Sales metrics are measurements of activities and performance within the sales process, and specifically what is happening within a sales pipeline. They help businesses gain insight into how their salespeople are performing and what areas may need improvement, which is why we’ve identified 13 sales metrics you can use to optimize your sales performance.
One effective way to measure sales performance is to use a tool like Pipedrive. Pipedrive is a small business customer relationship management tool (CRM) that includes goal tracking and a visual pipeline tool that makes it easy to evaluate sales opportunities and move them through your sales process. Plans start at $12.50/user per month and a 14-day free trial is available. Visit Pipedrive to get started today.
The Top 13 Sales Metrics To Improve Sales Performance
|Sales Metrics||What it Measures|
|Sales Growth||The overall increase in sales between two time periods|
|Opportunity Win Rate||What percentage of open sales opportunities are won|
|Pipeline Stage Conversion Rate||The percentage of deals in each pipeline stage that convert|
|Sales Lead Qualification Rate||The rate of leads you generate that become sales qualified|
|Age of Sales Opportunity||The overall time since a sales opportunity was created|
|Average Deal Size||The average dollar value for deals per salesperson, team, or sales organization|
|Revenue by Product Line||How different product lines perform based on total sales for each|
|Total Revenue||The total sales revenue generated, by individual, or for the entire business|
|Customer Lifetime Value||The average expected value of a customer relationship over its entire lifetime|
|Churn Rate||The rate that customers either cancel a subscription or fail to renew service|
|Cost of Sales/Deal Profitability||How profitable a deal is based on revenue and expenses.|
|Customer Appointments||The number of individual customer appointments (or calls) a sales rep conducts|
|Sales Activities||The number of activities like emails sent, leads qualified, or cold calls made.|
There are hundreds of metrics you can use to measure sales performance, but not all sales metrics are helpful to every small business. Finding the right metrics to help you evaluate and improve your sales performance means identifying the areas you want to measure based on your specific process. In addition, attempting to measure too many metrics is counterproductive and results in data that doesn’t actually help you make decisions.
Here are the top 13 sales metrics to help your sales team improve its performance:
1. Sales Growth
What it measures: The overall increase in sales between two time periods.
Why it helps performance: One of the simplest measures of sales performance is to evaluate current sales and compare them to a previous period of time to determine how much you have increased (or decreased) sales. Tracking this metric is important because it can indicate a range of factors that require your attention. While measuring sales growth alone won’t always tell why you are experiencing positive or negative growth, it will let you how you are currently trending.
For example, businesses might measure month-over-month sales growth to see how their sales performance has changed in the short term. Likewise, businesses often compare the current month (or time period) to the same time the previous year to see how their performance compares to a similar window of time. This gives you a picture of the health and direction of the business based on how your sales efforts are performing.
2. Opportunity Win Rate
What it measures: What percentage of open sales opportunities are won, usually by individual sales rep or team.
Why it helps performance: Different sales organizations have different average rates of closing deals based on the types of products or services they sell, their market, and their industry. Knowing how your win rate compares to your baseline can help measure the effectiveness of your sales strategy and identify areas that can be improved.
3. Pipeline Stage Conversion Rate
What it measures: The percentage of deals in each pipeline stage that end up converting.
Why it helps performance: As deals move through your sales pipeline, they are more likely to be won and result in a sale. Knowing what your conversion rate is per pipeline stage can help you to evaluate your deals and forecast future sales. It also gives you a benchmark you can use to evaluate deals and determine the ones on which you should focus your efforts.
For example, if you know that a third of the deals that reach a consultation stage usually convert, but 60% of deals reaching the proposal stage do the same, you can focus your efforts on getting deals over that hump. Instead of only focusing on gaining the opportunity to consult with a customer, you can build into your strategy the best practices to ensure you have an opportunity to present a proposal since that doubles the chance of conversion.
4. Sales Lead Qualification Rate
What it measures: The rate of leads you generate that end up becoming sales qualified and ready to move through the sales process.
Why it helps performance: This metric specifically helps sales teams in two ways. First it is helpful in evaluating the quality of leads you are generating. If you have an especially low sales lead qualification rate, it can be an indication that you aren’t attracting the right kinds of leads and need to refocus your efforts to identify the right customer personas in your sales and marketing efforts.
The second way it helps improve performance is that it gives you a metric to measure your qualification process. It helps you evaluate your lead nurturing process and sales pipeline to identify whether there are any issues at moving leads through the sales cycle.
