But which sales metrics should you watch, and what should you do with that information? Ultimately, the numbers you focus on will depend upon your product, sales model, and customers’ behaviors. By using a little bit of that “salesperson intuition” (plus some trial and error), you’ll be able to determine which metrics are worth tracking for your team.
To get you started, we’ve compiled a list of six sales metrics that are essential for all sales managers to monitor on a regular basis, and four others that you may want to add to your dashboard depending on the length of your sales cycle and what you prioritize in your sales process. By tracking these particular metrics, you’ll be able to identify the prospects that are most likely to convert, whether you need to improve a leaky pipeline, or if your offer itself needs adjusting.
Sales productivity is the total amount of revenue brought in divided by the number of sales employees. This is a great baseline metric to look at because it gives a concise overview of how well on average each member of the team is performing.
Compare this metric with that of a previous month, quarter, or year to identify any high-level trends. Further investigation into what’s causing these trends can help you capitalize on or get rid of certain sales tactics.
You can also compare your sales productivity against how much you’re investing in your employees. Take the sum cost of compensation, training, and support systems, then compare it to other ROI expectations across the rest of the business. This will help you understand if the investment makes sense compared to the amount of revenue that’s coming in, or if it needs to be adjusted in some way.
Note: If you lead a high-volume sales team that closes multiple sales per day, it definitely makes sense to keep an eye on daily sales numbers. However, for businesses with low volume or long sales cycles, sales efficiency metrics or weekly/monthly revenue will be more relevant than daily sales numbers.
2. Lead Response Time
Reaching out to a lead immediately after they express interest in the brand increases the odds of making contact immensely.
A study by LeadResponseManagement.org found that when a sales rep attempts contact within five minutes of a lead expressing interest, they’re over five times more likely to connect. That likelihood decreases significantly if the rep doesn’t reach out until ten minutes later:
Monitor the lead response time of your reps at every stage of the pipeline. Responding promptly shows potential clients that your team is punctual and attentive, prevents competitors from swooping in first, and shortens your sales cycle by keeping leads moving quickly through your pipeline.
3. Quality of Lead Sources
Cutting down the time it takes to find and close new customers is key to increasing revenue. Not only that, it’s good for team morale and keeps employees from feeling burnt out.
Filling your pipeline with highly qualified leads is the first step to quick sales. First, start by analyzing where your leads come from. With Nutshell’s leads report, a sales manager can clearly see how many leads each source is generating over a specific timeframe:
Compare this data with client wins to determine if there are any strong relationships between certain lead sources and the odds of acquiring a new customer.
For example, you might discover that people who learn about your business via Google ads are more likely to become customers compared to people who discover you through your Facebook posts, in which case you may want to encourage reps to prioritize leads from Google. Plus, you can let your marketing department know which of their strategies are working best so they can focus their efforts accordingly.
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If your team isn’t already upselling or cross-selling to existing customers, then they’re missing out on low hanging fruit. There’s a 60 to 70% likelihood that existing customers will respond to an upsell, while the likelihood of selling to a new prospect is only 5 to 20%. Not only that, but if you’re a B2B company, 90% of customer revenue likely occurs following the initial sale.
Upselling and cross-selling provide a surefire way to increase sales productivity in a fraction of the time. It’s crucial to know how often reps are selling to existing customers and if there’s room for growth in this area.
5. Conversion Rates Through Your Pipeline
This is a big one. One of the most reliable ways to refine your sales process is to look at the conversion rates in every stage of your pipeline. You’ll want to know how many leads advance through each stage and the average time spent in that stage:
(Nutshell’s Funnel report)
After you identify leaky spots in the pipeline, you can work towards making improvements, whether that’s refining initial contact policies, the content of follow-up emails, or how reps make the final pitch.
Scratching your head about what improvement strategies to use? This guide on effective lead management techniques can help optimize your pipeline.
