Do you really know how well your sales team is doing?
Things can seem as if they’re running smoothly, but you’ll never really know until you start actively measuring success with sales metrics and key performance indicators (KPIs).
Sales metrics and KPIs are meant to help a sales team understand which activities to prioritize so their sales process can be as effective as possible.
Sales metrics are data points used to evaluate the performance of a business, team, or individual. These data points are then compared against goals to check progress and find areas where a business' selling strategy can be improved.
Regularly tracking sales metrics is a necessary step in creating a strategy, making business decisions, and projecting goals for the future. We’ve put together some of the most important sales metrics that any business needs to track.
It’s important to note that sales metrics will not be the same across the board. Depending on size, industry, and history of the business, metrics can look completely different. For example, it wouldn’t be realistic to compare the sales metrics for a fast food chain against those of an independent family-owned restaurant.
Sales metrics are relative to the size of the business. As long as your metrics are indicating more success from the previous year, that’s considered a success.
The examples listed below are simply meant to give an idea of what the value behind the sales metric would look like in real life (dollars, percentages, etc.).
Sales KPIs are metrics that show progress towards goals and the overall success of a company. Because they show the big picture, KPIs are often analyzed before other sales metrics.
The income that a company brings in from normal business activities. Revenue is an indicator of the profitability of the business.
$1,000,000
The revenue each product brings in. Measuring revenue per every solution your business offers reveals which ones are most profitable, and which aren’t pulling their own weight.
$80,000 in Q1
Revenue from first time buyers.
$30,000 in Q1
Revenue from existing customers, perhaps ones that a sales rep has created a relationship with. Comparing revenue from new and existing customers helps sales reps prioritize their time when dealing with multiple buyers at once. More often than not, it is more expensive to gain a new customer than retain an existing one.
$50,000 in Q1
The revenue from a specific sales territory, which can be created based on geographic location or value of the account.
$60,000 in Territory A in Q1
Revenue from a certain demographic or target audience. Looking at revenue by territory and market helps businesses prioritize certain groups and areas that are more likely to buy.
$75,000 from Persona B in Q1
Comparing the revenue of a business and the cost of selling is the true indicator of a business’ success and profitability. A company can be bringing in a lot of revenue, but if it doesn’t exceed cost, the business will fail. The key metric for comparing cost and revenue is called the gross margin.
To calculate your gross margin, subtract the cost of goods sold (COGS) from revenue. Then, divide that value by your revenue.
Revenue in Q1 ($1,000,000) - COGS in Q1 ($500,000)
= $500,000 in Q1 / $1,000,000
= 50% gross margin
The comparison of performance from one period to the same period of the previous year. Businesses will typically compare months or quarters. Year over year growth is an indicator of how well the business is improving in terms of revenue and consistency in the customer base.
To calculate growth, subtract the present value from the past value, and divide that number by the past value.
Q2 Revenue ($500,000) – Q1 Revenue ($350,000) = 43% growth
An analysis of how quickly prospects are moving through your pipeline and converting into closed won deals. The end result of this calculation reflects the amount of money your business makes in a single day.
To calculate sales velocity, multiply the number of opportunities in the pipeline, your average deal value, and your win rate all together. Then, divide that result by the average length of your sales cycle.
(50 opportunities x $5,000 average deal value x 8% conversion rate) / 45 day average sales cycle length
= $444
A prediction of the profit attributed to the future relationship with a customer. The purpose of measuring the customer lifetime value is to shift the thinking of a sales team from meeting quarterly revenue goals to caring about the value that a positive customer relationship can bring. This metric also proposes a possible limit of spending when attempting to acquire a new customer.
To calculate CLV, multiply the annual profit contributed by a customer by the number of years they’ve been a customer.
Customer A contributes $100,000 of profit a year and has been a customer for 5 years.
$100,000 x 5 years = $500,000
Using CRM software to develop, manage, and nurture your relationship with customers will help increase your CLV, resulting in more profits and solutions for the customer- it’s a win-win.
