The world rates sale professionals upon the number of sales they land or dollar revenue they generate. While both project unrivaled importance, they are not the only sales metrics a business can use to measure its sales team's success. There are more key performance indicators.
That’s why smart sales leaders obsessively establish clear, measurable key sale metrics as an excellent method of tracking the success of the sales team and improving outcomes.
To help you find the metrics that matter to your company, we've explored metrics critical for sale enablement today.
Sale metric is a data point that represents a company's, teams, or individual performance.
One of the powerful characteristics of successful sales leaders is that they combine success metrics that mark progress toward goals, not just results. Sale leaders are looking for predictive indices, which gives them a glimpse of how to adjust sale compensation, solve problems with their sale plans, and get a picture of what the future holds regarding performance.
Lead generation is a critical metric that reveals how well your sales team is prospecting.
To keep a keen eye on lead generation watch out on the frequency or the volume of a new opportunity that adds to the pipeline, average lead response time, percentage of leads followed up, percentage of leads followed up within target time range.
Check on the percentage of leads dropped, percentage of qualified leads, and customer acquisition cost too.
KPIs are important because they give the overall company performance. You can use them to analyze total revenue quickly, revenue by product or product line, market penetration, and percentage of income from new a business.
Other key performance indicators you can use to analyze your sales team includes tracking the percentage of revenue from existing customers, revenue from expanded contracts, cross-selling, upselling, repeat orders, and even more.
To dig even further, check on year-over-year growth, average lifetime value of user or customer, net promoter score, the number of deals lost to competition, revenue by territory, revenue by market, and cost of selling a percentage of revenue generated.
The percentage of opportunities won, the percentage of opportunity lost to a competitor, and the percentage of opportunities won by the lead source is a key metric in addressing the most critical stage of sales - the qualification stage.
This sale metric shows what the sales team is doing daily. This metric is manageable—the sales manager can directly influence them.
Follow up your sales team to ensure that every representative is hitting the allocated quota.
You can execute the follow up by checking the number of calls made, number of emails sent, number of conversations, number of social media interaction, number of meetings scheduled, number of demos or sale presentations, number of referral requests, number of proposals sent.
Activity Sales Metric is the leading indicator. These metrics predict your ultimate results.
Some metrics in this category probably won't apply to your business models.
The metric stems down to your own sales process, methodology, and strategy. For instance, if your sales team exclusively targets prospects at trade shows, the average initial-contact-to-meeting rate would better reflect how they perform.
On the flip side, if your salespeople target prospects exclusively on mail with sales prospecting tools, you'd check email sales metrics like email open-rate, response rate, engagement rate, and percentage of recipients who move to the next step.
Suppose your company outreaches prospects via phone calls you'd check for phone sale metrics like call-backs, percentage of prospects who agree to a conversation, percentage of prospects who move to the next step.
And if your team focus on social media outreach, check social metrics such as - percentage of LinkedIn connection requests, in-mail response rate, percentage of prospects engaged with on social media who move next step, conferences, trade shows events, number of meeting set, number of qualified opportunities generated.
An effective sale pipeline gives a clear understanding of sales` health.
Use metrics like average length of sale cycle, total open opportunities by months, total closed opportunities by month, the weighted value of pipeline by months, average contract value, win rate, conversion rate by sale funnel stage to monitor the health of your sale process.
Tracking customer acquisition cost creates clarity on the cost associated with growing your business and expanding your customer base. This is important for startups attempting to scale quickly or demonstrate their value to investors.
You can calculate CAC at a given time with the simple formula:
(Money + Time Spent)/ number of Customer Acquired
Knowing your CAC makes it easier to analyze your marketing and sale ROI so you can plan your budget accordingly.
The size of the initial customer purchase doesn’t limit the value they can bring to your business. CLV is the total amount of value a buyer provide over their lifetime as a customer.
Track your CLV at regular intervals to monitor how it changes over time.
To calculate CLV, multiply the amount of revenue you earn annually by the average customer's lifespan in years, then subtract your customer acquisition costs.
Measuring your monthly sales number over time provides a clear indication of whether your business is growing, shrinking, or stagnating. You can frame this crucial sale metric as a percentage of your monthly quota to see whether your forecasts are accurate.
Sale Cost Ratio is a valuable metric that reveals whether or not a sale is profitable. In plain English, it is a measure of whether the revenue you earn from the dealings outweighs the cost of the total expenditure you incur in closing a sale.
To calculate this ratio, compare how much your company is spending on sale versus the profit those sales bring in.
While these are ten key sale metrics, it's by no means a complete list. There are more metrics your company can focus on.
However, the concept of key metrics is critical because many businesses are constantly under pressure and have too many distractions that unless there`s a set of parameters to watch, companies won't understand the key drivers of success.