When your boss or the C-Suite execs at your office ask pointed questions about your sales metrics, your response should not start with: “I think…”
As far as reporting and sales analytics are concerned, you have to abandon the abstract realm of “I think” and land with a strong footing in the concrete world of: “I know.”
Know how much revenue your team brings in every month, quarter, and year.
Know the number of opportunities your reps have closed-won this year to date.
The best sales leaders are the ones who track the data, obsess over their strategies, provide transparency into the success of their teams, and can drill down into the activity of each rep. And they know how to drill down into the metrics that matter most to their specific company, industry, and team.
Below, we rounded up a list of 19 key sales metrics bucketed into five major categories:
Each bucket is segmented into more specific sales metrics and paired with a small thought starter or actionable tactic. To further help make these tangible for your sales teams, we’ll detail some of the metrics our own sales team here at PhoneBurner places a heavy emphasis on.
Let’s get after it.
19 Key Sales Metrics for You to Track
The only thing better than having a kickass sales team is being able to show your boss, C-Suite, or the board specifically how much revenue they generate. But the big picture isn’t the only picture to pay attention to here.
There are more minute details to focus on, like how much money you’re spending to generate the amount of revenue you do. When you can pin down all the specifics, you’ll have a healthier, more holistic view of your sales teams and be able to accurately forecast both short and long-term models.
1. Monthly Recurring Revenue (MRR)
Your MRR is the total revenue you expect to make every month of the year. This is a favorite SaaS sales metric for companies with subscription-based payment models, like PhoneBurner.
Our sales team at PhoneBurner gauges success for their teams by analyzing how much new MRR reps have closed month-to-date, and how much MRR each AE has personally closed.
To get a rough estimate of your MRR, add up the monthly revenue you get from each customer. Just remember to exclude one-time payments, like onboarding fees, from your calculation since they’re not included month over month.
2. Annual Recurring Revenue
As the name implies, ARR is the total amount of revenue your team brings in each year. If you’re looking to get a quick estimate, multiple your MRR by 12.
One reason companies like to focus on ARR is that it doesn’t allow for variance. Your MRR might rollercoaster month to month due to seasonal trends, like the holidays, but your ARR reflects the entire year in one upward or downward trend.
That way, you can look at historical ARR metrics and evaluate your company’s growth year over year. Your team can also drill down and look at ARR generated from specific products, regions, or sales teams.
3. Customer Acquisition Cost (CAC)
How much money do you spend to acquire one new customer? There’s a long list of factors that impact CAC, but the two most common ones are:
- Lead generation cost: The marketing spend needed to create a new lead
- Lead conversion cost: The sales costs, like salaries, needed to turn that lead into a customer
Gather your total marketing and sales costs in a specific time period. Then, divide that by your total number of total new customers.
Let’s say your total monthly marketing and sales spend for February was $20,000, and you closed five new customers that month, your CAC is $4,000. If your customers are only generating $1,000 in MRR ($12,000 in ARR), you will net $8,000.
Maybe that’s right on target for your forecasting. But if you want to increase your ARR, you can reduce the CAC by decreasing marketing costs (ad spend), speeding up the deal cycle, or streamlining sales processes.
Opportunities, aka qualified leads, are exciting because there’s real potential they’ll translate into a closed-won deal. At the opportunity stage, your account executives (AEs) know that:
- The prospect needs a new solution
- Your solution is a good fit
- They have the money to buy
- They want to buy now
From here, the deal can one of two ways: closed-lost or closed-won. Tracking sales performance metrics around your opportunities will help ensure you win deals or understand why you lost them.
4. Total Closed Won and Lost Opportunities
Landing a closed-won deal depends largely on the closing skills of an AE. You need to know how many opportunities are won or lost, and by which AEs. That way, if someone is struggling you can get them additional support or training. On the other hand, you can easily recognize your top sellers and recognize their hard work.
5. Opportunities Won by Lead Source
There are likely some lead sources that convert into opportunities better than others. For example, leads from webinar registrations might become opportunities more often than someone who downloads a top-funnel eBook. Find out what your best source is and double down on pumping your pipeline with those leads.
6. Opportunities Lost to Competitors
If an opportunity is closed-lost, it’s important to know why. This is especially important if it’s because they chose a competitor. Work to identify the product gap between your offering and your competitor, and then equip your sales team with the tools, talking points, or resources needed to directly address it in conversations.
