Tracking sales performance is absolutely vital, but what do you need to be tracking? Start with these important sales metrics.
Are you wondering which sales metrics you should be tracking in order to see your sales efficiency and effectiveness? With all the advanced technology that’s available to sales teams today, there is a ton of collectible data you can use to optimize your sales practices.
However, with all of this data, it can be difficult to know which sales performance metrics you should be focusing on. To learn more about the sales productivity metrics you should be analyzing this year, keep reading.
1. Track Your Quotas
One of the key areas you will want to focus your attention on, when it comes to your sales metrics, is the percentage of quotas that are being met. You should look at the percentage of sales team members that are either meeting or exceeding your quota to get an understanding of whether your quotas are too high or too low. If less than 60% of your team members are able to meet your quota, it may mean that your quota is unrealistically high.
On the other hand, this data could also reflect that you need to hire stronger salespeople and let go of those that are under-performing. You may also want to consider your pay structure to make sure it’s one that encourages your sales team to make sales. However, if nearly all of your sales team members are meeting or exceeding quota, it could mean that you should increase your targets.
2. Track the Average Sale Size
You should figure out what the average deal size is by comparing the total number of deals closed by your team with the total dollar amount of those sales. You can look at this metric on a monthly or quarterly basis to figure out if your sales are lower, higher or are staying the same. If you’re attempting to upmarket, then you will want this average sale amount to increase.
This can also help you spot deals that may be especially risky. For example, if one of your salespeople adds an opportunity that is much larger than your average one, the possibility of closing on it is lower but it will require a longer sales process. For this reason, you should make sure the employee’s other deals are surer bets.
This allows you to make sure the members of your sales team are not putting all of their eggs in one basket. Additionally, you should look out for sales employees that have significantly lower average sales numbers to find those that are focusing on unchallenging sales. These salespeople will need to be motivated by leadership to start pushing themselves by going after more competitive deals.
3. Track Conversion Rates
Your sales conversion rate refers to the number of leads that become customers, which is also referred to as a win rate. You should figure out how many leads are needed to hit your revenue goals. This will reflect the effectiveness of your sales reps.
If your average win rate is increasing, it means that your sales team performance is improving. However, if this rate is dropping, and your sales quantity is decreasing, then there is likely something wrong with your sales process, your sales team, or your lead generation strategy. It’s important to keep in mind that as you upmarket, your win rate will likely go down but if successful, it will only be temporary.
4. Track Revenue
Your revenue is one of the most important sales metrics to watch. You should analyze how much gross income you’ve had over a given period of time, including things like returned products or discounts offered during that period. When you choose to analyze this data will depend on your business model.
Looking at your revenue periodically will help you track percentage of first-time customers . You should also track your percentage of existing customers who are upgrading their purchases with you or making more of them.
Renewal percentages should also be observed, as this tell you the number of customers who are spending money with you on a consistent basis. Growing one or multiple of these percentage types is important to ensure you reach your business goals. For example, if your goal is to increase your customer retention rates, then you will want to work on growing your renewal rates.
5. Track the Effectiveness of Your Sales Funnel
Tracking the effectiveness of your sales funnel can help you optimize sales. This can help you identify areas where you are losing customers. You can track conversion rates by identifying each step your customer takes in their journey with your company.
Identifying potential problem areas can help you improve your sales process to ensure you’re sealing more deals.
Important Sales Metrics to Track Regularly
If you’re trying to find sales metrics and data that you should be prioritizing to improve your sales efforts, keep the tips in this guide in mind. By paying attention to these key areas, you can make sure your sales process, your team, and your lead generation strategies are optimized to produce higher profits.
Are you looking for help improving the effectiveness of your sales team? If so, contact me today at (404) 245-3775 for outsourced sales management.