A Guide To Sales Metrics (With Types, Benefits And Tips)

Updated 27 September 2022

Sales are important in the long-term growth of businesses and revenue generation. Sales metrics are vital to business models and help strategic growth initiatives by providing essential sales data. If you want to work as a sales representative or in similar roles, learning about various metrics used in sales can help you improve your performance and add value to organisations. In this article, we discuss what sales metrics are, outline various metrics and highlight some tips and benefits of using these metrics to track higher-level business goals and sales processes and workflows.

What Are Sales Metrics?

Sales metrics are important data that help improve the sales performance of a team or organisation. Analysing these metrics helps an organisation identify areas for improvement and evaluate the success of its sales initiatives. The sales team can use this information to evaluate their team activities and encourage more data-driven conversations. A sales team can benefit from the metrics in the following ways:

  • Keeping track of their sales progress

  • Contributing to accurate sales forecasts to prepare for scaling and growth

  • Determining and rewarding compensation, commissions and incentives

Related: How To Improve Your Sales Skills: A Step-By-Step Guide

5 Key Metrics For Sales

Here are some metrics used in sales:

1. Lead generation metrics

This metric describes how well the sales team is prospecting to generate initial customer interest and shows trends and patterns contributing to the team's overall results. It also helps define the ideal customers and craft compelling messages for long-term results. Some lead generation metrics include:

  • Cost per lead: This metric assesses the cost incurred by each lead to the company and predicts the eventual return on investment (ROI).

  • Organic traffic: This metric helps improve the search engine optimisation (SEO) results and lower the cost per lead in the long run.

  • Average lead response time: This metric assesses the average time customers take to respond to information sent out by the sales team, along with their interest in the information provided.

  • Qualified leads: This metric helps identify and accept people ready for a direct sales follow-up.

  • Landing page conversion rate: This metric helps understand landing page performance.

Related: How To Generate Leads For A Business: A Comprehensive Guide

2. Sales activity metrics

Sales activity metrics provide actionable insights into sales team behaviour, productivity and performance. They help make more accurate sales forecasts, evaluate productivity against set goals, enhance ways to close more deals and assist high-performing sales representatives for better performance. Some sales activity metrics include:

  • Targets: This metric helps drive sales and creates a sense of accomplishment when representatives meet their targets.

  • Number of emails sent: This metric focuses on key performance indicators (KPIs), such as the ratio of emails sent to emails opened, open rates and click-through rates and the ratio of subscriptions to unsubscribes.

  • Number of calls logged: It determines how many calls sales representatives have received, made, answered or missed and optimises their efficiency.

  • Number of conversations: This metric measures the calls initiated by representatives or the people with whom they speak.

  • Close ratio: It assesses the ratio of the number of sales to the number of proposals sent to qualified prospects.

3. Sales pipeline metrics

A sales pipeline allows companies to visualise where prospects are in the sales process. Sales pipeline metrics assess the financial goals of a company along with its long-term objectives. Some sales pipeline metrics include:

  • Win rate: measures the number of qualified leads converting into customers

  • Customer acquisition cost (CAC): measures the costs incurred in sales and marketing to gain a new customer

  • Deal profitability: indicates whether the costs incurred to get a deal are worth the total monetary value of the deal

  • Sales-to-support ratio: analyses how often products need customer support after their sale

  • Customer churn: assesses the rate at which customers or subscribers leave a company

Related: What Are Profitability Ratios? (With Types And Examples)

4. Outreach metrics

Outreach metrics show the most effective methods for converting sales prospects into leads. It depends on a company's process and strategy to track outreach sales. This may include metrics, such as:

  • Engagement rate: measures the level of engagement generated by a brand campaign or created content

  • Open rate: measures the number of people who opened a sales team's emails after receiving them

  • Response rate: indicates whether a sales team's messaging is getting its users' attention and whether it prompts users to respond to these messages effectively.

  • Lead response time: measures a sales representative's average time to connect with a lead

Related: What Is Prospecting? (Methods And Steps To Reach Prospects)

5. Sales productivity metrics

Sales productivity metrics are metrics that measure the efficiency of a sales team. It is essential to improve the team's sales productivity. This enables the sales representatives to meet their goals faster. Some sales productivity metrics include the percentage of time selling, percentage of high-quality lead follow-up and percentage of time in content creation.

Related: 10 Tips For Working Effectively And Improving Productivity

Differences Between Sales Metrics And KPIs

Though people may use the two terms interchangeably, they differ in some ways. Sales metrics measure how an individual, team or company performs in terms of sales over a period. Sales KPIs measure performance against strategic goals. The KPIs evaluate progress towards specific objectives, while metrics used in sales measure how well a company is doing as a whole.

While metrics do not necessarily require targets, KPIs always require targets for a company's strategic decisions.

Related: What Is A Key Performance Indicator? Importance And Types

Benefits Of Using Metrics In Sales

Here are some benefits of using metrics in sales:

Enhance employee performance

Using various metrics in sales lets employees know if they are performing well and making progress in meeting sales goals. Employees can use these metrics to drive more sales in the company using search engine optimisation (SEO) and social media. This can benefit the company in generating leads and growing its customer base.

Related: Employee Engagement Tools (With Features And Examples)

Identify and retain customers

Along with various metrics and a customer relationship management (CRM) tool, sales teams can identify potential customers and plan their marketing strategies and promotions to increase their sales. Identifying leads can help decide the right strategy to convert them into customers. Metrics, such as churn rate and customer lifetime value, can help improve offers and create positive experiences with the brand through optimisation.

Related: What Is A Churn Rate? (With Importance, Merits And Examples)

Tips For Tracking Metrics In Sales

Here are some ways to track these metrics:

Determine the metrics

Choose a few key metrics that represent the company's most important sales drivers. Choosing the right metrics helps determine performance against set objectives and goals, take necessary steps for continued sales success and monitor progress. This depends on the short- and long-term goals of the organisation.

Related: How To Set And Achieve Long-Term Goals (With Examples)

Decide the frequency of measuring the metrics

Establish a frequency for measuring the chosen metrics. Many sales companies choose their sales goals annually, which sales professionals can further divide into monthly or quarterly targets. Based on timely evaluations of sales goals, the sales team can decide the frequency of measuring the metrics and take occasional corrective steps to review procedures. For instance, the sales team can assess metrics, such as the number of calls made on a monthly basis.

Use a CRM

CRM software lets companies track metrics to aggregate data and measure progress accurately. CRM dashboards gather all the essential metrics and reports in one place based on the selected metrics. The software generates information that sales professionals can track across the individual, team and company levels. Professionals can use valuable metrics, such as churn rate, quota attainment and customer retention rate to create relevant reports in the CRM.

Related: What Is CRM? With Benefits And How To Develop A Strategy

Use sales trends analysis

It involves analysing sales trends over a period from multiple sources and analysing past data to identify patterns. Metrics like sales growth, average lead response time, pipeline value and sales cycle length can help provide data to track and review trends. Sales professionals can then compare recent metrics with past ones to develop trends and analyse them.

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