Every Sales Operations team knows the importance of accurate and consistent measurements. Measuring your sales – and the processes related to it – is important and this is why you need to pay attention to sales metrics.
Failure to track sales metrics means you won’t have sales analytics, and this will lead to inefficiency. To avoid this, and lead your team to success instead, you should use the 20 sales metrics that every sales ops should know.
Before we get into the 20 sales metrics every sales ops should know, let’s talk about sales analytics.
Using sales analytics, sales ops can strategize and make data-based changes, in order to optimize sales teams and their performance.
Furthermore, sales analytics can be leveraged at other levels too. For instance, at a process level, you have better insights and increased visibility of operations. These insights give you the ability to take action and make better and more strategic decisions.
Without accurate sales analytics, sales ops will fail to improve sales effectiveness and efficiency. And, to ensure you have the best sales analytics, you must track specific metrics.
What Are The 20 Sales Metrics Should Sales Ops Know?
To sales ops, whose ultimate goal is to better sales processes as a whole, there are quite a few metrics that must be kept in mind. Below we will list 20 sales metrics that every sales ops team should know.
1. Revenue (Annual And Monthly Recurring)
Annual recurring revenue is of utmost importance to sales ops in SaaS businesses. The metric tells you the amount of money your organization will bring in through sales in a financial year. Using this figure, you can forecast your potential growth.
Similarly, monthly recurring revenue is the revenue that you can anticipate in a month. In other words, it shows you how much your sales team is bringing in per month. If you’re struggling to forecast the monthly recurring revenue from your sales deals, connect with the revVana team as they can help automate this process directly from your CRM. This is extremely helpful when you have multiple products with many accounts that vary in size
2. Quota Realization
This is the proportion of deals that a rep closes. It should be weighed against their allocated quota per period (monthly, yearly, or quarterly, for example). The proportion could be by the number of sales or by revenue. The metric shows you if your reps are meeting their targets or if they need more training.
3. Rate Of Conversion
This is the number of leads that end up as a closed sale. Looking at this metric across time can help you understand your sales team’s abilities. Specifically, it tells you about their ability to convince leads to become customers. In addition, it can give you insight into the kinds of leads that are more likely to become closed-deals, which means your marketing team can target their efforts better.
Rate of Conversion Calculation
Rate of conversion = (number of closed deals or revenue in the given time period) / (quota for that time period)
4. Win Rate
This is the average number of deals that are closed in a specific period of time. It is recommended for you to monitor this metric in two ways: first, the total tally of deals, and second, the monetary value of those deals.
The win rate calculation:
Win rate = total # of won opportunities/total # of closed opportunities (both won and lost)
5.Average Price Per Deal
The average price per deal is a reflection of the average expected monetary value of each deal that is won. The metric can show you whether your organization can land bigger deals or not. This metric is also useful for tracking historical trends.
Average Price Per Deal Calculation:
Average Price = total value of all deals made/number of deals
6. Profit Margin (Average)
When you look at the average profit margin, you are looking at a figure that shows you how well your organization is doing.
Profit Margin Calculations:
Gross Profit Margin = Gross Profit / Revenue x 100
Operating Profit Margin = Operating Profit / Revenue x 100
Net Profit Margin = Net Income / Revenue x 100
7. Churn Rate
Your churn rate shows how many customers are failing to renew their contracts, or are canceling their subscriptions, in a set period of time. A high churn rate will mean that your growth is very slow. This is an indicator that something needs to change.
Churn Rate Calculation:
Churn rate = total number of customers churned in a period/number of customers you had at the beginning of that period
8. Percentage of Retention
Your net percentage of retention is closely linked to your churn rate. It is an indicator of the number of customers or subscriptions you are holding on to in a set time period.
Retention rate calculation:
Retention Rate = ((number of customers at the end of a period – new customers added in that period) / number of customers at the beginning of the period) x 100
9. Pipeline Coverage
This metric measures the number of opportunities that are in your pipeline. It can assist you in making it to your sales goal, by showing you where to direct the attention of your sales. Due to the uncertainty of markets in the present, keeping an eye on this metric can be very useful.
Pipeline coverage calculation:
Pipeline coverage = total pipeline for a period/quota for the period
10. Sales Growth
Increasing revenue is the main goal, right? This means the growth of your sales is imperative to track.
Sales growth calculation:
Sales growth = (total sales for the period – total sales for the previous period)/total sales for the previous period x 100
11. Product Performance
If your company sells various products, it can be useful to track the sales for each, especially if each product has a different sales target. It can help you decide if a product should be marketed differently, or whether it should be sold at all.
12. Sell-through Rate
Selling physical items means that you must consider the sales of each item versus the inventory that you have. Having the details of this makes it easier for you to plan in terms of supply-chain, and can assist in sales forecasting.
Sell through rate calculation:
Sell-through rate = (total units sold/total units received) x 100
13. Cannibalization Rate
Do you have a new product available? If so, it is advised that you track whether it is affecting the sales of your other products. By considering this metric, you can ensure a more pleasant customer experience.
Cannibalization rate calculation:
Cannibalization = sales loss of existing product/sales of new product
14. Sales By Region
If your organization is selling globally, you should monitor the sales by region. From this, you will know where you need to increase marketing efforts, as you’ll know where you’re not selling well and where you are profitable and competitive.
15. Sales Stages Used
Sales ops should try to simplify the sales process as much as they can. This ensures that the process is seamless. If you track the use of your organization’s defined sales stages, you will have insight into which are being used and which are not. As such, you’ll be able to remove what is unnecessary.
16. Sales Time Versus Overhead Time
By comparing the time reps spend on admin to the time they spend selling, you can identify where adjustments need to be made in order to increase sales efforts.
17. Sales Productivity
This includes any sales activity that is carried out by any member of a team. It refers to engagement with customers including emails, meetings, calls, and more. This gives you insight into the engagement of your potential customers, which in turn tells you about the health of the deal. Further, it allows you to track sales performance.
18. Lead Response Time
You should track how long it takes for your reps to contact leads provided to them by marketing. A slow response time may mean lost sales.
Lead response time rate calculation:
Lead response time rate = total time between lead creation and first response for each lead assigned to a rep/total number of leads responded to.
19. Sale Cycle Length
The length of your sales cycle is how long, on average, it takes for a customer to go from being a lead to a closed sale. Having clarity on this can show you if there are bottlenecks in your process. As such, you will be able to upgrade your processes and ensure that you don’t lose potential deals.
Sale cycle length calculation:
Sale cycle length = total days taken to close each sale/total number of deals
20. Sales Rep Turnover
A high turnover rate is quite costly to your organization. It means you have to spend money hiring new reps, and you risk possible lost sales due to your remaining reps being overworked. By knowing your turnover rate, you can be prepared ahead of time.
Sales rep turnover calculation:
Sales rep turnover = number of employees who left in a period/average number of employees in the team for that period
By keeping in mind the 20 sales metrics that every sales ops should know, you can ensure the success of your sales team and your organization too. Many of these metrics also come in handy for forecasting both sales and revenue, which in turn ensures that you are making the best decisions for your business.