7. Number of Conversations Needed to Win Opportunities
How many times do your AEs need to speak with someone to closed-won an opportunity? This will likely be different for each business depending on your product. But it’s important to know so you can accurately estimate your average deal cycle and how long it takes to move someone from open opportunity to closed-won.
Sales Pipeline Metrics
Your pipeline shows where all the ongoing deals are in your sales funnel, what’s stalling movement, and which activities generate revenue. Not tracking the right sales analytics, as they relate to your pipeline, could disrupt your ability to hold reps accountable and diminish your insight into how effective your overall sales engine is.
8. Average Length of Deal Cycle
How long does it take a lead to go through your entire sales pipeline, from first-time engagement to closed-won? When you can pin down what your average deal cycle is, you can introduce a strong layer of predictability into your sales forecasting models.
There’s no one-size-fits-all for length of deal cycle, although it tends to be shorter when selling to SMB and longer when selling upmarket to enterprise prospects. Additionally, specific sales tactics like cold calling may increase the length of your deal cycle since customers may not want to purchase right away.
Similarly, inbound leads who want to purchase right away will speed up your deal cycle. Regardless, find out what your average deal cycle is so you can gauge what’s taking too long, the edge cases that come in faster than usual, and what’s right on target.
9. Win Rate
Win rate is the percentage of opportunities that were labeled closed-won, and it’s often confused with conversion rate. Typically, win rate is used as a quick glance into the overall efficiency of your sales engine or the ability of your individual sales reps to close deals.
To get an estimate on what your win rate is, take all of your closed-won opportunities and divide them by your total opportunities in a given time period.
Don’t put all your eggs into the win rate basket though. Instead, take it for what it is: a good indicator of strong sales closers and high lead quality.
10. Conversion Rate
Conversion rates are a much more robust picture of your sales organization’s health than win rates. Our sales leadership at PhoneBurner pays close attention to conversion rates, specifically:
- The percentage of all leads that have been qualified as business opportunities
- Conversion rates for each SDR
- The percentage of demos that converted to paying customers
- Conversion rates for each AE
There are many conversion points throughout the sales pipeline that you may track, like when a lead flips to an opportunity or when a prospect moves to the next level of your sales funnel. No matter what conversion rates are most important to your business, tracking them ensures your team continues to generate consistent opportunities and revenue.
For example, if your SDRs aren’t getting enough inbound leads to qualify, you may need to work with marketing and align on more enticing top-funnel messaging. Likewise, if your AEs aren’t closing demos into customers, you may want to investigate why and invest in closing skills training if needed.
11. Churn Rate
Sometimes, customers decide they want to leave your company and go elsewhere. That’s OK, it happens. But it’s crucial that you track your churn rate in order to determine the cost associated with replacing customers you’ve invested time, overhead, and money to bring in.
It’s always more cost-effective to retain current customers than it is to acquire new ones. And if you’re hemorrhaging money acquiring new customers every month, only to have them churn shortly after, are you really winning?
Measuring the sales analytics associated with churn rate also helps show how satisfied your customers are overall. If you have an especially high churn rate which extends over a few months or quarters, you need to launch new strategies focused on retaining existing customers and scoring new ones. Increasing your customer retention rates by only 5% can increase profits by 25% to 95%.
Activity-Related Sales Metrics
Each member of your sales team will have different activity-related metrics that indicate whether or not they’re performing well in their roles. SDRs focus on cold calls, qualifying leads and passing those leads to AEs.
AEs need to set meetings, host demos, and close deals. Similarly, your outside and inside sales reps will have different targets they aim for. Our sales leadership team at PhoneBurner closely tracks daily activity for the different functions on their sales teams in order to maintain a pulse on team and individual activity.
12. Number of Outbound Calls Made Daily by SDRs
SDRs focus heavily on outbound activities, like cold calling, in order to vet and qualify leads for the AEs. There’s no perfect number of calls SDRs should make every day: this will be different for each business.
At the end of the day, outbound sales is a numbers game and the more calls an SDR makes the higher chance a lead becomes an opportunity. To help keep your SDRs smiling and dialing, you can introduce a sales spiff or fun competition where the person who makes the most calls wins a prize.
13. Number of Demos Conducted Daily and Monthly AEs
Similar to an SDRs calls, AEs need to host demos. It’s a critical part of the sales process where they get important face time with a prospect, show them the product, and make a direct sales pitch. Again, the number of demos you require your AEs to make each day and month will vary depending on your business and product.
