Sales metrics are measurements of activities and performance within the sales process, and specifically what actions are taking place in your sales pipeline. They give businesses insight into how well their salespeople are performing and reveal top performers and opportunities for improvement. We’ve identified 13 sales metrics you can use to optimize sales performance.
The Top 13 Sales Metrics to Track to Improve Performance
Sales Metrics | What It Measures |
---|---|
The overall increase in sales between two time periods | |
The percentage of open sales opportunities won | |
The percentage of deals in each pipeline stage that convert | |
The rate of leads you generate that end up becoming sales qualified and ready to move through the sales process | |
The amount of time since the creation of a sales opportunity | |
The average dollar value for deals per salesperson or team | |
Revenue by Product Line | How each product line performs based on total sales for each product |
The total sales revenue generated per salesperson or sales team | |
The average value of a customer relationship over its entire lifetime | |
The rate that customers cancel a subscription or decide not to purchase again | |
How profitable a deal is based on revenue and expenses | |
The number of individual customer appointments (or calls) a salesperson makes | |
The number of activities, such as emails sent, leads qualified, or cold calls conducted |
There is no shortage of ways 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. Keep in mind that tracking too many metrics is counterproductive and results in data that doesn’t help you make decisions.
If measuring sales metrics seems overwhelming, one effective way to simplify the process is to use a customer relationship management (CRM) software like Pipedrive. Pipedrive 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 per user, per month. Sign up for a 14-day free trial today.
Here are the top 13 sales metrics to help your sales management team maximize performance and increase revenue:
1. Sales Growth
What it measures: The overall increase in sales between two time periods
Why it helps performance: One of the most simple measures of sales performance is to evaluate current sales and compare them to a previous period of time. This allows you to determine how much sales have increased or decreased between the periods.
Tracking this metric is important because it can reveal a wide 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 lend insight into overall sales health.
For example, you could measure month-over-month sales growth to see how your sales revenue has changed in the short term. Likewise, you could compare the current month sales report (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 activities are affecting your bottom line.
2. Opportunity Win Rate
What it measures: The percentage of open sales opportunities that are won
Why it helps performance: Every sales organization has a different average rate of closing deals based on the types of products or services they sell, their target customer, and their industry. Knowing how your win rate compares to your baseline can help measure the effectiveness of your sales strategy and identify opportunities for improvement.
Pipedrive reporting interface showing deals won
To calculate your win rate, use this formula: Win Rate = No. of Deals / Deal Won x 100
This number gives your insight into how effective your team is at successfully closing deals. It’s also one of the biggest components of your cost of sales. For instance, if your win rate increases from 10% to 20%, you can complete twice as many deals with the same number of sales reps, which is your major cost of sales. On the other hand, you can quickly lose profits if your win rate decreases.
3. Pipeline Stage Conversion Rate
What it measures: The percentage of deals in each pipeline stage that convert to customers
Why it helps performance: As deals move through your sales pipeline, they become more likely to be won and result in a sale. Knowing what your conversion rate is for each pipeline stage helps you to evaluate your deals and forecast future sales. As all experienced sales managers know, a loss of momentum through your pipeline kills deals, so monitoring these metrics and taking action based on what you learn is key to maximizing your sales performance.
Stage conversion report in Pipedrive
For example, if 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 tailor your strategy to ensure you have an opportunity to present a proposal because it doubles the chance of converting the deal.
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 helps sales teams in two ways. First, it aids 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 activities.
The second way it helps improve performance is that it gives you a way to measure your lead qualification process. It helps you evaluate your lead nurturing process and sales pipeline to see whether there are any issues involved in moving leads through the sales cycle.
For example, if one salesperson has a significantly high sales lead qualification rate, it can be an opportunity to determine what is working well. In cases where a sales rep has a very low sales lead qualification rate, it can identify that training and resources are needed to improve performance. Once you’ve established what a good lead qualification rate is, you can assess performance more efficiently to identify your top performers and who needs help.
5. Age of Sales Opportunity
What it measures: The amount of time since the creation of a sales opportunity; it can also be used to track the amount of time a deal spends in a specific pipeline stage
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. The longer a deal sits in the sales pipeline, the less likely it is to close successfully.
This is because it suggests that the prospect is losing interest and becoming difficult to contact or the sales rep isn’t following up properly. This is important because often sales opportunities are time-sensitive and require action to keep them moving through the sales process.
Even when a deal isn’t time-sensitive, customers may lose interest or find another option if the opportunity stalls or drags on. The ability to quickly identify deals that have been sitting in their current state without activity helps you identify when to reach out and ask the customer to take action.
For example, you might follow up after sending a sales proposal once you have waited four days without a response. Even if the opportunity is lost, it’s better to find out sooner rather than later to encourage more accurate sales forecasts.
Pipedrive’s intuitive deal pipeline interface
6. Average Deal Size
What it measures: The average dollar value for deals per salesperson or team
Why it helps performance: Understanding the average value of the deals you win can help you identify opportunities that are over or underpriced in your sales pipeline. Measuring the average size of a deal moving through your pipeline can also help improve performance in several ways by giving you an indication of whether your deals are trending up or down in value.
Pipedrive deal interface
Calculating deal size also helps salespeople forecast whether they are likely to hit their sales goals. For instance, if a sales rep has a quarterly goal of $500,000, they can 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 increase their number of deals or find higher-value deals.
