Tracking the wrong sales metrics can lead to resources being allocated in the wrong direction for the business. In this article, we take a look at which key sales metrics every sales team should track.
Why Track Metrics?
Successful businesses collect and assess metrics in almost every area of operations from HR to finance. Doing this helps them gain a clear idea of their past and current performance. Data collected can be used to track progress towards business goals, structure incentives and bonuses, identify current and potential issues, and steer your business towards future growth.
Many businesses already measure some sales metrics such as sales revenue as a way to identify the performance of their sales team. However, growing your scope of sales metrics will help you increase visibility and understanding of individual and sales performance as a whole.
Taking the time to consider which sales metrics give you the best and most actionable insight into your business will help you ensure that any resource spent on metric collection and analysis will drive the biggest possible return on investment.
Company Goals & KPIs
Every sales metric you collect should show you how well the sales function helps the business move towards its ultimate goals. Measuring metrics against company KPIs can be a good way to highlight sales overall effectiveness.
These metrics are unlikely to provide you with granular detail on how to optimize your sales but will highlight potential issues that can be investigated further by diving deeper into thedata.
Key metrics that you may measure here include:
- Total revenue
- Revenue by product or service
- Revenue by market or business area
- Revenue generated by new business
- Year-on-year growth
- Market penetration
Sales Rep & Team Performance
When assessing your sales performance you will need to identify the individual performance of sales representatives or teams. Poor performance by any individual or team can highlight an area which needs close attention and a potential reallocation of resources.
Tracking these metrics is powerful when it comes to sales performance reviews. Identifying areas of concern in the performance of sales reps or teams does not necessarily mean that they are not doing their job. Time should be taken to understand the reason for this, which could span from market changes to lacking the tools they need to get the job done.
Rep and team performance can be tracked and assessed by using the following metrics:
- Number of sales by rep or team
- Revenue of sales by rep or team
- Contracts signed by rep or team
- Customer Lifetime Value (LTV) by rep or team
Overarching sales metrics will help you paint a clear picture of how well individuals and teams are performing and contributing to the overall goals of the sales function and business.
Tracking sales activity metrics on an individual, team, and overarching basis will provide you with the information you need to see which activities are being executed and how they contribute to overall success.
Data on sales activities will also allow you to identify areas to increase efficiency and understand how extra resources may help you achieve greater results.
When assessing data on sales activity, you may choose to track the following metrics:
- Number of cold calls made
- Number of calls scheduled
- Number of emails sent
- Number of interactions on social media
- Number of meetings booked
- Number of proposals sent
- Number of referrals made
Measuring activity is a good way to assess the productivity of your sales teams. However, you must also collect data on engagement so that you can assess the effectiveness of that activity.
For example, it may appear positive that a sales professional is sending 100 sales emails a day, but if only 5 of those emails are opened and no action is taken, then this could be considered a waste of time.
When measuring the effectiveness of sales activity, you may track:
- Email opens
- Calls connected
- Email replies
- Social media engagement
- Enquiries via social media
Inbound Sales & Marketing Performance
In most modern organizations, sales and marketing both play an important role in generating incoming interest. Measuring key metrics in this area is a good way to assess the performance of team collaboration.
Metrics may include:
- Leads generated
- Proposal requests
- Contact details collected
- Call back requests
Sales Metrics: Competitive Edge
They say you improve what you measure. So, taking the time to consider which sales metrics are most important to your business will help you drive improvement in the areas that count.
By doing this, smaller businesses can create a competitive edge, driving focus and resources into the areas that develop the greatest return.
Want to dive deeper into sales data and why it’s important for your business? Check out our article Does Your Sales Data Hold The Key to More Sales?
Which metrics could you measure that would help increase business performance?