What Sales Metrics you should Use to Track for Business Success

To have proper management of a company, you need to be able to measure all aspects of the business, especially sales. Thus when measuring sales metrics, it is not enough to have only the guidance of your intuition. You will also need to obsessively track and measure every aspect of your go-to-market model, sales strategy, sales team, and changing variables if you wish to improve your RIO for business success.

 To help you key into the significant numbers, I have compiled the ultimate guide for sales metrics when tracking sales performance.

What are Sales Metrics? 

Sales metrics refer to the quantification of key performance indicators (KPIs) that businesses target to hit when they need to meet revenue goals. The task and activities carried out by the company, and its employees are tracked typically with the help of software. The data generated is then used to determine how well a sales team is doing, and the necessary adjustments to be made for performance improvement.

Now here are some sales metrics you should consider tracking for business success:

Your Top Lead Sources

One important aspect of tracking your sales metrics is by filling your sales pipeline with qualified leads. To get the most out of your marketing efforts, you need to assess where the bulk of your sales leads emanates regularly. Examples of lead sources will include adverts, referrals, trade shows, or your website.

When you track these lead sources in your CRM, it becomes easier to review which ones generate the most leads weekly, monthly, quarterly, or yearly. The tracking can be done by exporting the primary data into spreadsheets or using the in-built reporting features in your CRM. What you look out for are the leads with the potential to become paying customers. So if the metrics reveal that specific channels keep bring in high-value leads, you can focus your marketing efforts around these high-value leads. Additionally, you can choose to diversify your lead whereby you want to break from the strong dependency of a single lead source.

Percentage of Sales Team Hitting Quota

The percentage of your sales team that meets or exceeds quota can be used as an indicator of whether your quotas are too high or low. Your quotas are probably not realistic if less than 60% of your sales team is not hitting the target. Also, you might have to hire better salespersons or lay-off the underperformers. Alternatively, whereby 80% to 100% of your sales team meet their quota, they’re likely coasting. Thus, you’ll need to review your quota-setting methods by increasing your targets.

The Length of a Sales Cycle 

A look at the average sales cycle length is an indicator of how efficiently your team is closing sales. A sales cycle length is the time starting from the first point of contact with a potential customer until the time a purchase is made. While the length of each business’s sales cycle may vary, in general, the faster sales are closed, the shorter the sales cycle. The tracking of this metric helps to reveal opportunities you can use in optimizing your sales process.

When tracking, compare the dates from the first contact until the sale was made and take note of the period between the two dates. You might notice that there are certain spots where the potential customers get stuck. This helps you know the right additional training your salespeople might require. Once they are well equipped with the right tools and resources, they can move leads along the sales channel more effectively.

Lead Conversion Rate

How well are your sales team successfully converting leads into closed sales? The lead conversion metrics are often tracked as a percentage of completed sales against all sales opportunities within a given time. For instance, where you get approximately 500 leads monthly and an average of 50 deals, your conversion rate is 10%. Therefore a low conversion rate could indicate a problem with your sales style. Alternatively, it may be an indicator that you’re filling your sales channel with unqualified leads and should re-strategize your marketing.

Most CRMs come with in-built reporting tools that can help you track your lead conversion data. Besides being able to have a glimpse of your conversion rate each month, you can also review your team’s performance over time. Whereby the metric fluctuates rapidly, you might want to consider going back to basics and ensuring that your team fully understands key tactics in sales and customer support.

Additionally, the metric allows you to calculate how many leads the business needs to make for revenue targets. For example, if a sales team quota per month is $900,000, and with an average deal size of $1,000, the team will need to close 900 deals. Thus with 10% of your leads becoming customers, you’ll need 9,000 leads monthly.

Focus on Average Purchase Size

Another way to track your business’ sales metrics is to keep an eye on your average purchase size. It comes handy for companies that offer multiple products or services. The distribution of small-ticket in comparison to big-ticket purchases might surprise you. Although businesses might tend to focus on revenue as a whole, taking a closure look at each sales component that makes up the income goes a long way when developing smart plans and projections. For example, for paper review services such as Online Writers Rating rather than focusing on the revenue generated generally from paper or essay writing services, it will also help to look at the number of students versus professional customers. Also, take a closer look at the numbers of those who need writing services for admission essay, thesis or dissertation help, research paper, term paper, or assignment.

Furthermore, when looking at the average purchase size per salesperson, where there is a large discrepancy between reps, it is probably a sign that some reps require more training on deal closing. And for those reps with high sales, you might want to incorporate their strategies into your sales marketing playbook.

Conclusion

While it might be tempting to track all of your business’s sales metrics, you might want to consider cherry-picking the top sales metrics that suit your company, business environment, market, industry, and sales team. And then work your way through till you find a winning formula for tracking your business success.