There’s no denying that metrics matter. They allow us to do everything from tracking goals and determining compensation to developing sales strategy.
When I work with clients, there are varying degrees of maturity in the sales metrics they track. I’ve found that by putting a focus on metrics, your sales professionals and sales results will benefit through improvements in:
- Business acumen that comes with looking at the bigger sales picture, promoting an understanding of how high quality selling truly impacts the business
- Leading indicators like sales activities, pipeline quality, and territory planning
- Lagging indicators, such as average order growth and sales quota attainment
These are the eight sales metrics that matter most, along with ideas to implement them within your overall sales strategy.
Revenue potential. For every opportunity in the sales pipeline, a professional should know the top-line revenue potential and the bottom-line profit potential. If profit potential is below expectations, there needs to be a plan in place to build that profit back to your baseline levels and improve over time.
Profitability by salesperson. This metric ties to sales margins, but with a manager’s viewpoint. As a sales leader, being able to review profitability by salesperson both individually and in the aggregate will help you pinpoint areas to improve.
Average order size/average account size. After reviewing this metric with one client, it became apparent that their sales professionals were comfortable with the smaller opportunities but were falling short when it came to larger deals. Because we had the data on average order size and average account size, we were able to focus in on this and refine their sales process to improve their larger deals.
Target account status / Top 5 opportunities. This metric is useful for both account management and prospecting. One client has a tiered account system and sales teams assigned by account, and this allows them to know the top sales opportunities within those accounts, and to adjust their sales strategy as needed.
New meetings. This metric calls for a balance between quantity and quality. It also shows a sales manager how successful their teams are at cultivating new relationships and earning those first sales meetings. Coaching can come into play here in helping the sales professional run a great first sales meeting and qualifying any opportunities that come from them.
Sales Pipeline Metrics
Closing percentage. Closing percentage gives you a lot of data about your sales professionals, along with knowing how closely they monitor their own performance. Depending on your industry and company-specific trends, this data can tell you if they need better quality and quantity in their pipeline, where deals are getting stuck, or quarterly trends. This data can also help you select deals to conduct a win/loss review onto learn key lessons for the future.
Length of the sales cycle. How long it takes an opportunity to make its way through your sales cycle can tell you if it’s simple or complex, if it’s getting stuck at certain points in the process, or if there are skills your team needs to build to help them move their opportunities to a win or out of the pipeline.
Quality and quantity of the pipeline. In the sales assessment work I do with clients, their sales professionals are asked to submit several deals for analysis that they consider to be “late stage.” In other words, they’re considered close to being won. A consistent theme is that a large percentage of these deals, when analyzed on 19 criteria, aren’t even truly qualified, let alone being close to won. This speaks to pipeline quality because it impacts a company’s ability to forecast product, people, and cash flow into the business. It also can make a sales professional complacent in filling the top of the pipeline with quantity, because they “think” these unqualified deals are going to close – so they put off prospecting and filing the top of the funnel.
How to Implement Metrics in Your Sales Development Plan
The good news is that you may already be tracking some of these metrics, while others are new for you to consider. As you’re deciding which metrics to focus on, below are some ideas:
Get your CRM and sales process in order. These are the foundational pieces that will support the implementation and tracking of any sales metrics you choose.
Perform a win/loss review on your current metrics. What are you currently tracking, and what have the results been? This will help you to determine which metrics are providing the data points you need, and which metrics aren’t as relevant as maybe they once were.
Decide on the top five metrics that will create the most sales growth for your team. Too many metrics are as dangerous as either not enough or not the right ones. When you’ve landed on those top five, put your laser focus on them, and use them to coach and guide your team. Make those metrics part of their action plans and quarterly business reviews. After two quarters, evaluate those metrics and make any necessary adjustments.
Learn More In a Free Webinar
Would you like to learn more about sales metrics? Join us at SMM Connect for a special masterclass on Tuesday, July 12, 2022: Critical Sales Metrics Every Leader Should Know and Track. This session will provide tangible actions for sales leaders and sales professionals so you can grow your sales results. Learn more and register here.