The rate at which you are losing customers. Churn rate is a good indicator of customer satisfaction rates. If your current customers aren't happy with your solution, customer service, or pricing, they will churn.
To calculate churn rate, subtract the number of users at the end of a period from the users at the beginning of the period. Then, divide that result by the number of users at the beginning.
500 customers at the beginning of Q1, 400 customers at the end of Q1.
(500-400) / 500
= 20% churn rate
The willingness of customers to recommend a company’s solution to others on a scale of 1-10. The NPS is used to gauge a customer’s satisfaction with a solution and loyalty to a business.
Scores 0-6 are not likely to recommend it, 7-8 are passive about the product, and 9-10 are promoters.
5/10
The number of sales reps attaining 100% quota. Compare those that are against those that aren’t. The success of sales reps needs to be compared against their activities, which will be discussed next.
60% of sales reps met quota in Q2
KEY TAKEAWAY: Sales KPIs provide a good idea of how well a sales team is performing overall. They are crucial to measuring the success of a business, making decisions, and refining processes.
Sales activity metrics reveal the daily activities of a salesperson. These are smaller scale, more day-to-day activities that are faster to evaluate and easier to adjust.
The number of calls a sales rep made to a lead, prospect, or customer.
15 calls/day
The number of people that answer the phone and are willing to have a conversation.
10 conversation/10 calls made = 67%
The number of phone calls made that resulted in a sale.
1 sale/15 calls made = 6% conversion
The number of emails sent to lead lists, prospects, and customers.
30 emails/day
The number of recipients that opened the email. Open rate is an indicator of whether or not you were able to catch the recipient’s attention, usually with a catchy subject line.
20 opens/30 emails = 67%
The number of recipients that responded to your email. Response rate is a good indicator of audience engagement.
10 responses/30 emails = 33%
The number of people who received emails and ended up buying your company’s solution. If your business has a good conversion rate for email, that is due in part to your open and response rates.
1 sale/30 emails = 3% conversion
The number of people interacting with your social media accounts. This can include page likes, shares, comments, and mentions.
The number of outreach efforts that result in meetings and value demonstrations being scheduled. This metric is a good indicator of the effectiveness of your messaging to consumers.
15 meetings/month
The number of meetings and value demonstrations that result in the customer requesting a proposal.
5 proposals/month
KEY TAKEAWAY: When a team is falling behind on sales KPIs, taking a look at activity metrics is a good place to start trying to identify the problem. These numbers will reveal how salespeople are spending their time and help them prioritize better. It’s pointless to tell someone to “sell more.” However, you can tell a sales rep to send more emails and make less calls.
Even after a prospect enters the pipeline, a lot can change their decision to move forward with your business. Pipeline metrics reveal the effectiveness of your current sales process, and where customers might lose interest.
The amount of time it takes for a customer to go from being a prospect to a buying customer. Due to the commitment and price of buying a solution for an entire business, B2B sales can take a long time. It is important to move a customer through the sales pipeline as smoothly and quickly as possible, without rushing them to make a decision they aren’t ready for.
90 days
The number of qualified leads that are in the sales pipeline. A qualified lead is considered a prospect that has a need for the solution and has expressed an interest in the business. Open opportunities are usually measured by month or quarter.
50 opportunities/month
The number of opportunities that resulted in a sale.
10 closed won opportunities/quarter
The number of opportunities that didn’t result in a sale. Factors that affect whether or not a closing resulted in a win or loss can include communication, the relationship with the customer, and efficiency of the sales process.
10 closed lost opportunities/quarter
The total value of every opportunity currently in your pipeline. It’s important to only include the opportunities that are predicted to close in the time frame you are measuring the value against.
$1,000,000 in the pipeline
A ratio that compares how much pipeline a sales team has against how much quota they need to close. To calculate it, divide your open pipeline by how much quota you need to close. In this case, open pipeline refers to the sum of the value of all opportunities a sales rep has for that time period.
