Data is the world’s most valuable commodity.
It drives transformations like nothing else in a business, providing useful insights, critical guidance, and powerful perspectives. Within your company, there are few teams that rely more on data than your sales professionals.
The good news? Sales performance metrics have never been more accessible. We have countless tools in our environment, all churning out more information than we can handle. The bad news – it’s almost impossible to know what to track when there are so many data points to consider.
The key to success is narrowing your focus. Instead of trying to track everything, your business needs to pinpoint the most valuable metrics to measure sales performance.
That’s what we’re here to help with.
In this article, we’re going to look at which sales performance metrics are the most lucrative to your team, and how they can help you spot everything from bottlenecks, to new opportunities.
What Are Sales Performance Metrics?
Let’s start simple.
Performance metrics are measurements of the activities that happen in a business. They are statistics tracked over time that can be quantified into useful figures that company leaders can use as guidance and benchmarks for growth.
With the right sales performance measurement strategies, you can figure out both where you’re getting the most return on your investment from your sales team, and where you’re missing out on crucial chances to earn.
Long-term, analysis of these metrics often focuses on improving your sales performance, increasing customer satisfaction, and creating a more efficient team.
Short-term, your immediate goals will often tell you which metrics you need to consider. For instance, if you want to improve the number of leads that you’re getting in the next 6 months, you’ll need to look at things like the number of leads contacted, and number of opportunities created.
Why Measure Sales Performance Metrics?
As helpful as the right metrics can be, tracking down the best data for your team isn’t easy.
The latest figures indicate that we’re creating about 2.5 quintillion bytes of data every day. Sorting through all of that information to gain useful insights can often feel like searching for a specific drop of water in the ocean.
However, the right metrics are worth the effort. They help you to evaluate performance in various areas, so that you can make decisions about your future based on real, authentic knowledge. For instance, if you notice that your revenue is dropping from one month to the next, you can use your sales performance metrics to find out why that is.
Monitoring sales analytics with the correct metrics:
– Increases performance by showing you the bottlenecks in your business
– Optimizes sales activities by indicating which strategies work best
– Delivers new opportunities by highlighting under-served areas
– Improves accountability so that you can stay compliant in your industry
– Helps you to create training strategies that enhance employee performance
– Increases the satisfaction of both employees and customers alike
– Convinced? Then let’s take a look at the kind of sales performance measurement options you need to consider.
12 Critical Sales Performance Metrics to Track in 2020
First things first, it’s worth noting that every business is different.
The metrics that you choose to measure first when you’re assessing your performance might not be the same as the analytics your competitors focus on. You may even find metrics beyond the 12 mentioned here that are valuable to your brand.
However, we’ve found that most leading companies end up assessing these metrics at one time or another. Let’s take a closer look.
|Top Sales Performance Metrics
1. Number of leads created
2. Number of opportunities created
3. Lead to opportunity conversion rate
4. Number of quotes or demos delivered
5. Number of deals closed
6. Quote-to-close ratio
7. Sales quota attainment
8. Total revenue
9. Revenue by territory
10. Average deal size
11. Expansion revenue
12. Average sales cycle
1. Number of Leads Contacted
There are two ways that you can collect leads for your business. The first option is to wait for your audience to come to you, responding to your marketing strategies and organic promotion.
The second option is to reach out to potential customers through calls, emails, and other forms of contact. If you’re using outbound marketing to ramp up your sales, then you’ll need to keep track of the number of leads you’re actually contacting.
This KPI tells you exactly how active your sales reps are. What’s more, it can also show you if there’s something wrong with your funnel. You might decide that increasing your reach rate is essential for your organization’s growth, and therefore invest in a CRM tool that comes with a built-in predictive dialer to help you reach more people.
2. Number of Opportunities Created
Contacting a lead doesn’t necessarily mean that you’ll create an opportunity every time.
Some of the people that your sales reps connect with simply won’t want to invest in your service or products. You can’t win every time.
However, keeping track of the number of opportunities that you create is essential to determining whether you’re investing in the right strategies for lead acquisition. If the ratio of calls made to opportunities created is too low, then you might need to go back to the drawing board.
Maybe you need to start approaching your customers in a different way – such as through SMS or messaging? Perhaps your marketing message needs to be different, or you need to update your buyer personas to ensure that you’re connecting with the right people.
3. Lead to Opportunity Conversion Rate
Another commonly-used measurement rate is the “lead to opportunity” conversion rate. Of the new prospects that your reps reach out to – how many of these actually convert into customers. Notably, this doesn’t just look at “opportunities” to create paying clients – but genuine conversions.
Your sales plan should help you to turn as many opportunities into paying customers as possible. If it doesn’t, then you need to go back and figure out what’s going wrong. Perhaps the offer that you’re giving potential clients just isn’t as attractive as you originally thought.
Maybe you need to dive deeper into your customer research to find out what your audience really needs from you.
4. Number of Quotes or Demos Delivered
You’ve probably noticed that countless SaaS companies and other brands today don’t push their customers to go straight into a paid subscription. Not every client goes straight from opportunity to customer – many of them will want to try out what you have to offer first or take some time to consider your proposal.
Tracking the number of quotes or demos delivered to your audience will help you to see how many warm leads your company is developing. In other words, if someone asks for a quote or a demo, then they’re already interested in your brand. Tracking sales performance metrics like this will show you if something is going wrong when people actually get your quotes or trials.
If you see a sudden drop in leads after the quotes go out, there may be something wrong with your pricing, or the way it’s explained. If your demos lead to nothing, perhaps you’re not showing off your best features?
