For most growing businesses, the problem they face isn’t having too little data on leads — it’s too much data!
With the amount of sales data they generate in a given year, month, or even a day, things can get overwhelming. Hence, there must be a way to dig deeper into that data and turn it into usable insights. The answer is Sales Performance Metrics.
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.
What are Performance Metrics?
Performance metrics are a measure of an employees’ tasks and activities that can be tracked. They are often quantifiable and can be measured over days, weeks, months, or years.
Ranges are kept in order to identify ideal performance. Generally, performance metrics are used by a business to determine if the outcomes align with the goals that were set. If a performance metric falls below the range that was set, this indicates underperformance, whereas if an outcome falls within the range or above it, that indicates the business is meeting its goals and is performing well.
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 give you an exact picture of which sales representative has completed his targets, how many deals he has in the pipeline, and how much time will they take to convert deals.
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.
Sales team performance can actually impact the overall sales productivity.
2. Win Rate / Conversions
The conversion rate is the number of leads that ultimately convert into customers. For example, 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. 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 is 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 at the end of the day, your revenue is what counts the most.
Total revenue isn’t how much revenue you’re bringing in, but also is an indicator of how much revenue your business is generating within a specific time frame. This metric allows you to measure the progress of your business in generating sales revenue.
One can say, this is a primary reason why most businesses have shifted to the subscription-based model. Experts suggest businesses have monthly recurring revenue to make the entire process more predictable, thus making your sales forecasting more accurate.
4. Sales Funnel Activity and Leakage
Realistically speaking, not all the leads in your sales funnel will make it to the bottom.
Therefore, it is all the more important for sales managers to know exactly where in the funnel they’re losing the most prospects so they can find corrective measures to plug those holes.
Measuring sales funnel leakage gives you the exact stage where prospects drop out of your funnel.
For example, if there is a huge drop-off and only half of the leads were interested to do a discovery call, which means your sales team isn’t being effective. Only the sales managers figure this out, they will be better able to take appropriate measures to fix sales funnel leakage.
5. Product Performance
For a business to grow, alignment of the sales and the marketing team is a must. This is largely due to the fact that the marketing team plays an equally important role in bringing in qualified leads to the sales team.
What works best is when the sales managers 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.
6. Pipeline Sales Metrics
As a business, one needs to audit the health of your sales pipeline with these metrics. To better understand the data, you must measure the following metrics by a specific time frame, such as a month or quarter.
- Average length of the sales cycle: This refers to the amount of time it takes for leads to go through the sales pipeline until it becomes a closed-won deal.
- Total open opportunities: This refers to the number of open deals by a team or individual sales representative.
- Total closed opportunities: This refers to the number of closed-won deals.
- Conversion rate by sales funnel stage: This is the number of converting leads at every stage of the sales funnel and can be measured by team and by an individual.
- Total value of sales: This metric represents the income generated directly and exclusively from sales activities.
- Annual contract value (ACV): ACV refers to the amount of revenue a contract generates per year.
- Win rate: This refers to the number of deals won divided by the total number of deals, and can be measured by team and by an individual.
Kylas CRM helps you to track Sales Performance Metrics easily!
With features such as report generation and usable performance dashboards in Kylas, you and your sales team can start making better use of your sales performance metrics? Try Kylas free for 15 days and see how we can help you improve your sales performance!