If you are in sales, you understand the value of sales metrics.
The question then isn’t whether you need to measure your sales, but what are the best metrics to measure sales performance?
Options such as revenue metrics, sales productivity metrics, and even sales team metrics can get overwhelming.
The good news is that only a few sales management metrics matter when it comes to B2B sales growth.
What are Sales Metrics?
Sales metrics are a chosen set of data measures that denote the performance of a salesperson, sales team, or company as a whole.
The metrics selected are typically tied closely to a company’s strategic priorities and include a baseline or standard.
Metrics can be both objective and subjective and include a list of metrics such as:
- Topline metrics
- Order metrics
- Rate of sales
- Growth metrics
- Sales efficiency metrics
- Key sales metrics
You might wonder which of these metrics is especially important or even key metrics in business?
The answer depends on your type of business, whether you sell products or services, and how you can capture and track data. Tools typically include a sales matrix, sales metrics dashboard, or sales analytics software.
The key is selecting target metrics or sales performance metrics to monitor and encourage improved sales performance.
How Sales Metrics Can Improve Sales Performance
You can’t improve what you don’t measure, and sales metrics are no exception.
Beyond the metrics themselves, frequent measurement and analysis is an excellent way to determine the success of individual sales reps and the performance of a sales team.
Think of sales metrics as KPIs (key performance indicators), enabling you to maintain a pulse on your sales and providing an opportunity for a course correction if issues or downward trends occur.
A more specific KPI meaning in sales refers to the key performance indicators relative to your sales pipeline health.
Top sales KPIs include both leading and lagging indicators to monitor the health of your sales pipeline. These are known as sales pipeline metrics.
Some examples of standard sales metrics that are leading indicators include:
- The number of qualified leads
- The number of presentations to qualified leads
- The number of quotes generated
- The number of quotes closed
Examples of sales metrics that are lagging include:
- Sales revenue generated
- Gross margin generated
When selecting sales metrics, it’s also vital to consider metrics at the macro and micro levels to maintain oversight of the sales team’s performance.
- Macro-level metrics capture the performance of the entire sales department, typically at the process level.
- Micro-level metrics capture the performance of the sales agent or sales representative, contrasting it against other individuals on the sales team.
Choosing the right sales metrics enables sales leaders to identify where to invest their time to improve sales processes, develop sales skills and apply coaching and mentoring strategies.
Top Sales KPIs: Track 10 B2B Sales Metrics
When selecting the best sales metrics, choosing the suitable KPIs (key performance indicators) is crucial to achieving your overall sales strategy and objectives.
What are sales performance metrics? The following questions will assist in helping identify what sales metrics you should introduce:
- Do we wish to maintain steady sales or increase sales?
- Is our sales process complex or simple?
- Do we have a large sales team or a handful of sales reps?
- Is our sales team salary or commission-based?
- Do we offer bonuses or additional compensation for specific sales activities?
Small companies seeking to grow should focus on metrics at the front end of their pipeline to ensure sufficient leads consistently.
Companies with a sales team of five to fifteen reps should monitor the steps between lead qualification and closing, ensuring every lead progresses through the sales process quickly without being lost or forgotten.
Larger organizations will want to break down their sales process, identifying where existing gaps or delays occur, then monitor using both macro and micro-level metrics.
The Top 10 Most Essential Sales Metrics to Track B2B Sales Growth:
1. Sales Revenue Generated
2. Gross Margin Generated
3. Average Win Rate
4. Number of New Contracts Signed
5. Number of New Qualified Leads
6. Number of Presentations Given
7. Average Time to Close
8. Average Contract Value
9. Number of Deals Lost
10. Customer Retention
Sales Metric #1: Sales Revenue Generated
Tracking sales revenue generated is a great way to ensure sales revenue targets are on-track and achieved. You can track this monthly, quarterly, or annually and can reflect both an individual and group contribution to revenue.
To improve this metric, you can increase the number of proposals, the value of the products or services on the proposal, or the quantity or duration of the products or services sold.
Sales Metric #2: Gross Margin Generated
Tracking the gross margin is the best method of ensuring your sales team sells high-value products and avoids or minimizes any discounting. In addition, this metric provides insights into the profitability achieved from sales rather than just the total revenue.
To improve gross margin, ensure that your sales team understands the gross margins of the products or services, allowing them to present or upsell higher-margin products.
Sales Metric #3: Average Win Rate
The average win rate is the average ratio of business you’ve closed. For each proposal written and submitted, the win rate would be the number of proposals that you’ve closed or won.
To improve this metric, submit proposals only to ideal buyers once you have agreed on terms and satisfied their questions and objections.
Sales Metric #4: Number of New Contracts Signed
Similar to the win rate, the number of new contracts signed is a lagging indicator of the success of your sales team in closing new deals.
To improve the number of new contracts signed, focus on conversion and closing strategies such as dealing with objections and language to close the sale.
Sales Metric #5: Number of New Qualified Leads
The greater your number of qualified leads, the more likely you will close the sale. For this reason, the number of qualified leads is an essential sales metric.
Improve this metric by ensuring that leads captured or engaged meet the essential qualification criteria such as the company’s size, need for your product or service, P&L responsibility, etc.
Sales Metric #6: Number of Presentations Given
This metric ensures your sales team is getting in front of and meeting with ideal buyers. In addition, strength in this KPI confirms they have insightful discovery sessions that lead to conversion.
Define what a presentation represents for your product or service.
Improving this metric requires that sales professionals have in-depth discovery sessions with their buyers, complemented by solid presentation skills. The best sales presentations align the value of the product or service with what your buyer needs, making both logical and emotional connections.
Sales Metric #7: Average Time to Close
Next to generating sales revenue, understanding the average time to close or speed to close is essential. The faster the sale is completed, the faster you can collect payment.
Improving this metric involves selecting those steps in the sales process that take the most time, then identifying strategies to speed them up. Examples include improving sales skills or introducing new software to speed up communications and document handling.
Sales Metric #8: Average Contract Value (ACV)
Average contract value (or ACV) is a leading indicator of your sales revenue. ACV can also provide insights into upselling and cross-selling performance, both individual and team levels.
Improving the ACV often requires a deep dive into the discovery phase, ensuring that needs are fully understood and options, including upsells and cross-sells, are regular.
Sales Metric #9: Number of Deals Lost
The number of deals lost tracks the number of proposals or quotes issued against those closed during a set period. Typically this time is monthly but can also be adjusted to reflect the average time to close (ATC).
To improve this metric, focus on enhancing objection handling and the language necessary to close the sale. Examples include soft closes, assumptive closes, and direct close strategies.
Sales Metric #10: Customer Retention
Next to acquiring a new customer, customer retention is the most critical KPI for an organization. Customer retention provides opportunities for repeat sales, upsells, cross-sells, and more referrals and recommendations.
To improve customer retention, focus on strategies such as customer onboarding, customer experience, customer value, and customer rewards. To capitalize on customer retention, ensure sales professionals have targets for testimonials captured and referrals requested monthly or quarterly.
Sales KPI Dashboard: Sales’ Reliable Crystal Ball
With the right sales metrics in place, developing a cadence for analysis is vital to ensure you are aware of and can take timely action on any metrics that don’t meet targets.
Additionally, maintain an open and ongoing dialogue with your sales team to understand what is behind the metrics, providing you with insights into sudden changes, either positive or negative.
The right KPIs can also allow you to recognize trends in your sales team’s performance that may require addressing, such as prospecting skills, closing skills, or dealing with objections.
Which of these metrics make the most sense for your organization? Select from the list above, choose your cadence for analysis, and watch your sales results accelerate!
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