5. Number of Deals Closed
This is often the most valuable sales performance measurement for most companies. Your conversion rate or win rate highlights how many of your leads ultimately become customers. If you get around 500 leads per month, and about 50 of them actually buy from you, then you have a conversion rate of 10%.
Using this metric will help you to calculate exactly how many leads you need to reach your revenue targets. For instance, if your monthly quota is around $800,000, and your average deal size is $1,000, then you know that your team needs to close at least 800 leads for you to reach your target.
You can also use your win rates over time to see whether your reps are becoming more effective, or if you might be losing opportunities based on a change in your strategy. It’s worth keeping in mind that sometimes your win rate will drop when your business grows.
Shifting from SMB to mid-market or mid-market to enterprise can be a big step, and it often reduces close rates slightly. Fortunately, with the right tools, like Spotio, you can make sure that your managing leads and tracking sales activities carefully, so that you don’t miss out on any opportunity to continue growing.
6. Quote-to-Close Ratio
Some people consider the quote to close ratio to be just another version of measuring “win rate”. However, these sales performance metrics can actually give you a deeper insight into how effective your team is at closing a deal. While examining your win rate just tells you how many conversions you’re getting on average, a quote to close ratio highlights the strength of your sales process.
Your sales closing ratio demonstrates how many leads acquired by your sales team actually turn into paying customers. You can even go a step further with this metric if you like and figure out how many of that number turns into repeat clients too.
With this number, make sure that you benchmark your performance against historical trends and future business targets. This will help to ensure that you’re moving in the right direction.
7. Sales Quota Attainment
We mentioned above that looking at your conversion rates can give you an insight into how many deals you need to close to reach your targets.
Sales quota attainment shows you whether you’re actually coming close to those targets or not. Importantly, tracking this metric will give you an insight into how well your team is performing. However, when you compare it with other metrics, like lead to close rate and number of leads contacted, it can also help you to determine whether you’re being unrealistic with your goals.
Perhaps you need to hire more staff if you want to get anywhere close to the number that you were predicting. Or maybe your staff just needs some better tools to help them reach their goals. Either way, your sales quota attainment metric will help you to figure it out.
8. Total Revenue
Another extremely important metric for most sales teams. Total Revenue essentially tells you how much money you receive through a specific window of time. This includes discounts, returned merchandise and products, and more. It’s a bit of a nuanced metric.
If you’re a subscription business, you can track revenue on a monthly recurring basis. You can also look at annual recurring revenue too.
Ideally, you’ll want to be creating a business plan that allows you to increase your total revenue incrementally each month.
9. Revenue by Territory
This metric speaks for itself.
While looking at your overall revenue is valuable, it often helps to dive a little deeper into the numbers. You can split up your revenue results by things like percentages of renewing customers, or percentage of new business.
There’s also the option to check out which areas of your company are getting the most sales if you’re spread across different geographies. This will give you a better insight into both your target audience and which strategies are working best for your team.
10. Average Deal Size
The longer you run your company, the easier it will be to predict how much you can expect to make from each interaction with a customer.
Average deal size is one of the most overlooked metrics to measure sales performance – but it can be extremely valuable. You calculate this figure by dividing your total number of deals by the total value of those deals.
Looking at this metric on a quarterly or monthly basis can tell you if your contracts are staying the same or getting larger or smaller.
If you’re trying to grow your company, average deal size can determine if you’re moving in the right direction. This metric can also help you to spot potentially risky deals that are outside of the scope of your company, or too small to deserve your attention.
11. Expansion Revenue
Expansion revenue is sometimes referred to as Expansion MRR or monthly recurring revenue. This metric is used to measure the amount of additional revenue that’s coming from existing customers in your network.
Since it can cost up to five times more to acquire a new customer than maintain an existing one, this is a pretty important number to track. To calculate your expansion MRR for a given month, add all the additional revenue from upsells and cross-sells from current customers that occurred in that month.
Most companies will calculate their expansion revenue as a percentage rate so that it’s easier to compare it to their previous months. Used correctly, this metric can be a great insight into how satisfied your existing customers are too!
12. Average Sales Cycle
Finally, the average length of your sales cycle is always worth looking at.
You might find that some reps are closing a deal in three weeks, while others are closing in ten. You may also learn that the reps that take longer to close end up with happier, more valuable customers.
The key to success here is figuring out which sales cycle length produces the most valuable closed deals for your company. Once you know that, you can begin adding specific processes to your sales cycle that helps to drive up your revenue and opportunities long-term.
Monitor Performance Metrics with a Sales Dashboard
Getting to grips with all the valuable sales performance metrics you can track can be a complicated process. There are a lot of numbers out there that can give you useful insights into your company, and ideally, you don’t want to ignore any of them.
That’s why it’s always a good idea to have the right tools in place to help with your analytics. A sales dashboard gives you an all-in-one aligned environment where you can track key performance metrics in seconds. These dashboards come equipped with useful tools for tracking sales performance both historically and in real-time. What’s more, they can give you incredible reports that highlight precisely where you need to invest more time into your growth.
With a sales performance dashboard, you can set up a friendly competition between sales agents by highlighting your top-performers, pinpoint new opportunities, and eliminate problems faster than ever before. For a business in search of growth, there’s no tool more valuable.
SPOTIO is the #1 field sales acceleration and performance management software that will increase revenue, maximize profitability, and boost sales productivity.
Want to see a product demonstration? Click here to see how SPOTIO can take your sales game to the next level.