Data can be a conundrum. Too much data is overwhelming, like too much noise in a crowded room. Just enough data is like runway lights signaling when you’re on track or when you need to adjust course.
Sales metrics are no different. These metrics measure sales performance across the entire pipeline, but without context or perspective, they could lead you astray.
Here’s what to know about sales metrics, including how they can improve performance, which sales metrics to track, and how to track them.
Motivate with metrics
Find out how sales metrics can incentivize your team to achieve — and surpass — their goals. Book a demo with Arcade today.
Sales performance metrics are data points that measure an individual sales rep’s, sales team’s, or company’s performance in relation to its sales goals.
Sales metrics can be used to adapt your sales strategy and determine whether adjustments to compensation or the sales process are needed.
You may see sales metrics and sales KPIs used interchangeably, but they’re not exactly the same.
Sales metrics are a great way to monitor sales performance. They can give you a heads up when your sales strategy isn’t working or tell you when it’s working extremely well. These metrics can also add historical context, or benchmarks, which help you understand the bigger picture and spot patterns in your sales performance.
Let’s say your sales metrics show the sales team’s current conversion rate is lower than last month’s. The sales leader can optimize the tactics and channels the team uses to approach and convert leads. They could also use the data to tailor coaching and feedback for each individual.
Data-based coaching allows leaders to remain objective while pointing out negative actions and correcting them. In fact, sales metrics are an integral part of sales enablement initiatives. And when sales enablement is included in a company’s sales strategy, SaaSworthy noted a 49% boost in closing forecasted deals, up from 42.5% without sales enablement.
Your real-time sales metrics can also become a team-wide leaderboard, allowing for friendly competition. This, in turn, improves motivation and team engagement, and the gamification of your sales metrics could also lead to new forms of incentivization.
Sales performance metrics come in all flavors. That’s part of what makes them so compelling: If you’ve got a sales-related question, there’s likely a metric that can calculate the answer.
Here are 20 of the most important sales metrics you should consider tracking.
Total contract value / contract length in years
Your annual contract value metric (ACV) tells you how much money a particular contract makes in a year. Usually, ACV is used by businesses with multi-year contracts, such as SaaS companies. This sales metric can be compared to annual recurring revenue or customer acquisition cost.
Total contract value / contract duration [years or months]
One of the most common sales metrics to check when determining performance is annual recurring revenue, or ARR. You can also zoom in and analyze monthly recurring revenue (MRR). Either metric is an excellent way to predict revenue across multi-year contracts for a given time.
(Average purchase value x average number of purchases) x average customer lifespan
Another critical metric for analyzing sales performance is the customer lifetime value. It tells you the average amount of revenue you’ve generated for each existing customer for the time they’ve remained a client. While Salesforce reports that fewer than half of marketers track CLV, this metric is an excellent way to determine if you’re spending too much (or too little) on customer acquisition.
Total revenue / number of deals closed [in a month, quarter, or year]
Ready to spell out a sales growth plan for your team? The average deal size metric can help you spot and keep tabs on larger deals, as well as identify any sales reps who might need upsell coaching.
Number of days required to close deals / total number of deals
The average length of sales cycle calculates the average amount of time it takes for a lead to become a closed deal. This metric clues you in on the efficiency of your sales organization and could help you spot roadblocks in your sales pipeline.
Total revenue / number of [users, products, services, or accounts]
The average revenue sales metric can be applied to users, products, services, or accounts. Calculating the average revenue each user brings in can indicate where the sales team should focus their attention.
Number of customers lost [in a month, quarter, or year] / total number of customers at the beginning of the [month, quarter, year]
Any amount of churn is a bad sign since this metric measures revenue or customers lost. Be sure to calculate your churn rate based on the most common length of contract you offer. And if you hit a negative churn rate, congrats. You’re doing great!
Cost of sales and marketing efforts / number of new customers acquired
Customer acquisition cost (CAC) is an excellent way to measure prospecting performance. This stat is likely representative of a combined effort by your sales and marketing teams. If this is true, you’re not alone. Salesforce notes that 63% of marketers report sharing customer acquisition efforts.
(Total number of closed deals / total number of sales leads) x 100
You can use the deal closing rate metric to create sales forecasts and monitor the efficiency of your sales pipeline. Unlike win rate, which focuses only on qualified leads, the close rate looks at every potential deal.
(Number of deals that didn’t close / number of deals expected to close) x 100
Deal slip rate helps your team keep tabs on deals that are expected to close within a forecasted time period but don’t meet the deadline.
This can happen if a current customer commits to re-upping their contract with your business in the next quarter or year but pushes that commitment back or drops it entirely. The deal slip rate metric should be considered when adjusting sales forecasts and could be an indicator of poor customer satisfaction.
