Sales metrics

When it comes to refining the sales process, it can be difficult for sellers to figure out what, where, and how to focus their efforts. Sales metrics and key performance indicators (KPIs) are effective tools that sellers can use to identify opportunities for improvement in the sales pipeline.

Read more about sales metrics below.

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Sales metrics

When it comes to refining the sales process, it can be difficult for sellers to figure out what, where, and how to focus their efforts. Sales metrics and key performance indicators (KPIs) are effective tools that sellers can use to identify opportunities for improvement in the sales pipeline.

But determining which sales metrics are vital and which are unnecessary can be tricky, and some sellers may even need to ask, What are KPIs and metrics? In this article, we take a look at the differences (and the similarities) between metrics and KPIs and compile examples to help sellers know what to measure and why.

How do you measure sales success?

Sales “success” can be nebulous because it can be defined in different ways. Sales success may mean hitting a specific revenue goal, closing a certain number of deals, or even having satisfied customers who give the selling company rave reviews. So, the first step for any company is to ascertain what success means in its own terms. Then it can move on to measuring sales effectiveness and monitoring performance to see if the selling team has met that definition of success.

How to measure sales performance

The best way to measure sales performance is to determine the metrics that are most applicable to the individual business. Many types of performance metrics can be used to measure sales performance, and some may not be relevant to a company’s own definition of success. Also, performance metrics examples may provide insight into the success of the whole selling team or individual sellers. Performance metrics should not be used as a tool to criticize sellers; rather, they should be used to encourage sellers and nurture their existing talent. Specific sales performance metrics are listed in the “What are examples of sales metrics?” section below.

How to measure sales productivity

Similar to sales performance metrics, sales productivity metrics vary. They range from the number of emails sent in a day to each individual seller’s percentage of closed deals in a specific time period. Sales productivity metrics should be relevant to the business and used to empower sellers. By tracking sales productivity metrics, companies can transform the insights into feedback that supports sellers in achieving their goals.

Technology can help streamline and simplify the collection and analysis of sales performance and productivity metrics, giving sellers the insights and automation that help them thrive. For example, Collective[i] is a digital sales transformation platform enabled by artificial intelligence (AI) that complements sellers’ activities. Collective[i] leverages everything from Robotic Process Automation to advanced deep learning techniques to help sales teams unlock new awareness of their processes, personal connections, and revenue.

What is the difference between sales metrics and KPI?

Sales metrics and KPIs are often used interchangeably, but they are distinct. KPIs equate to business outcomes; they are a quantifiable value. For example: The number of sales leads increased 10% from May to June 2021.

Sales metrics are contextual summarizations or categories of data — e.g., the number of engaged qualified leads in the sales pipeline is 24. Sales metrics are helpful to collect but are only a small part of the larger picture; they need to be tracked over time so companies can compare results and determine KPIs. One way to think about the difference between these two terms is that sales metrics are “business as usual,” while KPIs are the critical metrics that take business to the next level. So, a KPI is a sales metric, but not all metrics are KPIs.

Another example of a sales metric would be measuring inbound website traffic from both organic and paid sources. These are important metrics, but they are not tied to a specific objective or goal. If the goal is to increase inbound website traffic by 20% in the next quarter, for example, then the sales metric has to be tracked so the results can shed light on whether the company is meeting that KPI.

What are sales metrics?

Sales metrics are a quantifiable measure of selling activities. They are used to track progress and performance and to evaluate success or failure. Spending time looking at data point after data point with no intentionality wastes sellers’ time and efforts. Sales metrics provide the context for what sellers should be measuring in order to streamline processes and grow revenue.

What are examples of sales metrics?

Sales metrics can be split into different categories of metrics to help sales leaders determine which are most valuable for their teams. Here are the most common sales metrics examples:

Selling team metrics

These metrics look at the bigger picture; however, they can also be used to examine an individual seller’s performance. These general sales metrics include:

Total revenue - The total revenue over a specific period of time — whether monthly, quarterly, or annually — is a cornerstone KPI. Annual recurring revenue and monthly recurring revenue are the most common measurements.

Year-over-year growth - This metric can shed light on whether sales teams are achieving long-term growth goals and whether revenue strategies are creating transformational results.

Percentage of revenue from new vs. existing customers - Examining this metric can help sales leaders decide whether to prioritize fostering relationships with new or existing customers.

Win rate - The percentage of deals that close compared to total deals

Quota attainment - By comparing the revenue each seller brought in to the expected revenue, sales leadership can identify top sellers, missed opportunities, and coaching opportunities for low-performing sellers, or they may refine the quota-setting procedure.

Average revenue per account - Knowing the types of accounts that bring in higher or lower averages helps leadership know where to focus the time and efforts of sellers.

