Have you ever written an email to someone with the intention of selling them your product or service, only to be met with crickets? If yes, then you know the importance of metrics in sales.
No matter what type of business you run, knowing your numbers is critical. You probably know that there are a lot of metrics out there, but it can be hard to make sense of which ones matter and why they matter. This guide will cover all the key sales metrics, tell you how to track them, and offer up some tips on which metrics to focus on and why.
A metric is simply a standard by which we measure or judge things. The field of statistics has given us many classifications of metrics so we can understand what measures are most relevant in certain situations. Metrics describe important information about the performance of our business so we can understand how our efforts are impacting the growth of the company, and what we need to do to improve.
The purpose of tracking metrics is to show us whether or not we are on track for meeting our goals. The first step in knowing how well you're doing is having a clear understanding of your company's goals so you know which metrics matter. Then it's time to measure the data, see how you're doing, and learn from your results so you can adapt as necessary moving forward. Having an idea of what works (and what doesn't) allows you to focus your efforts better and ultimately achieve maximum success with less wasted effort.
There are many different metrics that can tell you an array of information about your business. Some are more helpful than others depending on the stage of growth your company is in. This guide will focus on 6 key sales metrics to help you know how well you're doing and what changes need to happen moving forward. We'll also include a number of tools that will let you track each metric easily.
1. Number of New Customer Accounts Opened
This metric gives insight into how quickly new customers are being added to the top of the funnel, which lets us know if our efforts are making headway in growing our customer base. There's no need for this number to be exact; it just needs to be a good indicator of how many customers are being added on a regular basis, as this will let you know you're heading in the right direction.
2. Number of Marketing Campaigns Per Month
The more often we run marketing campaigns, the more often we can bring valuable customers to the bottom of the funnel and generate new business. The best approach is to test different types of campaigns -- email marketing, social media, pay-per-click ads, blog posts, etc. -- and figure out which ones work best for your type of product or service at a given stage of growth. The easier it is to see what's working and why by looking at metrics like open rates and click-through rates, the more likely you are to achieve success.
3. New Qualified Leads per week
The pipeline is what will make or break a sale. The more leads that enter your pipeline, the better likelihood you have of making a sale. In the early stages of the pipeline, it's important to track how many leads are coming into your funnel, because this number can increase or decrease quickly.
In 2020 and 2021, sales professionals - especially those just starting out - will need to focus on building a steady lead flow so they can manage their pipelines efficiently and effectively.
Entry Qualified Leads is the number of new leads who have stated interest in your company or product by requesting an email download or attending a webinar.
4. New Opportunities per week
Opportunities move through the pipeline by converting to closed/won deals. Tracking opportunities allows you to understand exactly how many opportunities are moving through your pipeline and what percentage of those opportunities turn into closed/won deals. If your opportunity numbers aren't increasing week-over-week, you'll want to figure out why that is.
These professionals will need the ability to track the velocity of their entire sales cycle from lead generation all the way through the close. In order to stay competitive, they should be able to see which activities are resulting in more opportunities as well as which ones are not as productive for their business or product line.
5. New Meetings Booked
It's important for a sales team to track the number of meetings that are actually taking place. This will allow them to keep an accurate picture of their pipeline and productivity, and avoid wasting time on unproductive activities such as cold-calling prospects who will never be a good fit for their product or service.
Sales professionals should track how many meetings they book each week because this metric can quickly change month-over-month. If you're increasing your meeting numbers but not seeing a corresponding increase in deals moving through your pipeline, it's a sign that something is going wrong with your sales process.
4. New Closed Deals
Closed deals move through the sales cycle from opportunities into revenue. Sales teams need to have an effective closing funnel if they want to be successful. Tracking closed deals every week will let them know how many opportunities are converting to revenue. It also allows them to get an indication of how well their team is closing business and if they need to get better at closing sales with prospects in certain segments of the pipeline.
Sales professionals should pay close attention to the number of new closed/won deals each week since this is a sign that something has changed in terms of your success ratio with leads in a particular segment or industry. It's important for sales teams to realize when these changes suddenly happen so they can validate whether it's due to a change in the market, their product offering, positioning, messaging, etc.