For example, if one salesperson has a significantly different sales lead qualification rate, it can be an opportunity to evaluate what is working well, or in some cases, where training and resources are needed to improve performance. This can be especially useful once you’ve established what you believe is a good standard for this metric, and are able to evaluate team members based on whether they are performing above, or below, the standard.
5. Age of Sales Opportunity
What it measures: The overall time since a sales opportunity was created, or it can be used to track the amount of time a deal spends in a specific stage of your sales process.
Why it helps performance: Tracking the amount of time it takes a deal to move through your sales pipeline helps you to identify when they are getting stale, or past the point where you are likely to be able to win. This is important because often sales opportunities are time sensitive and require action to keep them moving through the sales process.
In addition, even when a deal isn’t time sensitive, customers may lose interest or find another option if the deal cycle drags on. Being able to quickly identify those deals that have been sitting in their current state without activity gives you the opportunity to reach out and prompt the customer to act, or take action on your part when appropriate. For example, you might follow up after sending a sales proposal once you have waited four days without a response.
6. Average Deal Size
What it measures: The average dollar value for deals per salesperson, team, or sales organization.
Why it helps performance: Measuring the average size of a deal moving through your pipeline can help improve performance in several ways. It can give you an indication of whether your deals are trending up or down in value, and can also give you a measurement to determine whether certain deals are worth it.
It is also helpful for salespeople to forecast whether they are likely to hit their sales goals. If a sales rep has a quarterly goal of $500,000, they might break that down by the number of deals they expect to close, and the average size per deal. If they plan to close 100 deals, that means each needs to be an average of $5,000. If they notice that their current average deal size is less than that, they know they will either need to find more deals, or find higher value deals.
7. Revenue by Product Line
What it measures: A measurement of how different product lines are performing based on the total sales for each.
Why it helps performance: If your business has multiple product lines, this metric can help you compare which are performing best. It can also be a helpful indicator to determine which product lines you should focus your sales efforts on, or to determine if there is an issue with a particular product. For example, if your company sells three different product lines, and one of them is not generating as much revenue, you might decide to promote it more intentionally.
In addition to measuring strictly revenue, it can also be helpful to consider measuring net income, or profit, by product line. This metric is helpful for sales teams as they build proposals for customers as it gives them a better understanding of which product lines are most profitable and will therefore generate the most benefit for the business. It’s also a helpful metric for a business as it makes overall decisions about which products or services to eliminate.
8. Total Revenue
What it measures: The total sales revenue generated, usually in a salesperson’s portfolio, or for the entire business.
Why it helps performance: Ultimately the goal of a sales organization is to generate revenue. Measuring the results of your sales efforts in terms of the revenue produced is an effective way to evaluate the impact of your activities. This gives you a broad picture of the results of your sales process and provides an easy metric to compare to similar product sales over other periods of time to measure sales growth.
This is especially helpful on an individual salesperson basis since it provides you with a number you can use to compare his or her performance to established goals. It’s also a motivating factor when used to compare performance by individuals across your team. Since most salespeople are at least partially compensated based on the revenue they generate, this metric is an important one to have an accurate measurement that is easily tracked by everyone.
9. Customer Lifetime Value
What it measures: The average expected value of a customer relationship over its entire lifetime.
Why it helps performance: Customer lifetime value (CLV) measures the value of a customer over its life span, which represents the total profitability earned off an average customer based on the standard length of time you expect to maintain the relationship. Businesses calculate customer lifetime value to evaluate the return on marketing campaigns and to identify the most valuable customer segments.
Customer lifetime value provides you with a metric you can use to evaluate whether the return on your marketing efforts is worth it and to compare the relative value of your customers to determine which are over or underperforming. This helps performance because it allows you to evaluate which efforts are most effective and are worth continuing to pursue. It also helps you measure customers and identify which ones represent the most value for your business.
10. Churn Rate
What it measures: The rate that customers either cancel a subscription or fail to renew their service with a business.
Why it helps performance: Churn rate tells you how many of your customers leave your business, during a given time period. It is used primarily by businesses with a subscription model or with recurring customers month after month. Churn rate is used by businesses to project future sales and other metrics like customer lifetime value. It’s also used as a metric that can help you identify trends or problems like customer service issues.
For example, if you notice your churn rate increasing, there could be a problem or dissatisfaction with customers that you are unaware of. By measuring your churn rate as your business grows you can monitor how much of a positive or negative impact variables like changes in pricing have on your customers resulting in better overall customer retention.
11. Cost of Sales/Deal Profitability
What it measures: How profitable a deal is based on the total revenue and cost of sales expenses.