Number of leads converted into sales / total number of qualified leads
This metric indicates how successful your sales team is at turning leads into customers. It’s highly recommended that sales teams track lead conversion rates over time. You should also look for trends in what types of leads convert. This type of information can help both your marketing and sales teams tailor their approach.
Total revenue / total addressable market (TAM)
Your market share, or market penetration, is critical when comparing your current market situation with your sales goals. You can calculate your total addressable market, or TAM, with the following bottom-up equation:
Total number of customers x (average sales price x number of current customers)
Keep it simple: Simple sales compensation plans are cheaper, easier to administer, and yield better results than complex plans.
Potential sales in the pipeline, in dollars / sales quota, in dollars
The pipeline coverage metric is a critical statistic for individual sales reps to analyze. It calculates the value of a salesperson’s potential sales opportunities that are currently in the pipeline and compares it to their sales quota.
(Number of actual bookings / quota for the [month, quarter, year]) x 100
You’ve set quotas for your sales reps. Now it’s time to measure how close they are to meeting those quotas. This is a quick way to spot high-performing team members (as well as those who might need more incentives or coaching). Plus, it can signal when the sales leader needs to take a second look at the strategy or forecast.
Total number of days required to close every deal / total number of closed deals
Analyzing how long it takes for a new lead to move down the sales pipeline and become a closed deal can help sales teams forecast new revenue or spot bottlenecks in their current process. This could include pushing at-risk deals forward or clearing them out of the pipeline entirely.
Noting where leads get stuck in your sales pipeline can highlight new coaching opportunities. According to Calldrip, 44% of salespeople give up after one follow-up call, but the majority of sales (80%) require five follow-up calls to close the deal. If your sales team gives up after the first call, it might be time to sit them down and revisit expectations.
Number of sales-qualified leads / number of marketing-qualified leads
Your sales and marketing teams will appreciate knowing how many marketing-qualified leads (MQLs) have entered the sales funnel and turned into sales-qualified leads (SQLs). This can indicate whether their efforts to attract and inform new clients are effective. The higher your sales qualified rate, the better quality your leads are, and the more deals you’re likely to close.
Total contract value / contract duration [years or months]
You can monitor the total revenue metric over a month or a year. Both give you an idea of predicted revenue when setting your forecasting goals.
It’s also beneficial to check your net profit margin with the following calculation:
((Total value of sales - total of all expenses) / revenue) x 100
Analyzing your team’s total sales activity spotlights the number of calls made, emails and proposals sent, product demos held, and more. It’s ideal to have a software service that breaks down your sales activity metrics so you can see how each sales rep is spending their time.
Quick tip: Your team’s sales activity can also spark fun competitions. Leaderboards showing goals for each salesperson’s number of calls made, proposals sent, or demos conducted can help reps stay on track and remain productive.
Probability of closing x deal value
To calculate your weighted value of pipeline, you’ll first need to set the probability of closing for each stage of the pipeline. Then, add up the total value of the deals in that stage and multiply it by the probability of closing to see the weighted value.
Closed deals / total opportunities
Your win rate shows your sales effectiveness by comparing closed, successful deals to the total number of opportunities, including closed, lost, open, slipped, or other deals in various stages of the sales pipeline. No surprise, it’s an essential sales metric to keep tabs on.
Tracking sales metrics can be a challenge since they update frequently. The last thing any sales manager wants to do is continuously add up cells in Google Sheets or Excel.
Thankfully, plenty of data visualization tools are available to do the heavy lifting for you. Some even come packaged with CRM software. But before you sign up, it helps to set some sales metric tracking standards.
With a plan in place, you can get your sales data tracking set up and reports scheduled. Some of the best sales insights and metrics tracking software include:
Arcade takes sales productivity metrics a step further by visualizing them in leaderboards. Team members and leaders can keep tabs on metrics like calls made, leads created, and revenue generated, all in real-time. And Arcade’s gamification features make metrics fun with easy-to-see rankings that spark friendly competition.
Starts at $2,500 annually (forever free plan available)
HubSpot’s sales metrics dashboard allows you to build custom reports that focus on key metrics and team performance. Along with keeping tabs on your sales forecast and funnel, you can analyze multiple other metrics using a variety of visuals, including sales and pipeline activity.
Starts at $45 a month (free plan available)
With Zendesk Sell, you get a deep dive into your sales pipeline with the Pipeline Development report and other pre-built reporting templates. You can also add sales forecasting details to deals, like the probability of closing and estimated close date. Additionally, you get activity reports that allow sales leaders to track where sales reps and teams spend their time. You’ll need the Growth plan or better to get these features.
Starts at $49 a month for the Growth plan (free trial available)
No matter how you track them, sales performance metrics are key to keeping your business on the right path. And sharing them with your team can incentivize employees to become more productive. After all, who doesn’t like to see the numbers go up next to their name on the leaderboards?
Find out how sales metrics can maximize your team’s potential with our free ebook download.