Sales teams are obsessed with numbers.
From growth to revenue, from conversion rate to lifetime value of the customer, and from conversion rate to customer lifetime value, the sales metrics that matter can help us determine the situation and what we can do. At the end of the day, “what gets measured gets managed.”
However, even though today’s technology for marketing and sales enables us to collect all the data possible, we’re faced with another issue — excessive data!
A lot of sales executives are scrambling to gauge everything and anything without having any understanding of what’s driving the business. At the same time, salespeople are immersed in metrics and are getting lost in the shuffle.
The biggest challenge when using data to boost sales is to identify the most effective and essential performance metrics (KPIs) to choose the suitable activities with the most significant effect on the bottom line as well as profit.
Understanding Sales Metrics
Sales metrics are numbers that indicate how an individual, group, or entire organization is performing. They are helpful in monitoring progress toward objectives, planning for expansion, changing sales compensation, giving incentives, and recognizing strategic issues.
You may be wondering at this moment what kinds of sales metrics are and which must be tracked.
A few of the most critical factors to help your company succeed are covered in this article. The following list of measures has been divided into the following categories:
1. Overall Sales Performance
In the case of the overall health of your company in general, These high-level indicators are essential in determining whether you’re making enough cash.
More importantly, are your achievements significant?
It is essential to track them in order to satisfy the board as well as the bank’s management. However, they will not tell you anything about the performance of particular people or strategies.
2. Detailed Activity Metrics
By using these KPIs, you will be able to gain an understanding of the specific actions that your team of salespeople perform on a weekly or daily basis.
How effective is their management of time? Are they able to reach enough people through their efforts?
If a sales representative needs to call more or send out more emails, it’s the responsibility of the manager to push the sales rep to get involved.
3. Pipeline Performance Metrics
Pipeline metrics, as opposed to activity-related metrics, focus on the future, usually within the next few weeks or even months.
Even if everything seems great at the moment, you need to ask yourself whether you’re ready to continue growing at the pace you’ve been.
4. Metrics for Lead Generation
These indicators, similar to your pipeline, focus on predicting future performance.
Even if you’re closing every chance that you get, you need more if you’re generating only one opportunity per month.
Although you’re sending hundreds of emails every day and you have a large pipeline, it’s not going to really matter if you’re closing contracts.
This is why it’s crucial to analyze a range of factors to gain an accurate overview of your sales success.
5. Metrics for Customer Satisfaction
In the midst of all the hard, cold figures, there’s an element that is more important than the transaction itself, which is customer satisfaction.
The metric, though intangible, is vital information about the long-term and the health of business relations. A satisfied customer isn’t just a regular customer but a spokesperson for the company’s brand.
Why is customer satisfaction important to you?
Sales competition is fierce, and the choices for customers are limitless. So, the difference is often based on the quality of the experience.
Scores on customer satisfaction give you direct insight into what the customers are feeling about their experiences with your company.
It includes everything from initial contact to the purchase process to after-sales service. The highest levels of satisfaction indicate clients have a higher likelihood of coming back and suggesting your products or services to others. They display more excellent value throughout their lives.
To gauge and quantify customer satisfaction, you could employ a variety of methods, such as questionnaires, feedback forms, and follow-up emails or calls after a sale is completed. Metrics like the Net Promoter Score (NPS) or Customer Satisfaction Score (CSAT), as well as the Customer Effort Score (CES), can be well-known and efficient ways to determine the level of satisfaction among customers.
These tools will assist you in understanding whether your customers are happy and how much they are feeling about their experiences.
Identifying Key Sales Metrics
A KPI-driven sales method can provide the direction the sales team requires to propel a business forward in the proper direction. To ensure that this approach will be practical, you must first determine the things that must be measured and how to do it:
1. Start with the Big Picture
In the first place, you have to determine the most critical business goals that you intend to pursue within the timeframe you have defined.
Do you wish to see higher revenues or growth?
Do you wish to boost the number of customers you acquire or increase customer retention?
The KPIs that you monitor must help you achieve your objectives. In the absence of this, your sales teams are likely to be completing lots of work that isn’t in line with the vision of your company.