6. Sales Forecast
Focusing too much on the short-term can leave a sales team in a very bad position. Any effective sales manager needs to look beyond the deals that are closing in the near future, and make sure that high quality leads are continuously entering the top of the funnel.
A sales forecast report tells you whether you have enough leads in your pipeline to make your next quota, based on the raw number of incoming new leads plus the following inputs:
Deal size: Either the potential revenue for each lead, or an average deal size based on similar leads.
Likelihood to close: This could be based on your team’s average win rate, or a measure of individual lead scores/lead confidence for each potential deal.
With this information, you can quickly discover how much revenue you’re likely to take in based on the leads you currently have.
Nutshell uses lead confidence scores, which automatically adjust as the prospect advances through each stage of the pipeline. In the example below, you can see the value of a prospect in one column and their lead confidence in another:
While the first prospect in the list is worth $27,600, their lead confidence is only 12%, so they’ll only add a projected $3,312 to your pipeline forecast. The fourth prospect in the list, meanwhile, is worth $34,500 and has a lead confidence of 83%, which adds a projected $28,635.
Keeping an eye on your sales forecast can help you guide your team on which leads they should invest more time into, and whether or not you need to put more focus on lead generation.
Four More Sales Metrics That You Might Want to Keep Your Eye On
1. Frequency of Contact (i.e., Activity Volume)
There’s only a one in fifty chance that a sale will be made during a first meeting. That means reps should be contacting new leads often, then following-up with existing prospects regularly. The right sales CRM software makes checking in with your team easy.
An Activity report quickly compares each team member’s calls and field visits to previously established goals or expectations:
You can adjust the time period displayed, as well as the type of activity.
With this information, you could also analyze if there’s a point at which too many calls or visits lead to a decrease in overall revenue. Finding the ideal number of contacts to make in a set time period can maximize sales productivity while reducing employee burnout.
2. Connect Rates Across Outreach Methods (i.e., Activity Outcomes)
Of course, quantity isn’t the only marker of effective outreach. A sales manager needs to be able to measure the quality of those touches as well, not just connect rates.
Let’s say you have a 40% connect rate with your emails, but only 2% of your email recipients convert into customers. Meanwhile, you connect with just 10% of prospects on the phone, but nearly all of them buy. Clearly, email is a less effective outreach method for you than phone, even if you’re more likely to reach people that way.
The methods your reps use to approach potential clients could have a significant impact on your success. By collecting data on your connection rates from cold calling, cold emailing, and social media messaging, you can discover which methods to put more time and resources behind.
3. Email Open and Click Rates
If your team sends follow-up emails with white papers, resources, or other content that is meant to attract prospects, it’s helpful to keep a close eye on whether or not prospects open those emails and click through to the content.
High engagement with those emails is promising. It shows that prospects are interested in what they’re seeing and that it’s worth following up with them again, even if they’re slow to respond.
Poor engagement, however, is a sign that you need to work with your reps on re-wording follow-up messages and what content to include. Remember: Low open rates means your subject lines need work, and low click-rates mean the assets you’re sharing aren’t relevant enough to your recipients’ needs.
4. Lost Deals
Wondering why your team didn’t win a contract? By keeping track of the reasons for your lost deals, you can identify trends over time and hone in on how to make your offer or sales process better.
In this example from Nutshell’s Losses report, a visual overview of the data shows a big spike in deals lost in August 2016 because prospects went with a competitor:
However, with some adjustments, that number significantly decreased by February 2017, only six months later.
Monitor Your Sales Process, Grow Your Business
A successful sales team doesn’t run on natural talent and intuition alone. Growing a business sustainably takes close monitoring of sales metrics and the ability to address weak spots strategically.
The right data can immediately illuminate which leads are most worth pursuing, if your team’s process needs tweaking, or if your offer needs adjusting in order to become more competitive.
Ready to get your sales data working for you? Nutshell’s powerful reporting tools give you visual and fully customizable overviews of how well your team and pipeline are performing. Start a free 14-day trial today!
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