Why it helps performance: Not all sales opportunities are equal, and knowing which ones are most profitable helps you focus on the deals that are best for your business. Specifically, measuring your cost of sales allows you to monitor cost variables that you have some control over. Unlike fixed expenses, these are expenses associated with making a sale, and are often easier to adjust. This metric can give you data on how much it costs you to make a sale.
It also helps you evaluate deals based on how profitable they will be for your business. Knowing whether or not a deal is worth it to your business helps improve performance by making it easier to walk away from sales opportunities that aren’t worth the time or effort to win. Every business should be tracking both their cost of sales, and their overall deal profitability in order to make sure they are making enough money.
12. Customer Appointments
What it measures: The number of individual customer appointments (or calls) a sales rep conducts for a given time period.
Why it helps performance: Building customer relationships is the foundation of most sales processes. Measuring the interactions your sales team has with prospects and customers is an effective way to ensure that they are being intentional about connecting with new sales opportunities, and strengthening relationships with existing customers. This is usually measured in terms of prospect and customer appointments, or sometimes phone calls.
Like many sales organizations, when I worked for FedEx, we were expected to have a specific number of customer appointments every day. We were measured based on this metric because the business knew that an X number of appointments would translate into Y number of new customers. Additionally, they knew that good customer relationship required a certain number of “touches” each month, or quarter, and our appointment goals were set accordingly.
13. Sales Activities
What it measures: The number of other sales activities including emails sent, new prospects qualified, or cold calls made, for example.
Why it helps performance: Sales performance is based on the regular activities that salespeople do on a regular basis. Measuring the specific activities that directly impact your sales process can help you to increase the number of opportunities moving through your pipeline. The key differentiator is that this metric doesn’t measure results like sales growth, rather, it focuses on the behavior and activities of salespeople that contribute to those results.
As you establish this metric, you’ll be able to look at top performers and determine which level of sales activities contribute most to their success. Knowing that, you can set goals for your sales team based on the number of activities that best generate increased sales performance and measure whether or not you are meeting those goals.
Since sales revenue and sales growth are trailing indicators (they measure what happened in the past), measuring activities can help you identify changes in real time. This can help your performance by preparing you to meet those goals and make changes as needed.
Why Sales Metrics Matter
In general, sales metrics improve sales performance by giving you objective data about how you are currently performing in areas that you have decided are important to the success of your business. By themselves they are just numbers, but when used properly, they give you information about what is happening within your sales process, and what areas need your attention.
Specifically, sales metrics help you improve your sales performance by:
- Providing a baseline to measure against: Over time, you’ll be able to look at various metrics and create a baseline that you can gauge your performance against.
- Motivating salespeople: Knowing that there are specific aspects of performance that will be measured helps keep people accountable and helps motivate your sales team to perform better based on the metrics you choose.
- Helping you measure change over time: Metrics can help you observe trends and patterns in your business, whether it is with individual sales reps and their performance, or with your overall organization, they help you see how things are changing.
How We Evaluated the Best Sales Metrics to Measure
We looked at the metrics that helps sales professionals improve performance in a variety of ways. Specifically, we looked at metrics that are easy to integrate into your existing sales process, intuitive to use, and simple to understand. We also evaluated which metrics were the best for helping motivate a sales team and measure performance in a variety of circumstances to provide you with the best options for your business.
We looked at the following criteria to determine the best sales metrics to improve performance:
- Easy to measure: A metric is only as useful if it can be easily measured with the tools sales teams have. Most of the metrics here can be measured using your existing CRM or accounting software tools.
- Actionable: The metrics you choose should relate directly to actions you can take as a sales organization to improve performance. Only measure aspects of your sales process that you have the ability to affect through your efforts and activities.
- Forward Looking: While metrics, by nature, measure past performance, businesses should consider tracking those data points that can help them as they plan for future sales activities, helping them move the performance needle in the right direction.
Understanding which sales metrics can best help your team improve sales performance is an important aspect of maximizing their effectiveness. The metrics included here provide you with 13 of the best metrics for improving performance and can be used to motivate your team to reach its goals. Whether your business is looking to convert more leads to customers, or increase the overall revenue per deal, these metrics can help you accomplish your sales goals.
A CRM that measures your performance can help you track and evaluate the key metrics that you should measure. Pipedrive has a highly-visual interface, including a simple-to-use pipeline tool that makes it easy to evaluate and monitor deals as they move through your sales process. Pipedrive has plans beginning at $12.50/user per month. Visit its website to get started.