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Wednesday 3 February 2021

5 Important Sales Metrics You Should Track

In today's age, there's an abundance of data. And even with today's latest tools helping us to measure everything there's a lot to digest. Just which metrics should you be focusing on when there is an endless list of metrics, reports and data points collected.

This can be overwhelming, and when you're overwhelmed, it can be difficult to analyze the data, interpret it and make the right decision. So here's where things take an interesting turn. Is there a solution to the overwhelming data. Rather than tracking everything it would make the most sense to track only the important things.

Performance metrics are a measure of a business or employees' tasks and activities. They are often quantified and measured over time. These metrics are tracked and ranges are selected to identify what is an ideal performance.

Businesses use performance metrics to determine if their outcomes align with the goals that were set. Usually if a performance metric falls below the range that was set, this may indicate underperformance, whereas, if the outcome falls on the range or above it the business is deemed to be meeting its goals or exceeding them.

Metrics are important because they help you to evaluate your performance and inform your decision making.

Choosing the "right" metrics depend on various factors such as your sales organization, industry or company. We've found these 5 metrics to have the tendency of holding impotance to sales leaders across the board.

Here are the 5 most important sales metrics you should definitely be tracking to skyrocket your sales.

1. Percentage of sales teams hitting their quota

Attainment of quota means that the percentage of salespeople meeting or exceeding their targets tell you whether your quotas are set too high or low. As a general rule of thumb, your quotas may be unrealistic if less < 60% of your salespeople are hitting their allocated quotas. On the flipside it could also mean that you need to hire better salespeople. One other area that is often underlooked isn't the target or the team, but it could be the compensation plan. 

2. Average deal size

Average deal size is calculated by dividing total number of deals by the total dollar amount of those deals.

When measuring this metric on a monthly or quarterly basis tells you whether your contracts are getting larger, smaller, or staying the same. If you're trying to move upmarket, you want the average deal size to increase. If you're trying to land more small businesses you want this number to go down (however your number of customers to go up)

Average deal size can also help you to spot potentially risky deals. Let's say one of your salespeople adds an opportunity which is 4x larger than the normal ones you usually track, you should expect the probability of closing to be lower and the sales process will likely take longer.

3. Conversion rate

This measures how many leads that actually convert and ultimately become customers. For example if you have 500 leads per month and on average 50 buy your product your conversion rate is 10%.

This metric will help you to calculate how many leads you need to make to reach your revenue targets. Historical conversion rates also show whetther your reps are becoming more effective. Keep in mind that your win rate will probably reduce as you move upmarket but will increase as you shift to small businesses.

4. Revenue

Revenue is your most important KPI. Although gross income might seem to be a relatively simple metric, it can be often be overlooked.

On the other hand for subscription businesses you should track revenue based on a recurring basis either monthly or annually. 

Break down in these 3 ways to see more about your revenue metric:

  1. Percentage of new business
  2. Percentage of upsell/cross-sell/expansion
  3. Percentage of renewal

Depending your goals, growing each of these will differ from time to time.

5. Sales funnel leakage

This tells how many prospects have dropped out of your funnel. To determine your leaky points track stage-by-stage conversion rates. At different stages of your sales process you can learn different areas to improve.

For example, if 40% of new prospects agree to a discovery but half of these make it to the demo stage, but just 5% end up buying. This difference between the demo and buying can lead to a few different inferences. 

  1. Your salespeople are not qualified enough
  2. Your salespeople are giving bad demos
  3. Your salespeople are negotiating poorly.
  4. Your product does not meet the demands of the market.


By finding and improving on these weak points you can dramatically improve your sales results by at least 50%.


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