10 Key Sales Metrics Every Sales Team Should Track
There’s nothing but truth to the old saying, “What gets measured gets managed.”
Keeping track of sales metrics and overall sales performance has never been more important than it is today. The rise of digital sales tools has afforded salespeople virtually unlimited access to just about any data they seek.
In fact, there’s so much data available that many sales teams struggle to know which sales metrics to track, and how to use them to drive performance.
In this article, we’ll go over everything you need to know about sales metrics, including why they’re so important, which to track (no matter what type of business you run), and tools you can use to help the process.
Here’s what we’ll cover:
- What Are Sales Metrics?
- Why Tracking Sales Metrics Is Important
- Important Sales Metrics to Track
- Sales Activity Metrics
- Leading vs. Lagging Indicators
- Challenges in Tracking Sales Metrics
- Sales Tracking Tools
What Are Sales Metrics?
Sales metrics are specific data points that measure the sales performance of an individual sales rep, a sales team, or an entire organization over a set period of time.
Salespeople have always used sales metrics to track their performance and guide their strategy. Insight from sales metrics helps teams identify which parts of the sales process are working well, and which need attention.
Sales metrics also help sales teams:
- Monitor their progress on reaching sales goals
- Prepare and plan for scaling and growth by contributing to accurate sales forecasts
- Determine compensation plans, commission rates, incentives, and rewards
In other words, sales metrics analytics help sales teams make data-backed decisions to optimize the strategies and tactics that improve their results.
Why Tracking Sales Metrics Is Important for Sales & Marketing
Tracking sales metrics is clearly important for sales performance, but it also has implications for the marketing department.
Sales metrics act as a lagging indicator for marketing initiatives. We’ll talk more about leading vs. lagging indicators later in this article.
In simple terms, sales metrics help marketers determine how effectively their marketing strategies resonate with their target audience. Salespeople and marketers can use sales metrics to help them reverse-engineer their strategies and tactics in a way that improves results.
Sales metrics help marketing and sales teams create a scalable, repeatable process for success in both departments.Eliminate the guessworkDaily activity, engagement data, and outcomes right inside your Gmail or Outlook inbox
Important Sales Metrics to Track
While it’s true that tracking sales metrics is universally important to each and every company that wants to be successful, there’s more room for debate when it comes to which specific metrics are most important.
The truth is, the best sales metrics to track will vary by sales team, company, and performance goals.
What’s important for an enterprise company will probably not even be on the radar of a startup; similarly, SaaS companies need to consider different sales metrics than companies that sell one-and-done products.
That being said, there are several key sales metrics to track that will likely provide valuable insight to just about any company who wants to make data-based decisions on their marketing and sales strategies.
One of the most relevant sales metrics for any company to track is revenue.
Tracking revenue can provide salespeople with an incredible amount of insight into their performance. That’s partially because it speaks directly to the bottom line — which is obviously very important to monitor in order to be successful.
But tracking revenue is powerful for another reason: it’s an extremely flexible metric that can be measured in a variety of ways.
Teams can analyze a subset of the revenue metric — like the amount of revenue generated by individual sales reps — to determine how effectively each member of the team works.
They can also track revenue by product, revenue by territory, or average revenue per user account to determine which of their segments is most profitable.
Teams might track what percentage of revenue is generated by new business vs. existing business. SaaS teams may analyze annual recurring revenue (ARR). Tracking revenue can also help teams determine their year-over-year growth rate.
Tracking each of these sub-metrics born out of revenue helps sales and marketing teams create accurate forecasts and strategically plan for growth.
2. Average Customer Lifetime Value (LTV)
Average customer LTV represents the average total revenue that a customer generates throughout its contract with your business.
Here is the formula for calculating customer LTV.
This metric is useful in determining which customer segments are most lucrative to your business.
3. Market Penetration Rate
The market penetration rate is sometimes overlooked in favor of the “bigger” metrics like revenue, but it can be extremely insightful for determining your team’s current sales effectiveness, as well as your opportunities for growth.
Market penetration rate refers to how much of the total addressable market your company currently serves.
Here is the simple formula for calculating market penetration rate.
If your market penetration rate is currently low, don’t despair — that means there are plenty of opportunities to expand your reach. A low market penetration rate might indicate a need to revisit your ideal customer profile (ICP) and/or your specific sales strategies.
4. Quota Attainment
This sales metric is likely familiar to most sales professionals.
Quota attainment measures how close a sales rep or sales team comes to meeting their sales goals. It is usually measured per month, per quarter, or per year.
Here is the formula for calculating quota attainment. Quota attainment analysis helps sales managers adjust sales forecasts as needed, identify both top-performing sales reps and those that need coaching, and optimize their sales strategies.
5. Win Rate
Win rate is another straightforward sales metric that can go a long way in evaluating sales performance.
Your win rate measures the percentage of sales opportunities that become closed-won deals.
Here is the formula for calculating the opportunity win rate. This metric is slightly different than conversion rate, as it only measures how many conversions took place once a lead was deemed a true opportunity.
In other words, this metric helps sales professionals determine how effectively they make their pitch.
Win rate can be calculated based on individual sales reps or by the team as a whole. It can help sales managers determine how many additional deals will be needed to meet specific sales targets.
6. Sales Cycle Length
Sales cycle length refers to the average amount of time it takes for an unqualified lead to become a customer.
This is a popular sales metric, and for good reason — the most profitable sales processes are the ones that don’t take a minute longer than they need to.
Here is the formula for calculating the length of the sales cycle. Keep in mind that this sales metric will mean different things to different companies.
Although it appears at surface level that the shortest sales cycles are the most profitable ones, shorter does not always equal better.