$1,500,000 open pipeline/$3,000,000 quota = 50% coverage
The total value of the sales made during a certain time period. Because B2B companies have a longer sales process, looking at the value of the sales for a certain month, week, or even a day can be rewarding.
$750,000 value in January
The conversions between each stage of your sales cycle. Essentially, it’s the amount of leads that move forward through each stage of your sales process. Measuring conversion rate is key when evaluating your sales process and picking out stages that aren’t giving the desired result.
5% conversion
KEY TAKEAWAY: When measuring sales pipeline metrics, it’s important to remember that a customer can decide not to buy your solution for any number of reasons, some of which are completely out of the sales reps control — some are luckier than others. If a particular sales rep isn’t performing well in terms of pipeline metrics, take a look at their activity metrics and make sure they’re meeting those goals.
You can’t move customers down the sales pipeline without successfully generating leads. The success of your lead generation strategy will affect the rest of your sales process. Lead generation metrics include both sales and marketing efforts.
The performance of a call-to-action (CTA) button on a business’ website or other piece of marketing. To calculate CTR, take the number of clicks a piece of marketing got and divide it by impressions, or the number of times the ad was shown.
5 clicks / 100 impressions = 5% CTR
The rate at which users perform a certain action that could lead to them becoming a customer, such as subscribing to an email newsletter or making a purchase.
The conversion rate is calculated by taking your number of conversions and dividing it by the number of ad interactions.
8 conversions / 100 interactions = 8% conversion
The return on the amount invested in marketing campaigns. ROI (specific to lead generation) reveals whether or not the money being spent on marketing is providing the desired results. It’s calculated as the amount of revenue generated by the total cost of the campaign.
10% return
The number of leads generated through marketing activities. A person becomes a marketing qualified lead by engaging with marketing material to learn more about a company or its offerings.
100 MQLs/week
The number of leads that have been generated through sales activities.
100 SQLs/week
The cost of converting a website visitor into a lead. CPL shows how cost effective your marketing campaigns are in terms of generating new leads.
$60/lead
The cost of gaining a new customer and getting them to make a purchase. CAC is often compared against metrics that measure the value a customer provides in hopes that those values will outweigh the costs.
$400/customer
The number of brand new leads generated in a certain time frame.
10 leads/day
The average time it takes for a sales rep to reach out to a lead after they’ve expressed their need for a solution, which includes signing up for a newsletter or downloading something from the company’s website.
48 hours
KEY TAKEAWAY: Lead generation is a marketing function that sales cannot live without. If your lead generation numbers are down, then the rest of your sales metrics will be as well.
Sales productivity metrics focus on the rate at which your sales reps close deals and whether or not they are using the resources provided to them. It’s not always smooth sailing, but the faster reps close deals, the better their productivity metrics are.
The amount of time spent on strictly selling activities (cold calling, emails, value demonstration, etc.)
6 hours/day
The amount of time spent on entering data after a customer interaction. Keeping track of customer data with a CRM tool is crucial, as it allows all team members to access the right information and pick up with a customer right where they, or someone else, left off.
1 hour/day
The amount of time spent creating content that’ll result in people moving through the sales pipeline and becoming a loyal customer.
1 hour/day
The amount of sales reps that are following your team's established sales process, including sales scripts. If a sales rep is struggling, they might not be following the steps in the sales process as intended.
85% of reps use the sales process
The amount of sales reps that are using your CRM tool, where they can easily store customer data, keeping any customer facing department up to speed on their current place in the buyer journey.
75% of reps use your CRM tool
Measuring how many people are using your CRM is tricky - people fib, and surveys might not cut it. G2 Track can easily tell you which reps are using your CRM and how often. Sign up for a free forever plan and automate software discovery in your organization.
KEY TAKEAWAY: Similar to sales activity metrics, your team's sales productivity metrics are a good place to look if KPIs are struggling. It’s possible that sales reps are spending too much time in one area and not focusing enough on another.