2. Focus on Leading Indicators, Not Lagging Indicators
The most crucial concern you have to consider is “What activities are really significant?”
To find a satisfactory answer to that question, you must identify the most critical indicators.
Leading indicators assess the steps taken to ensure long-term success. Some examples include the number of sales calls made in a given period, the number of opportunities created or lost, conformance with the sales process, and an estimated pipeline value that is weighted.
However, be careful to stay focused on the lagging indicators.
The data shows what’s occurred, including total sales and the average size of deals, closing rate renewals, acquisition costs, etc. And your sales team won’t be able to alter the past.
It is crucial to measure lagging indicators, as it helps you understand whether you’ve met your objectives. But, focusing solely on indicators that are lagging doesn’t permit you to make changes in outcomes; you’re only able to use the data to modify your behaviors for the upcoming months or the following quarter.
If you’re tracking the leading indicator KPIs, You can adjust them throughout the period to achieve your sales targets (lagging indicators).
3. Understanding Customer Motivations
What would you do if you could identify what triggers your customers to purchase? You’d do more of it, I would think, wouldn’t you?
To discover what causes your customers to move further along the buying path, You must break down the selling funnel by looking at the various phases: prospecting, qualifying and advancing prospects closing, and post-sales.
Examine each step from the perspective of the buyer. What transpired during the buying process led them to take the necessary steps towards conversion?
Did you receive a contact from your sales staff?
Did your email prompt an answer?
A post on social media may attract the attention of a potential customer.
At what point in the selling cycle did these sales activities take place?
Find the triggers and assess the effectiveness of their triggers: test A/B-testing emails, scripts, or other messages to increase efficiency.
Review your marketing and sales activities and the impact they have on the different stages that buyers go through. Utilize this data to create some of your most important indicators to make sure your team is always taking the necessary actions to increase sales.
4. Gather Insights from the Frontline
Your salespeople deal with customers and lead throughout the day. They are an excellent source of data to assist in identifying the most effective actions and triggers.
Don’t only talk to your best performers. Instead, it would help if you spoke to sales reps who have different experiences so that you can analyze and determine what aspects are associated with success in sales.
Sales reps are on the Frontline and can provide insights regarding customers that management needs to be aware of.
Please take note of them, take advantage of the front-row seats, and try your best to know what drives your customers and the best way to prepare your sales reps to address the issues and demands of potential customers.
5. Analyze Information to Identify Trends
After collecting data from numerous sources, you have lots to weigh.
But, keeping track of too many KPIs can make things complicated and impede your team’s efforts.
Sometimes, it’s tempting to overstretch yourself. To avoid this:
- Identify commonalities and trends from the data you’ve gathered.
- Choose three or five KPIs to concentrate on.
- Track the results to help you fine-tune the metrics you use and how they are measured.
6. Measure the Right Metrics Effectively
In the end, you’re measuring KPIs to assist your sales team in selling more quickly and more effectively.
Before measuring anything, take note of the result. What is the way your sales team is likely to increase sales efficiency?
Assess the factors that aid your team in reaching their objectives. Determine what factors are driving sales and which behaviors and actions can negatively affect results, and work to improve the former while reducing the latter.
Only track KPIs that aid in this objective. This confuses and leads your team members to be more focused on collecting data rather than doing something else, making it difficult for them to discern the fundamental factors that impact sales performance.
Optimize Metrics for Effectiveness
In the process of gathering and measuring KPIs, it is only the beginning. You should also convey the implications and impact of your KPIs to your sales team in a transparent manner and increase the transparency and visibility of sales within the company as a whole.
Utilize sales tools that give the entire organization access to these metrics and allow salespeople to join the conversation with their insights.
Make sense of and display the information using dashboards or scorecards. You can also use the reports to make information accessible and easy to comprehend. Utilize role-based access to make sure that team members have access to the right amount and type of data.
However, KPIs aren’t fixed in stone, and they are subject to change according to changes in market trends or customer preferences. Review these steps frequently to ensure you’re tracking the SDR indicators that are important to stay in the loop.