Sales metrics can be categorized into three main areas: email metrics, phone metrics, and social media metrics. Phone and email are the most common forms of communication in business today. It's hard to go a day without checking your inbox or answering your phone. Because of this constant contact with customers via these channels, it makes sense for businesses to keep track of what works best when communicating via email or phone so they know how to improve their efforts.
Social media metrics, on the other hand, are a relatively new area of sales KPIs. Businesses have only recently started adding social media tools to their arsenal of marketing tactics and by doing so, they can now track interactions that happen on Facebook, Twitter, Instagram, Pinterest, and more.
There are two common email metrics used in e-commerce businesses: open rates and click-through rates. These email metrics measure how many people actually opened an email message or clicked on a link within it. Why is this important? Knowing your open rate allows you to see if your emails were successfully delivered while also showing you how many people read what you wrote.
If someone didn't open your email, it may have been marked as spam. If you don't get any clicks on the link within an email, then perhaps your subject line or body copy needs work. The click-through rate (CTR), on the other hand, tells you how many people clicked on a link in your message versus how many people opened it. A high CTR means customers are interested in what you're offering.
There are four popular phone metrics used to track sales performance: calls per day, average call length, contact rate, and lead conversion rate. All of these metrics measure something different about phone activity but they all tell businesses valuable information about their sales funnel -- where leads are in the sales process. Calls per day tell you how many calls or voice messages are being generated by your marketing efforts, whether it’s a phone, email, or social media.
This information can help you determine if there's a need to adjust your marketing strategy. For example, maybe your ads are driving lots of traffic but it's not converting into sales because you're focusing on the wrong keywords or targeting irrelevant users.
Average call length measures the duration of sales calls while contact rate measures how often an average customer uses their phone to make a purchase instead of filling out an online form for instance. Lead conversion rate quantifies the percentage of leads that turn into actual customers. These metrics are essential when determining whether or not phone calls are worth the investment in time and energy.
There are four popular social media metrics used to track sales performance: likes, shares, mentions, and comments. Likes, shares, and mentions measure activity that happens on Facebook, Twitter Instagram, etc. For example, business owners can expect a lower like rate on their posts because not everyone who follows them will see what they're sharing at once. On the other hand, comments measure the number of times people engage with your content after it's posted -- providing valuable feedback about your products.
Let's start by defining what Sales Key Performance Indicators (KPIs) are, exactly:
It helps organizations measure their organizational performance, which then helps them improve that performance over time. They're typically designed to highlight either lagging or leading indicators that show whether or not an organization is moving towards achieving its business goals. qualified leads for your industry vertical so you decide to launch a new channel marketing campaign.)
They show the symptoms of previously introduced problems and help companies determine the effectiveness of changes in their sales process (i.e., it takes time to see whether or not processes like CRM lead scoring, marketing automation, etc. actually improved revenue.)
They show organizations the way towards increasing revenue over a given period of time and highlight areas that can be improved upon proactively without waiting for leads to turn into opportunities and close.
It tracks metrics related specifically to different channels such as websites, direct mail campaigns, paid search advertising, retail locations/outlets, telemarketing, affiliate programs, and social media efforts. For example, if your company is running a paid search campaign and you see that cost per click (CPC) is trending upwards, you know that either the budget needs to be increased or keyword relevancy should be improved.
The ultimate purpose of sales metrics is to help companies make fact-based, data-driven decisions on what works and what doesn't work in their marketing efforts. According to a study by Microsoft, "Marketing executives think that 60% of their budget is being wasted." A big part of this waste comes from poorly executed marketing activities that fail because they were not based on data or research. Marketing activities can also fall short if businesses don't have the right tools in place to track their progress.
Sales Metrics are measurements of the success or failure of processes, programs, and projects. They can be leading indicators that show how your marketing efforts are affecting new business opportunities, they can be lagging indicators that you're using for long-term trend analysis, or they could be channel-specific metrics that show why certain channels perform better than others.
The most interesting aspect about sales metrics is that each company tracks different types of data depending on what their goals are and where they want to focus their resources. For example, enterprise companies will spend more time focusing on lagging indicators like pipelines and average deal sizes because their revenue depends more on long-term strategy than short-term tactics like lead nurturing campaigns or conversion funnels (which small businesses should worry more about).
