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The Most Important Sales Metrics to Track
Blog / For Sales Pros / Jul 9, 2020 / Posted by Alex Kaye / 969 

The Most Important Sales Metrics to Track

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With the latest tools available in the market, one can measure almost everything. Right from the number of your reps using CRM and cohort retention rate to the sales velocity and average time required to hire a new team member, there is an endless list of metrics, reports, and data points to track.

Examining all that data, elucidating it, and coming up with intelligent data-backed decision-making strategies can prove to be overwhelming.

The solution here is narrowing your focus. Rather than tracking everything, track only the most important activities. That way, not only will it be easier for you to comprehend patterns and their significance, but you will also be able to execute your analysis right away.

To make things less complicated, here’s a list of the top 10 sales metrics you should be tracking in order to develop a high-performing sales team.

1) Opportunity-to-win Ratio

The opportunity-to-win ratio, also known as win rate, quantifies the successful outcomes achieved by your sales team through each opportunity that came its way over a given time period.

By comparing the number of opportunities won to all closed opportunities in the same period of time (both closed-won and closed-lost), you can scale your sales team effectively since you get a high-level insight into its overall performance.

Sales leaders and managers can also make use of individual win rates to spot strengths and weaknesses among their individual sales reps and take corrective action accordingly.

How to calculate: 

Win Rate = number of closed-won opportunities/number of closed opportunities (closed-won + closed lost) in the same time period

2) Conversion Rate

The conversion rate, also known as close rate sometimes, is going to paint a precise picture of the efficacy of your sales funnel.

Since lead generation begins at the apex of the funnel and works its way down it into the hands of the sales department, this particular metric will give both sales and marketing teams an insight into the quality of leads coming into the funnel through marketing campaigns.

In order to measure your lead conversion rate, you first need to determine what is considered “converted” in your organization’s eyes. Under regular circumstances, a lead is considered converted when they become a paying customer.

How to calculate:

Lead Conversion Rate = (Total number of New Customers / Number of Leads) x 100

3) Average Number of Days taken to Close

The average number of days required to close a deal depends on how long it takes for sales reps to close a deal from the first point of contact with a prospect.

This metric provides detailed insight into how quickly sales reps can move prospects through the sales pipeline and turn them into customers with revenue streams for your organization.

Different types of prospects require various sales cycle lengths. For instance, a bigger opportunity may require a notably longer amount of time to close than one with a smaller value. Once you know the average number of days taken by each of your reps to close, you can then work towards accelerating the process and look for ways to eliminate repetitive sales tasks to increase their productivity.

How to calculate:

Average Days to Close = (Add all days it took to close deals for the month) / number of deals closed

4) Average Deal Size

Getting a fair idea of your average deal size will give you the headstart you need to grow the size of your deals.

This metric will aid you in keeping track of the revenue flowing your company’s way, and it will further act as a specification for how many deals need to be closed in order to arrive at (or even surpass) monthly quotas. It can also help sales managers to identify the opportunities that may be at an increased risk of slipping away.

Tracking this metric on a monthly basis will also help you better understand when and how your pipeline changes. For example, if the average deal size is increasing, you may now be attracting leads with a wider set of needs than you were in the previous months.

How to calculate:

Average Deal Size = Revenue $ of deals closed / Number of deals closed

5) Percentage of Sales Reps meeting Quotas

According to one recent report by Forbes, close to 57% of sales reps aren’t meeting their quotas at present. By identifying which sales reps are meeting quotas, you can measure the effort being put toward each of their accounts.

Though technology is currently overriding all other modes of communication throughout sales organizations, person-to-person interaction still plays a vital role in building strong bonds.

Meeting quotas has much to do with the personal effort every sales rep invests, spending more time on the needs of the clients and making quality connections. By monitoring this metric, sales managers can easily observe which person on the team is excelling, and which one isn’t.

6) Time Spent in Every Stage of the Pipeline

Keeping track of the number of deals in each stage of the sales pipeline will disclose how your prospects are working their way through your pipeline (and where the pipeline is getting obstructed or congested).

This metric will provide sales leaders detailed insight into how they can fabricate and experiment with different sales techniques to push prospects from one stage to the next. However, before they can begin, sales leaders must make sure that their sales staging is based on what is actually happening, rather than how sales reps feel. You can feel really positive about a deal, but that doesn’t always necessarily mean the prospect will close.

By being certain about the position of your prospects and identifying the ones at highest risk, you’ll be able to evaluate more accurately which stage of the pipeline your prospects are sitting.

7) Monthly Sales

Although this one might look like one of the most obvious metrics to track, it’s an excellent way to see if you’re forecasting your sales quotas in a way that is demanding but still attainable for the sales team.

It is a well-known fact that revenue is the ultimate sales goal, especially among a group of competitive sales reps. Therefore, monthly sales can also be a great indicator when tracking sales performance.

8) Churn Rate

“How good are you at keeping your clients?” is a question every sales organization should definitely be asking themselves.

If one was to only pick a single sales metric to focus on, churn would likely be that.

Knowing your churn rate means knowing how often —for what and why exactly—are your customers leaving you. The higher your organization’s churn rate, the more customers will end up in the hands of your counterparts. Knowing why customers churn is the key to making improvements in your sales techniques and designing effective strategies for future success.

How to calculate:

Customer Churn Rate = (Customers at the beginning of the month – Customers remaining at the end of that month) / Customers at the beginning of that same month

9) Average Lead Response Time

Your lead response time is nothing but the average time taken to reach out to a lead after they’ve been identified as a lead.

Each sales organization will have its own account of what a lead means to them, but normally it refers to a prospect filling out a demo request or downloading a piece of content from your website/app. According to InsideSales, a study done by Dr. James Oldroyd reveals that 50% of buyers choose the vendor that responds first.

No doubt about it, you want your contact with someone to be the first vendor they talk to—especially if you have tons of competition.

How to calculate:

Average lead response time = Sum of total min/hrs/day to respond for all contacts / total number of contacts

10) Total Effort being Invested

This last point isn’t your typical sales metric. Effort isn’t just a number that you can keep track of month-after-month, it is rather a representation of all efforts made by your sales team over a period of time.

Measuring effort can take multiple forms: number of presentations booked, calls made, emails sent – whatever your organization identifies as a prototype contributing to winning a deal.

After all, the little things can have a huge impact, both on successful customer relationships and future sales outcomes.

About Author

Alex Kaye is a veteran revenue operation at Rose Garden Consulting expert with more than a decade of experience. He has helped dozens of companies to achieve sustainable growth by crafting winning go-to-market strategies, providing data insights, and designing scalable business processes.

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