7. Revenue by Product Line
What it measures: How each product line performs based on total sales for each product
Why it helps performance: If your business has multiple product lines, this metric helps you compare which ones are performing well. It can also be a good way to determine which product lines you should focus your sales efforts on—or if there are issues with low-performing products. For example, if your company sells three product lines, and one of them is not generating as much revenue, you might decide to increase your marketing efforts for that specific product.
It is also helpful to measure net income, or profit, for each product line. This metric aids sales teams as they build proposals for customers because it gives them a better understanding of which product lines are most profitable and will generate the most revenue. It can also help you identify products you may want to eliminate so your team can focus on your highest-performing products.
8. Total Revenue
What it measures: The total sales revenue generated per salesperson or sales team
Why it helps performance: Ultimately, the goal of any sales organization is to generate maximum revenue. Measuring the results of your sales efforts in terms of the revenue earned is an excellent way to evaluate how effective your sales strategies are.
Pipedrive deals won dashboard
Measuring total revenue on an individual salesperson basis is particularly helpful because it gives you a number with their established goals. It also helps motivate sales reps when you compare performance by individuals across your team and recognize top performers.
9. Customer Lifetime Value
What it measures: The average 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 lifespan. This number represents the total profits you earn from your average customer based on the length of time you expect to maintain the customer relationship. Businesses calculate customer lifetime value to evaluate the return on marketing campaigns and to identify the most valuable (or profitable) types of customers.
Customer lifetime value gives you an effective way to evaluate whether the return on your marketing efforts is worth it and helps you compare the relative value of your customers to determine which spend a lot of money on your products and services—and which spend very little. This allows you to identify which customers you should focus on honing your marketing efforts toward.
10. Churn Rate
What it measures: The rate that customers cancel a subscription or decide not to purchase again
Why it helps performance: Churn rate pinpoints the number of customers who leave your business during a certain time period. It’s a helpful metric for businesses that use a subscription model or that have customers who make recurring purchases every month. Businesses use churn rate to project future sales and other metrics like customer lifetime value. It can also help identify trends or problems such as low customer service performance.
For example, if you notice your churn rate increasing, there could be a problem or dissatisfaction with customers you aren’t aware of. When you measure your churn rate as your business grows, it allows you to monitor how much of a positive or negative impact things such as pricing changes have on your customers, which impacts overall customer retention.
11. Cost of Sales & Deal Profitability
What it measures: How profitable a deal is based on revenue and expenses
Why it helps performance: Not all sales opportunities are equal, and knowing which ones are most profitable lets you focus on the most profitable deals. Measuring how much money it takes you to make a sale allows you to monitor the cost variables 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 are to 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 or ones that merit some extra effort to win.
12. Customer Appointments
What it measures: The number of individual customer appointments (or calls) a salesperson makes
Why it helps performance: Building customer relationships is the foundation of your sales process. Measuring customer interactions is an excellent way to ensure that sales reps are being intentional about connecting with new sales opportunities and fostering strong relationships with current customers. This is typically measured by tracking customer appointments, phone calls, or video meetings.
Most sales reps are expected to have a specific number of customer appointments every day. This helps the business know that X number of appointments would translate into Y number of new customers. Additionally, it helps sales teams discover that the best customer relationships require a certain number of “touches” each month or quarter.
Pro tip: As our world becomes increasingly digital, may sales organizations use video conferencing to connect with prospects and customers. At Fit Small Business, we use Zoom on a regular basis to foster robust communication.
13. Sales Activities
What it measures: The number of activities, such as emails sent, leads qualified, or cold calls conducted
Why it helps performance: A successful sales process is the result of the daily activities salespeople conduct. Measuring the specific activities that impact your sales process helps you increase the number of sales opportunities throughout your pipeline.
As you establish this metric, look at your top performers and identify what level of sales activities contribute most to their success and result in the highest amount of revenue. This helps you set activity goals for the entire sales team.
Sales activity report in Pipedrive
Why Sales Metrics Matter
Sales metrics improve sales performance by providing clear data about how you are currently performing in areas that you have decided are important to the success and health of your business. When used properly, they are more than just a number—they give you valuable information about what is happening within your sales process, and what areas deserve the most attention.
Sales metrics help you improve your sales performance by:
- Providing a baseline to measure against: You can analyze various metrics and create a baseline to gauge your performance over time.
- Motivating salespeople: There are specific components of performance you should measure to keep sales reps accountable and motivate them to perform their best based on their individual performance metrics.
- Measuring change over time: Metrics help you observe trends and patterns in your business, whether it is with individual sales reps and their performance, or with your overall organization. This helps you adjust your sales and marketing strategies as needed.
Bottom Line
Understanding which sales metrics will best help your team improve sales performance is an important aspect of maximizing overall effectiveness. The metrics described in this article help you understand 13 of the best metrics for improving performance and that can be used to motivate your sales team. Incorporate them into your sales strategy to increase accountability and maximize sales revenue.
It can be cumbersome to track sales metrics manually, but fortunately, there are sales tools that help automate your sales metrics. For example, Pipedrive CRM helps you track the key metrics that you should measure and has a highly visual interface, including a pipeline tool that makes it easy to evaluate deals as they move through your sales process. Sign up for a 14-day free trial.
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