Spiffs and competitions work well to motivate your AEs here, just as they do for SDRs. But since demos require a bit more expertise and time to host, you can up the ante with a bigger prize: an extra day of PTO instead of a gift card for coffee.
14. Demo Attendance Rate
It’s not uncommon for people to ghost their scheduled demos with your AEs. It’s disheartening. There’re likely some other, very colorful words sales teams would also use to convey their frustration when this happens (we get it!).
What’s important here is to first find out how often this happens, and then work to get to the “why” behind the situation. It this is a frequent occurrence, especially with bottom of the funnel demos, that’s a red flag. You need to examine if your AEs are pushing too hard, not pushing hard enough, scheduling at the wrong time of day, or not following up with a sense of healthy urgency.
15. Number of Inbound Calls Daily and Weekly
Some of the hottest leads your sales teams will get are inbound leads. And if someone is calling in asking to speak to a rep, your team needs to quickly field those calls and get them into the sales funnel. That’s money on the line with a serious lead who could quickly convert into an opportunity, and a closed-won soon after.
16. Percentage of Missed Calls
If you’re getting inbound calls frequently, and you aren’t around to pick them up, it could end up costing you money in the long run. Track how many missed inbound calls you have, and then assess whether you want to allocate any resources to ensure you’re either answering them in real-time or getting back to contacts quickly.
You’re 100 times more likely to connect with the lead if you return their call within five minutes as opposed to waiting 30 minutes or more.
Prospecting takes many shapes and sizes in today’s digital world: emails, phone calls, social media engagements, events, conferences, or good old-fashioned public meetings. But what’s the most effective way for your team to prospect?
Whether your SDR team is hunting for new contacts, or your AEs are self-prospecting leads, find what works best, what doesn’t, and ensure everyone is making the most of their valuable time. At PhoneBurner, our team focuses most heavily on these prospecting metrics to gauge success.
17. Percentage of Leads that Were Bad
Bringing in a ton of lead volume doesn’t count for much if you have to disqualify 95% of your leads. Quality is everything. As a sales leader, track the number of leads who are unreachable, have bad or disconnected phone numbers, or direct to the wrong contact.
If your team is consistently dealing with poor-quality leads, it may warrant an adjustment to prospecting methods. You may want to touch base with your marketing team and work together to evaluate new sources for healthy, vibrant leads.
18. Percentage of Leads Being Worked
When a lead hasn’t been reached, that doesn’t mean it’s immediately a bad lead. There are leads that look legitimate by all intents and purposes, but your reps simply haven’t been able to get in touch with them. In those cases, keep a close eye on the leads and be sure to move them into the sales funnel as soon as they’re in contact with your team. If they end up being bad leads, exclude them and move on to the next one.
19. Percentage of Contacted Leads that Don’t Move Forward
Not every lead is going to convert for your team. In situations where you’re able to successfully contact the right person, but they decide not to move forward in the sales process, make sure your reps aren’t afraid to probe a little and ask why.
Then, you can take the time to review the call notes or the call recording and find out what barrier stood in their way. This will help you adjust and reach back out to the same contact in the near future with a follow-up sales pitch or ensure you’re avoiding similar roadblocks with other leads.
Keep on Trackin’ Those Sales Metrics
If you’re really excited about manually calculating your sales metrics, there are plenty of formulae you can use to do it. Good on you. But for individuals who are mathematically challenged, like me, there are an equal number of tech platforms that will do it for you.
With the right software, you can customize your data dashboards, pull in metrics from other sales tools you use, and easily share insights across your organization. Further, when you have a clear line of sight into your sales metrics, you can use them to motivate your reps to be their best.
Every company is different, and the sales metrics that you choose to track will vary depending on what your product is, who your prospects are, and what your specific revenue goals might be. Regardless, transparency into your key sales metrics and the ability to report on your successes as a team is crucial to the long-term viability of your sales engine.
- Automatically track calls, dialing activity, and call outcomes
- Track a reps communication activity like voicemails, emails, and texts
- Build custom reports to measure performance of reps
- Deliver reports directly to your inbox
- Broadcast real-time leaderboards to your team
- Record calls for training purposes
If you’d like to see learn more, reach out to our team and schedule a demo today. We’ll put you in our pipeline and see if our SDRs and AEs can convert you into a closed-won opportunity. Whoa, totally “meta!”