Many sales teams that sell to enterprise companies, for example, can testify that the need for several decision-makers and consideration slows their sales process — but that’s not necessarily “bad.”
Instead of thinking about how to simply shorten the sales cycle, consider how your team can optimize it.
7. Deal Slip Rate
A team’s deal slip rate represents the percentage of sales opportunities that don’t close within the forecasted sales cycle.
This sales metric can shed a lot of insight into deals that are lost to the competition, or about which parts of the sales pipeline see the most leakage.
8. Cost of Selling
Many sales metrics pay close attention to the number of deals and amount of money coming in, but some teams neglect to look at the other side of the balance sheet.
It’s critically important that sales teams consider how much money they (and marketing) spend to make sales. Revenue sales metrics mean very little unless compared against the expense it required to generate it.
9. Sales by Lead Source
Determining how many of your sales come from each lead source (e.g., web traffic, LinkedIn or social media, lead magnet, etc.) is an important sales metric for optimizing sales strategy.
Not only will this sales metric help you prioritize your hottest segment of leads, it will also help your team strategize ways to more effectively reach the lagging segments.
10. Pipeline Coverage
Pipeline coverage refers to the value of a sales rep’s or sales team’s potential sales opportunities as it compares to their quota within a specific time frame. This sales metric is expressed as a multiple of the quota.
Here is the formula for calculating pipeline coverage. Pipeline coverage analysis helps sales professionals adjust their approach as they work so that they come closer to meeting their quota.
Remember, these are only a small fraction of the sales metrics that a team or organization can track. It’s up to your organization to determine which metrics and KPIs matter most to their goals.
Other measurable sales metrics include:
- Annual contract value
- Conversion rate by sales funnel stage
- Engagement metrics
- Overall conversion rate
- Customer acquisition cost (CAC)
- Average deal size
- Average profit margin
- Churn rate
- Net promoter score (NPS)
- Net revenue retention percentage
Remember, too, that as your business grows, your most important sales metrics are likely to change. It’s important to create and revisit your sales goals frequently to determine what sales metrics move the needle most at a given time.
Tip: We measured various of the above metrics to create a data trends guide. Check it out below.Sales Engagement Data Trends for Sales Managers to Know Going Into 2022Looking at hundreds of millions of tracked email activity over the past year, this ebook is filled with our top studies & findings to help your sales team accelerate results in 2022.
Sales Activity Metrics
As important as it is to track sales metrics that speak to your team’s output — that is, their measurable results — it’s also vital that sales teams track their own activity.
Tracking sales activity helps sales teams determine how much of their time gets dedicated to effective sales activities. It sheds light on which activities or processes make the biggest difference throughout the sales process.
Sales teams who want to improve their sales efficiency and effectiveness should consider tracking some or all of the following sales activity/sales productivity metrics:
- Percentage of time on manual data entry
- Calls made
- Emails sent
- Time spent creating content
- Number of sales conversations
- Number of sales tools used on a daily basis
- The number of social media engagements
- Number of scheduled meetings
- Number of demos or presentations
All of these metrics will help salespeople take a more careful look at how they spend their time.
The stark reality is that most salespeople spend only about a third of their time on revenue-generating sales activities.
Sales software like Yesware can help salespeople carefully scrutinize how their efforts are distributed, and which activities generate the most results.
Leading vs Lagging Indicators
As you may have been wondering, not all sales metrics are created equal. That’s not to say that they’re not all beneficial — but some sales metrics (like revenue-based ones) indicate a final result, while others measure input into the sales process (like number of calls made).
The difference between these two kinds of metrics is described as leading vs. lagging indicators.
Lagging indicators are ones that indicate your results. They are easier to measure, but difficult to influence once they are determined.
In other words, lagging indicators show you in hindsight how effectively your planning and execution addressed your goals.
Leading indicators, on the other hand, are ones that predict your results. They are factors that you can measure proactively — and influence accordingly — that dictate your ultimate results.
Sales activity metrics are good examples of leading indicators.
Both leading and lagging indicators are important pieces of the puzzle in measuring sales metrics.
Challenges in Tracking Sales Metrics
One of the biggest challenges in effectively tracking sales metrics is the sheer volume of the available data.
Many sales software tools make easy work of collecting and storing data, but those are the easy parts. More data does not necessarily equal better data; too many companies miss this point entirely.
The real challenge lies in figuring out how to leverage sales data in a way that improves performance.
Fortunately, there are some sales software platforms that help salespeople use data in a way that drives their success.
Sales Tracking Tools
If you’re serious about tracking sales metrics for analytics purposes, there are a few kinds of software that will go a long way in helping your team wrap their heads around the process.
First and foremost, you’ll need a well-adopted CRM. Most sales organizations pay for one, but many do not use them nearly effectively enough.
Leverage the capabilities of your CRM to automate as much data collection and management as you can, and ensure that everyone on your team is trained — and expected to participate — in standardized data management processes.
Sales Productivity Tracker
Many CRM systems help salespeople track their daily activities. If yours doesn’t, it’s worth it to invest in a platform that does.
These programs will give your team a good beat on the leading indicators that indicate performance results.
Buyer Activity Tracker
Sales engagement software is an underutilized resource in tracking sales metrics, but it proves to be a game-changer for teams who want to make data-informed decisions.
Yesware helps salespeople track how and when their emails are opened, how heavily leads and prospects engage with their content, and the best opportunities for following up to close deals.
With robust reporting & analytics capabilities, along with our ability to connect directly to your CRM, Yesware also helps users look at both leading and lagging indicators alongside one another to help optimize the pipeline.
You can then make data-informed decisions by always being in the know of what messaging is working and what’s not.
Does your team track sales metrics? What is your process like? How can you streamline it for better results?
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