Your sales manager can probably share a dashboard showing the figures that she considers most important to company sales progress. In addition, your CFO has tools that track the financial health of your business. But are you tracking the right sales metrics? As Zig Ziglar once wrote, “Don’t count the things you do, do the things that count.” That’s exactly why we wanted to share some ideas on choosing the right sales metrics for your business.
To get started, it’s highly advantageous to map your sales funnels & workflows. Depending on your business model, simply the exercise of mapping the customer journey can create insights on what the right sales metrics are for you.
Look for statistics that map to to the goals of your business and to repeatable tasks you can refine over time.
Sales Metrics: Prospecting [Top of Funnel]
How many new leads are coming each week/month? Inbound leads reflect your marketing message and your channel selection.
How many new leads are added by your in-house sales team? Make sure they’re tagged by source so you can measure channel success.
Lead response time
How much time passes from the time a lead is added until the first contact? 75% of prospects do business with the company that contacts them first.
How many emails are sent to new leads? Measure the open rates, click rates and pre-close rates from them.
Direct mail sent
How many “snail mails” are sent to new leads? Measure the actions taken from them (e.g., calls, emails, website visits to track channel success.
Market qualified leads
How many inbound or outbound leads move ahead in the funnel? All leads are not created equal.
Qualification rate by source
What are the best sources of your new leads? Since all leads are not created equal, pay attention to where the leads that convert originate.
Sales Metrics: Qualifying [Top of Funnel]
Follow up calls completed
How many calls got through to market qualified leads? Bear in mind that making calls is not pure sales, but a measurable component of the process.
Sales qualified leads
How many calls were completed to truly qualified leads? Monitor by source, agent, etc. to optimize performance.
When a lead asks about pricing, it can be a transactional signal. Their reaction to pricing can help qualify them for future contact.
In many industries, a sample, trial or demonstration helps qualify a lead. Track how many leads test your product or service.
If you’re selling a service or product with a longer sales cycle, you may track how many times your team engages face-to-face or online with prospects.
Time spent selling
Many sales teams benefit from tracking time-consumed, especially as it relates to closed business. Short calls can mean lower sales, while long ones could mean time wasted.
Rate of follow-up contact
How often are leads contacted again? What is the time period between calls? If you don’t follow up, you probably won’t get business. The average number of times a lead is contacted is 1.5, and 90% of leads are not contacted after 30 days.
Sales Metrics: Advancing opportunities [Middle of Funnel]
If a sales qualified lead receives a proposal (formal quote), you have a new pipeline opportunity. Tracking how often you get to the proposal phase is critical.
In many industries, a more serious trial (formal evaluation) is needed to convince the customer to complete the transaction. Track how many leads deeply test your product or service.
After a sales qualified lead receives a proposal, you can further qualify the opportunity. Did they react favorably or reject it outright? Once you have a response, you can qualify the opportunity.
Deals in negotiation
When qualified opportunities enter negotiation, they are even deeper in the funnel. Track how many get “to the altar”.
Sales Metrics: Closing [Bottom of Funnel]
As the saying goes, “always be closing.” Sending the contract is a good measure of real opportunities. If you have an abundance of unsigned contracts, it’s time to learn what goes awry.
As your business grows, chances are that you’ll also have bigger accounts buying from you. Deal size may reveal who your sales agents are targeting or where you’re having success in your funnel. Accordingly, you may target more accounts in this average range.
How many deals close when compared to how many are presented? This metric may indicate a need to train better on closing techniques, review pricing or develop more tools to close (e.g., social proof, service guarantees, onboarding tools).
How much time does it take to get from prospect to closed sale? If your sales cycle is 18 months, you may need patience or other ways of sustaining the business while deals simmer on the stove. You may want to develop tools & methods (see Win ratio above).
Cost of sales to revenue ratio
A critical factor in many businesses is the sales effort required. If you have a small sales team with substantial revenue, you may want to scale the team to grow revenue even more. If you have a massive sales force and meager sales, your revenue ratio may be problematic!
Sales by contact method
Calls versus emails versus SMS. What works? What doesn’t? If your sales team is crushing it with deals from email campaigns, leverage that channel. If your outbound calling numbers are horrible, do more training or adjust your approach.
Which of your sales reps are generating the most revenue? It’s definitely worth knowing – find out what the top performers are doing that works. Share that knowledge with the entire team.
Perhaps the ultimate metric is revenue. If you monitor nothing else, you probably now sales by week, month or quarter. Hopefully revenue exceeds expense…
Choosing YOUR Best Sales Metrics
Our exhaustive list of sales metrics is not a checklist – it’s a grab bag. Help your sales manager design a new dashboard showing the figures that YOU consider most important to company sales progress. Start simple. Think about the top of your sales funnel first. Then work your way deeper through your closing metrics. Review the numbers regularly (daily, weekly, monthly, quarterly, annually) to see the patterns and trends (note, there’s no point in measuring if you don’t review!).
In addition to reviewing the numbers regularly, occasionally review what you’re measuring. We’ll discuss that review process in a future article, but for now, just know that your business and its underlying measurements will change over time.
See our related article: Common Problems with Sales Metrics