They say what gets measured gets improved. If you want to increase your sales revenue, it’s a good idea to track sales performance.
Want to learn how to track your sales performance? This blog post is for you. It discusses why businesses should track sales performance and how to evaluate sales performance.
Why your business needs sales tracking
Monitoring your sales performance is much like tracking how fast you run a mile. You keep a record of your speed to have a benchmark you can beat. Tracking your sales performance allows you to look at the revenue you’ve generated in the past, the efforts that led to the generated revenue, and how you can improve your strategies and increase sales. Similar to running the mile, you keep track of your hydration, your stretching and your dietary and sleep habits. Find the right combination of activity/training and you’ll beat your personal best.
Here are some reasons why your business needs sales tracking:
It provides information that enables you to forecast your revenue
It helps you evaluate your sales strategy’s implementation
It looks at how your sales workflows and operations are doing
It helps businesses make informed decisions on allocating resources or changing priorities so that they can meet their targets
Evaluating every key sales performance metric and tracking your sales team’s performance seems like additional tedious work, but some tools automate tracking and report generation. Customer relationship management software (CRM) like Nutshell has sales tracking and automation features. These tools take the burden from your team, so you can focus on improving your process and selling.
How to evaluate sales performance in 4 steps
Now that you understand why your business needs sales tracking, let’s let look at how you monitor and assess your sales performance:
1. Identify your goals and key performance indicators (KPIs)
The first step is to identify your goals and your KPIs. When setting your goals and KPIs, it is important to involve your sales team, so you can:
Determine obstacles that may come up
Set realistic goals
Make your team feel motivated and empowered
Your business goals are the outcomes you want to achieve. Think of it as your desired destination. For example, your goal can be to close twice as many deals as last year.
Meanwhile, KPIs inform you about how well you’re progressing toward reaching your goals. Here are 11 key sales performance metrics you must monitor:
Length of the sales cycle: This metric helps you make accurate revenue forecasts. Typically, the higher the price of the product or service, the longer the sales cycle length.
Number of deals in the pipeline: Tracking this metric is important because you need to know how well your sales pipeline is performing. It can help you identify at which stage of the pipeline your team struggles.
Customer retention rate: This metric is the percentage of customers who stay with your business.
Churn rate: Also known as attrition rate, it refers to the percentage of customers who stopped purchasing or subscribing to your products or services.
Customer lifetime value (CLV): CLV is the revenue your business can expect from one customer throughout the duration of your relationship. This is a good metric to compare with the customer acquisition cost.
Percentage of revenue from new business: This metric shows how much of your income is generated from new customers. If new customers account for the majority of your income, examine your churn rate and CLV.
Percentage of revenue from existing customers: This metric tells you the income you generated from upselling and cross-selling your current customers.
Total revenue: This key sales performance metric refers to the income your business has generated from all your sales and operational activities.
Year-over-year (YoY) growth: This metric compares the revenue you generated from year to year.
Cost of selling: This metric tells you the amount you spent to sell the product. This is best compared with your average CLV.
Net promoter score: This performance metric shows whether your customers will likely recommend your business to someone else.
Set up your team for success by monitoring short- and long-term goals. Think of short-term goals as pitstops along your journey toward your destination.
Daily and weekly goals help keep your team stay on track. Long-term goals, on the other hand, give your team a realistic benchmark of success.
3. Create a visual dashboard that shows your pipeline and its stages
A dashboard can help you visualize your pipeline and the ongoing sales activities of your team. Using Nutshell’s lead management tools, you get help with lead scoring, and qualifying and nurturing leads.
Nutshell’s pipeline management features also help you customize your view of your pipeline. Do you want to monitor the health of your pipeline and immediately see the next steps? Use the board view.
If you want your leads presented in a table so you can sort and filter them according to attributes, use the list view. A map view provides you with a geographical view of where your leads and customers are.
4. Catch up with your team regularly
Schedule regular catch-ups with your sales team. During these meetings, let your team members share insights they’ve gained and issues they’ve encountered.
Are more leads receptive to your new product or service? How did your existing customers respond to your price change or your upsell? Make these meetings productive by collectively troubleshooting and sharing helpful tactics that have worked.
Track sales performance with Nutshell
Every business benefits from tracking its sales performance. If you wish to evaluate yours with the help of a CRM, consider Nutshell.An affordable and flexible growth platform, Nutshell has lead management, pipeline management, and sales automation features that can help you track sales performance. Try Nutshell for free for 14 days!