Do you want to know what’s going on in your sales department? For most companies, the problem isn’t too little data — it’s too much data! The amount of sales data you generate in a given year, month, or even a day can be overwhelming. Sales performance metrics give you a way to tap into that data and turn it into usable insights.
But many sales departments struggle with knowing which metrics they should be looking at. The more data you collect, the more difficult it can be to see the big picture and tune into what you really want and need to know.
The best solution is to narrow your focus. Instead of tracking everything, track only the most important information that will help you to remain profitable, fuel growth, and make essential business decisions. When it comes to understanding trends and their resulting impact, less is more — here are the top five sales performance metrics you should be tracking:
1. Sales Team Performance
Sales managers should know where their sales team stands at all times. Your sales performance metrics should tell you at a glance who has hit their quota, how far away they are from quota, how many deals they have in the pipeline, how long they take to turn deals into wins, and what products they’re selling the most of (more on this one in a minute).
But also important to sales leaders is knowing if quotas are too high or too low. If you have less than 60% of your sales team not reaching their goals, then you may need to consider lowering your quota. On the opposite end of the spectrum, if you have 80% or more of your team hitting goals, then you likely have some that are coasting until the next cycle.
2. Win Rate / Conversions
Aside from individual performance, you should look at the sales organization’s win rate as a whole. The conversion rate is the number of leads that ultimately become customers. So, if you get 10,000 leads in a month and 10 of them make a purchase, then your win rate is 10%.
Knowing this metric can help you determine how many leads you need each month to hit your revenue goals. For example, if your monthly organizational quota is $100,000 and your average deal size is $1,000, then you know your salespeople need to close 1,000 deals collectively. And if your win rate is 10%, then you know you need 10,000 leads per month.
You can also review your win rate and conversions to see whether your sales reps are becoming more effective. If your win rate is increasing but the number of leads are remaining relatively stable, then your sales performance is improving.
However, if the win rate is dropping or you’re not receiving as many leads per month, then it could signal something is wrong with your process, sales team performance, or lead generation strategies.
3. Total Revenue
Your sales process is important, but but at the end of the day, your revenue is what counts the most. It’s not just a matter of how much money you’re bringing in, but how much money you’re generating within a specific time frame. Many business decisions are based on sales projections, not what you’ve produced in the past.
This is one reason why many businesses have shifted to the subscription-based model. Having monthly recurring revenue adds predictability to the process and makes your sales forecasting more accurate.
You should also be able to break down your revenue metric to see where your revenue is coming from. If you’re using the subscription-based model, your revenue sources will either come from new business, upselling and cross-selling, or renewals.
You can then look to see whether specific percentages in each of these categories are growing or shrinking. For example, if you noticed that many customers are churning after three months, you may shift focus to decrease churn, at which point your renewal percentage would climb.
4. Sales Funnel Activity and Leakage
Realistically speaking, not everybody in your sales funnel will make it to the bottom. But it’s important for sales leaders to know exactly where in the funnel they’re losing the most prospects so they can find better ways to plug those holes.
To track sales funnel activity and leakage, you’ll need to dial in to stage by stage conversions. for example, let’s say that half of your new prospects move on to a discovery call. Of those, half will make it to a demo with your sales rep. But in the end, only 1% actually end up buying.
This is a huge drop off considering that half of leads were interested enough to do a discovery call, which could signal that your sales team isn’t being effective. Knowing this, sales leaders are better able to take appropriate action to fix sales funnel leakage.
5. Product Performance
Sales and marketing alignment is a must, especially as a marketing has assumed a greater role and bringing in qualified leads to the sales team. Sales leaders that track product performance are better able to fuse this alignment with marketing by knowing exactly which products or services are bringing in the most revenue and the highest profits.
If a product is performing well, it’s essential to understand the context around its performance. For example, marketing may have launched a viral campaign that sent sales temporarily skyrocketing. Marketing needs to know how effective their efforts were so that they can continue to repeat their performance or make adjustments to improve.
LeadSquared is Sales Performance Metrics Made Easy!
Are you ready to start making better use of your sales performance metrics? LeadSquared makes it easy to set up usable performance dashboards that tailor your metrics to your company.
Try us out for free for 15 days and see how we can help you improve your sales organization!