Lifetime value of a customer - The expected revenue generation through the average customer cycle

Net promoter score - This metric assigns a value to how likely a customer is to recommend the product or service to their network.

Sales expense ratio - Examining the cost of sales, both direct and indirect expenses, compared to revenue helps determine how profitable the business is.

Running a sales team is tricky, especially when the top 20% of sellers generate 80% of the revenue. Ideally, every seller would be contributing at a high level. Tools like C[i] RecommendsTM are invaluable in achieving this goal. C[i] RecommendsTM studies top sellers to surface which activities are most likely to have an outsized impact on outcomes. Users receive a daily list of recommended actions, news, risk alerts, and more to drive the best results throughout the organization.

Individual metrics

These metrics help sales leaders examine the sales activities and determine if salespeople are using their time wisely:

Percentage of time selling - How long each seller spends actively selling to customers

Percentage of time on data entry - A low percentage of time on data entry may be good news, or it could point to sloppy data entries. It is important to pinpoint the reason behind this percentage.

Percentage of time in content creation - Creating content can take a significant amount of time and effort, but it must be balanced with other activities.

Percentage of marketing collateral for use by sales representatives - This metric examines how much marketing collateral sellers have available and how much they are actually using.

Number of sales tools used - Switching back and forth between different tools can lead to wasted time and frustration. Identifying the right mixture of tools and simplifying the sales tech stack will likely improve insights and streamline collaboration between teams.

Percentage of high-quality lead follow-up - Remember: Quality over quantity! Making a point to track the high-quality lead follow-up keeps this practice top of mind for sales leaders and sellers.

Productivity metrics help leadership identify opportunities to improve. For example, if sellers are spending a lot of time on data entry or are rushing through and contaminating data, tools like Intelligent WriteBackTM can help. Intelligent WriteBackTM is a feature of Collective[i] that automates CRM data capture from any tool sellers use, eliminating the need for manual logging and giving sales teams a productivity boost of up to 15% to 20%. It can also capture data from approved non-CRM users, like members of a legal team or a reseller, to keep customer contacts updated.

Lead-generation metrics

Leads are vitally important to sales and revenue generation, so lead-generation metrics should be diligently tracked and analyzed:

Volume of new opportunities - First, identify the definition of a new opportunity — the typical definition is a qualified prospect that is likely to become a customer.

Lead response time - Sellers should respond to leads quickly and efficiently so as to not frustrate or lose potential customers. Percentage of lead follow-up - How many leads sellers follow up with

Dropped leads - Pinpointing the number of dropped leads and identifying the reason they were dropped helps leadership to recognize expert or amateur sellers. For example, a dropped lead by a top seller may be an excellent move — the seller might have recognized behavior that indicated the lead would not convert to a customer and would only waste time. Sales leadership can use this metric as a way to convey to the selling team when and why leads should (or shouldn’t) be dropped.

Qualified leads - There are many metrics to be collected around qualified leads, such as the number of leads over a specific time period or how many come through which lead-generation channels.

Customer acquisition cost - An approximate number for how much a new customer costs to acquire. Companies can assess whether their attempts to shorten the sales cycle and decrease customer acquisition cost is working.

No matter what metrics and KPIs are selected, the foundation of them all is data. Technology can help sales teams take advantage of data and transform it into actionable information for better business outcomes. For example, Collective[i]’s Intelligent InsightsTM uses AI to replicate the judgment of top performers, providing all sellers with recommended next steps, opportunity odds, recommended buyers, risk alerts, and more.

Sales pipeline metrics

Sales pipeline metrics delineate the customer journey so sellers can brainstorm how to make it smoother for prospects:

Sales cycle length - The total number of days it took to close each sale divided by the number of deals

Open opportunities (by month/quarter and team/individual) - The current open opportunities in the pipeline, which helps to predict future revenue

Closed opportunities (by month/quarter and team/individual) - Pinpointing when deals tend to close is valuable for analyzing seasonal fluctuations.

Value of the pipeline (by month/quarter and team/individual) - The expected value of all the deals in the pipeline. Even if all of these deals don’t close, it is still worthwhile to have an estimate of how much revenue potential is in the pipeline at any given moment.

Value of sales (by month/quarter and team/individual) - By tracking the value of sales, companies can experiment with solutions to further grow revenue.

Average contract value - Helps determine how much an ongoing customer contract is worth by averaging and normalizing the value over the period of a year

Win rate - The ratio of deals won to the number of total closed opportunities

Conversion rate - Tracking how many opportunities convert to closed deals helps sellers realize when there are obstacles preventing prospects from completing the buyer journey.

When calculating and analyzing pipeline metrics, sellers don’t have to do all the hard work themselves. Tools like Predictive PipelinesTM help sellers understand pipeline metrics and come away with actionable insights. Predictive PipelinesTM gives sales professionals on-demand inspection capabilities and pipeline health assessments, so they can review pipelines and provide critical information to agile sales teams without diminishing selling time. The transparency it gives teams promotes better collaboration among sales, marketing, and customer success.

