Metrics are essential for management to understand if reps are on track to deliver results and to identify areas for improvement. You cannot make continuous improvements and refinements without them. They need to be actionable and predictable. While there are many standard metrics, many will be unique to your sales environment and go-to-market strategy. It is important to select and track only the ones that are critical to your operation and that incent the behavior you want from your sales organization. These sales metrics will be helpful predictors for which team members will meet their sales goals and can help keep your team focused on those goals daily.
Ideally, you want to start tracking metrics from the beginning even though your new reps will have a ramp period during their onboarding. Tracking sales metrics is the fastest way to get to a scalable, repeatable sales model.
Metrics fall into two categories: quantitative and qualitative. Under quantitative metrics there are activity metrics, productivity metrics and conversion rates.
Activity metrics are the guidelines for success. Activities lead to results. If you are not achieving the desired results, the root cause may be in the rep activity levels. Without tracking activity levels, it will be impossible to understand the cause of the shortfall in results. Activity metrics can be considered leading indicators and predictive of future results. However, it is important to recognize that the future results, closed sales, are the most important metric.
Productivity metrics are metrics that measure what a rep produces or their results. Quota and commission are based on selected productivity metrics. When a rep is not achieving the desired results the first place to look for a reason is back to the activity metrics. If the activity metrics are on track and they are still not producing the desired results it may be due to a skills gap. If achievement of results is across a broad set of reps it may be due to a market shift in terms of demand for your product.
Conversion rates enable managers to measure individual rep performance, determine what is working and identify areas for improvement. These metrics also give reps the ability to understand and prioritize their daily activities.
Conversion rates also give Sales a sense of where the most deals are falling out of the funnel so steps can be taken to reverse the trend and improve conversion rates.
Finally, conversion rates give Sales predictability. If you know your revenue target for a given period and you have Pipeliner CRM: Mirroring Your Sales Process you can work backwards from the target revenue number to understand how many leads must be generated to achieve that number.
These metrics measure the quality of an activity or the inputs and outputs to Sales. For example a lead rating is an example of a qualitative metric. Whether an SQL (Sales Qualified Leads) is accepted by a Sales rep is also an indication of a qualitative metric.
Qualitative metrics enable you to improve the quality of the output of your organization or request better input. For example, if the rating given to an MQL (Marketing Qualified Lead) is lower than the rating allocated by the marketing automation system it is an opportunity to work with marketing to have them adjust the lead scoring to better align with what is required for a better quality MQL.
Focus on Results
The above outlined metrics are keys to understanding how the team reaches their ultimate goal; closed sales and pleased customers. While all activities and sales metrics are important, goals need to be reached on a daily, weekly, monthly and quarterly basis. Sales managers can keep the ultimate goals top of mind by displaying closed deal leader boards, sending out weekly standing emails, and engaging the team in goal orientated sales competitions.
Due to the importance of metrics for an Inside Sales team, they must be looked at frequently. You should not wait until the end of the quarter to view metrics. Key metrics should be viewed, daily, weekly and monthly for an inside sales team. This will allow you to make course corrections quickly and improve the desired results. For more on improving your sales funnel and goal setting, check out our book.
What metrics will you establish and track?