 ARPA, your MRR would be $600.
The new MRR is the sum of all your revenue streams minus any refunds, chargebacks, or unsubscriptions.
Expansion MRR is revenue you’ve already generated from existing customers, but now you’re getting more money from them. Expansion plans are the most lucrative of all subscription-based pricing models. It’s generally accepted that it’s much easier and cheaper to retain existing customers than to acquire new ones.
Churn is the number of customers who have canceled or downgraded their plans. It’s a leading indicator of how your business will fare with additional income. If you lose two customers paying $400 each, your revenue would be $800 lower in the next month.
Annual Recurring Revenue
The annual recurring revenue is simply your monthly recurring revenue multiplied by 12.but it is more profitable than MRR. Because there are fewer days in some months than in others, the total number of sales might be more or less than expected.
Monthly variance is much less relevant when looking at yearly numbers.
Consider MRR or ARR?
Both ARR and MRR are valuable and you should focus on both. Like all monthly metrics, MRR fluctuates too much to be a good indicator of how your business is doing. And ARR gives you a clear annual picture of your business.
The churn rate is a way to track whether you’re selling products that customers want, and it’s a vital component of calculating the lifetime value of a customer.
(# of customers lost in a given time period) / # total customers at beginning of given time period
The revenue churn is the metric showing how many dollars you’ve lost. Customer churn is the percentage of your customer base that switches over to a competitor’s product.
A customer whose total expense is $300 per month is probably better than three customers whose total expense is $40 per month.
Through a combination of increasing conversion rate and decreasing churn rate, negative churn is achieved. It makes sense if you think about it because negative churn means you are adding more customers than you are losing.
Sales KPIs By Group Type
For instance, if you want to see how well your team is doing against revenue goals, you can break the sales field into types – inside/outside versus development/sales, and then by region.
The most important metric for inside sales is conversations per hour of work. No other metric is as indicative of success and efficiency as this one.
- Number of closed agreements
- Stepwise opportunities
- Substantial measures or interactions
- Produced opportunities
- Meeting programmed
KPIs Field Sales
Outside sales reps primarily use metrics like the number of meetings and the length of calls, while inside sales reps primarily use metrics like the number of hot leads.
- Closed agreements counting
- Opportunities produced
- Stepwise opportunities
- Substantial interactions
Sales Development Metrics
Companies use these metrics to measure the effectiveness of their sales development team’s pipeline-management skills.
- Produced opportunities
- Substantial interactions
- The numeral of closed agreements
- Meeting programmed
We’ve talked a lot about metrics so far; fortunately, we’re going to introduce you to the metrics dashboard that helps you track your business metrics and KPIs without a sweat. Sales metrics dashboards do the hard work of collecting, organizing, and displaying your sales data.
Sales metrics dashboards help you learn more about your sales process and effectively track your performance. These dashboards offer the ability to visualize data that provides valuable insights into their performance and that of their business.
Metrics to Track On A Dashboard
- Sales representative production
- Activities of sales
- Management of sales
- Funnel Details
Sales representative production
It’s important to have metrics that match your objectives. If you’re trying to increase prospecting, you should aim for total opportunities created, including ones that are not followed up by a salesperson.
You might also want to track how many of your sales reps are bringing in qualified leads.
Activities of sales
You can set up a dashboard that will show how many times your reps have logged in to the CRM in the past week, how many calls they’ve made, how many presentations they’ve given, and so on.
Management of sales
If you’re a sales manager, it’s important to keep close track of how your team performs against goals. Sales managers should also measure how well their team is doing compared to other teams and the market overall.
A good way to measure this is to count the number of contacts you have, the number that is assigned, and the number that are part of your sales funnel. Consider tracking your key sales metrics to improve decisions and set appropriate goals. Don’t forget to take a look at the sales to funnel to find points of friction.
If you are not willing to invest in CRM, you can track your KPIs in a spreadsheet.
Sales KPIs Templates
The spreadsheet will allow you to track different KPIs, such as sales volume or number of orders. It also has tabs for KRAs and different metrics such as non-compliance or customer satisfaction.
You’ll be able to manage each of the following:
- Ordinary deal scope
- Win rate
- Demo-to-adjacent ratio
- Commission calculator
- Quetta calculator
- Customer acquisition cost
- Customer lifetime value
- Product revenue
- The retention rate of customer
- Revenue churn
- A turnover rate of worker
Increase Productivity Rate By Tracking Sales Metrics
Tracking metrics allows you to optimize your sales and marketing efforts, which will help boost your company’s revenue. The most successful companies are constantly assessing and reassessing which tasks they perform well and which don’t, so they can focus on what’s most important.