What are the main sales metrics?

When choosing metrics to track, keep in mind the difference between leading and lagging indicators. Leading indicators predict results, revealing potential outcomes. For example, tracing revenue growth year over year can give insight into the probable outcome of next year’s revenue. A lagging indicator reflects the results, giving sellers the opportunity to reflect on the outcome and adjust moving forward. No matter the metrics selected, it is important to have a mixture of leading and lagging indicators.

A business must also determine which KPIs it wants to uncover in order to pinpoint which metrics it wants to track. Note that B2B sales metrics should be heavily focused on the quality of leads, since B2B sales tend to have longer deal cycles.

How do you calculate sales metrics?

Sales metrics are often calculated and displayed on a sales metrics dashboard. AI-enabled technology makes sales metrics easier than ever to access and visualize.

With platforms like Collective[i], sellers and revenue operations teams have 24/7 access to clean CRM data, instantly updated contacts, daily adaptive sales forecasts, opportunity odds, sales pipeline visibility, predictive leaderboards, risk alerts, and more, all of which simplifies the tracking and calculation of sales metrics.

What are KPIs in sales?

Key performance indicators are quantifiable measures, similar to sales metrics, that are used to evaluate progress towards specific goals and objectives. They must be well defined, measurable, and relevant to the business and its goals.

What are the 7 key performance indicators?

An online search for “seven key performance indicators” will result in lists all touting a different set of the most important KPIs. The truth is that only a business itself can pick the KPIs and metrics that are most relevant to its sellers. Choosing five to seven KPIs is a good place to start — keep in mind that too many KPIs makes the “key” designation meaningless.

There are four important steps to select KPIs:

  1. Define the KPI - A vague KPI is not helpful. The best KPIs have clear, descriptive definitions that explain what is being measured and when.

  2. Set the target - An essential part of a KPI is having a specific goal. The target should match the KPI’s measurement type. For example, if the KPI involves percentages, the target should be a percentage as well.

  3. Determine the data source - Decide where the data will be sourced from and how the calculation will be performed. Clean data is the best source for KPIs, and the sales tech stack should handle the data according to best practices.

  4. Assign responsibilities - Every KPI should have a clear owner. Make sure that someone is accountable for the KPI and takes responsibility for it.

Sales KPI examples

Sales KPIs can be any of the sales metrics listed above, as long as they can be viewed as a business outcome. Although they may not be the right KPIs for every organization, the common sales KPIs include:

Total revenue - The total amount of income generated from all sales activities

Revenue by product or service - Look at revenue generated per product or service to see which products or services are the most profitable.

Market penetration - The number of current customers compared to the number of potential customers in the market sector

Percentage of revenue from new customers - This KPI helps measure a company’s efforts to acquire new customers.

Percentage of revenue from existing customers - If sellers are interested in cross-selling and upselling current customers, this KPI can indicate which customers would be open to that.

Year-over-year growth - This metric is helpful for determining if revenue strategies are working.

Revenue by territory - Track this as a KPI for goals in different regions and territories — particularly useful for companies with several locations.

Revenue by market - The revenue generated from a particular vertical

What are the best KPIs for sales?

The best KPIs fit the following criteria:

  • Verifiable and realistic - KPIs that are too high or have vague definitions are confusing and only set up teams for failure. The best KPIs can be verified.
  • Use accurate data - A KPI based on incomplete or inaccurate data is not a meaningful metric.
  • Define what matters most for success - Identifying goals and objectives is a fantastic team exercise, and KPIs help selling teams focus on the right activities to reach those goals.
  • Provide a measurement for success - KPIs should be exact and precise, giving a yardstick for achievement.
  • Unify language and clarify communication about sellers’ performance - KPIs act as a way for sellers to communicate about performance and success in a meaningful, measurable way.
  • Focus on outcomes - Rather than collecting data for the sake of collecting data, KPIs give sellers a way to transform data into objectives and outcomes.

Make the most of sales metrics and KPIs with Collective[i]

Taking advantage of sales metrics and KPIs is about more than just collecting data. To improve processes and increase revenue, companies have to have tools that simplify the transformation of data into valuable insights. Collective[i] adds a critical layer of intelligence to transform the CRM and other everyday tools into a state-of-the-art, agile, buyer-centric sales stack. We pool sales activities from the CRM, traditional work tools, and our vast network to provide teams with the highest-quality metrics and insights to drive sales.

Unlock the power of your sales data with Collective[i]. Explore our full suite of tools and get started with our platform today.

Work together, win together

Request an invitation to join IntelligenceTM, the world’s first global network of sales professionals.

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In the meantime, explore Collective[i] and find answers to frequently asked questions.