Sales hiring and training metrics analyze the processes included when growing the sales team. These metrics include other departments besides sales, such as human resources and recruiting, but they have a direct impact on the sales team.
The amount of time spent on the recruiting process.
25 hours per candidate
The average amount of time it takes to move someone from being an applicant to an employee.
14 days
The average amount of money it costs to train a new sales rep.
$1,252 per employee (according to the Association for Talent Development)
The average amount of time it takes to train a new employee.
33.5 hours (according to the Association for Talent Development)
The average amount of time each employee has been employed with a particular company. This is a good indicator of employee engagement, retention, and satisfaction.
3 years
The average amount of employees who leave an organization and are later replaced. Similar to tenure, average turnover is a good indicator of employee engagement, retention, and satisfaction.
40% turnover
The amount of time it takes for a new employee to become productive after being hired. Every part of the sales rep new hire process is included in the sales ramp.
90 days
KEY TAKEAWAY: Simply enough, sales onboarding metrics reveal the effectiveness of your current hiring and training processes. Low numbers might seem like a problem for HR, but whether or not your sales reps are being properly onboarded will affect the team’s productivity as well.
The entire purpose of metrics is to measure team performance, apply information to your strategy, make better business decisions, and gain insight into the future. As you measure your key performance indicators, the measurements can be divided into two categories: leading and lagging indicators.
Leading indicators help businesses predict results. These metrics show trends with enough time to change the outcome. They are difficult to measure, but a lot easier to change if the results aren’t looking good.
Some examples of leading indicators include being behind on hiring- it's hard to determine whether or not you are behind on hiring, but if you come to that realization, you can reevaluate your hiring efforts.
A lagging indicator shows the ultimate result of another action. They often change direction after something else happens in the business. Because of this, they are often used to confirm trends that are occurring within a particular business or industry. However, since they need an event to occur to change, they cannot predict future trends. Lagging indicators are easy to measure, but a lot harder to change, since the result is final.
Some examples of lagging indicators include quota at the end of the month, length of sales cycle, and the point in the sales process where you lose the most customers. Learning about those indicators is valuable, but past events can't be changed.
Seeing all of those metrics and value examples listed above can be intimidating. Right now, you might be thinking, “My business is doing just fine. Why should I start using these sales metrics?”
Well, you, your business, and your sales team can reap the following benefits if you start measuring the metrics listed above.
Sure, it might seem as if your business is doing fine overall in the sales department- the money is coming in and you’ve managed to stay cash flow positive. But what about specific sales reps?
Taking a look at their metrics can show sales managers where each individual team member is struggling and where they’re thriving. This way, efforts can be made to help sales reps overcome these struggles and build a more successful department overall.
If your sales process and strategy constantly remain the same, you’ve got a problem. One, however, that can be solved once you implement sales metrics. Measuring the results of your current strategy will reveal where things are going well and where improvements need to be made. With these in mind, you can create a well informed strategy that prioritizes certain techniques that will pick up the slack where needed.
In a field as high intensity as sales, you are going to get some competitive and number-motivated personalities. Sales reps seeing their numbers for the month or quarter, whether they be good or bad, can motivate them to either keep the momentum going or pick up the pace.
It’s best you answer that. Sales metrics provide a look at the success of your sales team. What’s working? Where do problems arise? Is your sales team actually performing well, or does it just seem that way on the surface?
While sales metrics like quota and revenue are important, sales managers need to look past those overarching measurements to identify which factors are helping or hindering their team’s ability to succeed. Tracking the 52 metrics above will give you a clear picture of your sales team’s real success.
Sales managers, are you looking for some other resources to ensure success on your team? Check out our resource that has 40 sales tools for managers!
A lot happens behind the scenes of a sales department.
by Mary Clare Novak
When it comes to training your employees, your efforts need to much beyond that "tell me how...
by Tricia Dempsey
One of the most common mistakes made by salespeople is chasing a bad lead.
by Izabelle Hundrev