As any sales manager knows, accurately tracking the performance of sales reps can’t be done by looking at a single number, such as a revenue target. Sales performance metrics vary between different companies and products.
At the same time, finding key metrics based on your sales strategy and sales process is essential. Measuring whether you have enough closed opportunities this quarter or the value of your sales pipeline can be a representative reflection of your sales team’s productivity.
Sales managers can also use sales metrics to assess how quickly new team members can get up to speed, and whether the onboarding process needs to be tweaked.
Leveraging effective metrics to understand what works for your sales organization is incredibly valuable. But you can only get those insights after you configure your sales tools to track the right things.
What Are the Most Important Metrics for Every Sales Team?
Sales metrics are key performance indicators (KPIs) that track your sales team’s activity against pre-defined benchmarks.
You can use sales metrics to ensure your team is on track to complete their sales goals, award bonuses for outstanding performance, or identify issues before they become too serious to ignore.
One of the critical tasks that sales leaders have to do is to select the most important sales metrics for their team, as sales reps will adjust their activity accordingly to maximize them.
Here are 10 effective sales performance metrics that would help you track sales activity across the whole company.
1. Total Sales Revenue
The most fundamental sales activity metric is revenue. Knowing how much revenue your sales team helps generate every quarter (or any other average time period) is key to improving performance.
For SaaS tools, it’s more common to calculate monthly recurring revenue (MRR) or annual recurring revenue (ARR), which better reflects the actual cashflow and future expectations.
2. Average Deal Size
Your total sales revenue can be comprised of any number of deals. But since each sale takes time and energy from your team, most sales managers prefer to land a few large deals to lots of small ones.
Tracking the average deal size would refocus your team to prospect for larger clients and, as a result, redefine the industries and even geographies that you might be after.
3. Average Revenue per Customer or Product
Another way to track sales is not in terms of deals but customers or products. This is useful when you have repeat customers with lots of subsequent sales. Focusing on their needs can greatly improve the overall revenue with less effort.
Alternatively, you can identify the best-selling products. Knowing this metric could help you rearrange your product line, create new sales campaign materials, and update your sales training.
Note: Having a sales process dependent on just a few products can be as concerning in the long run as having too many.
4. New vs. Existing Customer Revenue
Even when you concentrate on upselling or cross-selling existing customers, it’s important to keep the sales pipeline full with new prospects. Tracking how new vs. existing customer revenue changes over time can tell you which side of the equation needs some more effort to ensure you keep a balanced sales strategy in the future.
5. Average Conversion Rates by Funnel Stage
In trying to improve your sales process, it’s best to find the smallest moving parts you can work on. Start tracking the opportunity-to-win ratio of each stage in your sales funnel. That would immediately tell you which part of the sales process needs more training or other resources.
6. Year-Over-Year Growth
Tracking your total sales revenue for longer than a year gives you another important metric, which is year-over-year growth (YoY).
Year-over-year growth is mostly expressed in percentage terms and clearly shows whether your overall sales strategy is working as well as the long-term trend.
7. Customer Lifetime Value
Your sales reps should be able to estimate the lifetime value of any particular customer based on your historic markers. Prioritizing accounts with the higher customer lifetime value (LTV) will help focus the sales efforts.
In some cases, LTV might drop below the average deal size, which means customers are cancelling their orders or dropping off in other ways before their contract is done. This would be a clear signal to improve your product and warrant a careful discovery process with your customers.
8. Net Promoter Score
One of the most popular metrics for assessing how fast your product spreads among its target audience is a net promoter score (NPS). When customers are more likely to recommend your product to others, your NPS scores improve.
The NPS metric goes from 1 (not very likely) to 10 (very likely), with excellent scores being considered those between 8 and 10.
9. Quota Attainment
Do you know how many of your sales reps are reaching their sales quote in any given time period? What’s the average percentage of the quota attained by your team?
Low quota attainment can signal the need for more coaching, more sales capacity, or even a low-quality product.
In addition, learning how other sales metrics affect quota attainment can help you select key priorities for improving your sales process in the short term.
10. Sales Expenses
Reaching your sales quota every quarter is great, but how much are you spending to do that?
Sales leaders should keep track of sales expenses, including sales tools, campaigns, staff, operating expenses, and other customer acquisition costs. While being in the red while starting up is normal, you should ensure that your team is on the steady path to profitability.
All the sales productivity metrics listed above are important to track. But where do you start? And what solutions should you implement first?
Improving the conversion rate is one of the most effective ways to increase revenue while simultaneously reducing the amount of time your sales reps spend on opportunities that go nowhere.
Nearly all websites today rely on live chats as a way to connect potential customers directly to BDRs. However, few companies know which website visitors are actually interested in buying their product or service or, in other words, have high purchase intent.
What they need is a tool like Lift AI, which automates the web visitor qualification process and connects BDRs with the ones that have the highest likelihood to buy.
Lift AI is an automated solution that identifies the buyer intent of all visitors on your website (even if they are completely anonymous). To do so, Lift AI leverages a unique machine-learning model that was trained on billions of data points and more than 14 million live sales interactions.
Here’s how Lift AI works. As a visitor with high purchase intent navigates your website, Lift AI gives them a buyer intent score enabling you to create playbooks based on their score in platforms like Drift. A visitor with a high buyer intent score can be connected straight to the next available BDR, using any chat platform you already have. At the same time, visitors with lower purchase intent are greeted by a nurturing bot or a self-help guide.
You can see why this would help you instantly improve your sales metrics, from total sales revenue to average revenue per customer — fewer BDRs will be able to close more deals than ever.
In fact, within 90 days, most Lift AI clients report up to a 10-fold increase in their chat conversions. For example, Formstack increased its funnel by 88%, while PointClickCare improved sales by 400%.