7 Sales Metrics Every Sales Professional Must Track for Success

These are the gauges you use to plan, forecast, reward, punish, inspire, change direction, and so much more. Sales metrics literally tell you how well your business is doing on a daily basis. Sometime even on an hourly business, especially if you sell products online. It's astonishing how many businesses don't pay close enough attention to their gauges then wonder why weird things happen which are seemingly random. However, there usually isn't anything random about what happens in a business in most cases. Typically, it comes down to how closely you were paying attention to the details of your sales metrics. That's why in this article I discuss the 7 metrics sales professionals should track, at minimum to see positive results, or at least get them moving in the right direction.

Picture this, you're participating in a race, and you are at the starting line, your runners are the leads in this race, but at the end of it, only some of them get to the finish line as customers. How would you calculate this? Well, you simply look at the number of leads that began the race against those that got to the finish line.

Therefore, telling you how many initial leads converted into winners. That's it, end of class... But do you know how many businesses cannot tell you how many leads they started off with at the beginning of the day? Sure, they can tell you how many winners they had, but they can't tell you how many leads were in the race to begin with, and this is something that is a huge indicator of the efficacy of your sales process.

Why It Matters: A high conversion rate let's your management team and executive team how well their strategies and tactics have been working. According to research by HubSpot, companies with an effective lead management process enjoy a 10% or greater increase in revenue within 6-9 months. If your conversion rate is low, then it's surely a sign that an overhaul needs to be done, perhaps by tailoring the sales team pitch more closely to your prospects' needs.

Think of the sales cycle length as the time it takes to complete a marathon. When you augment to a more condensed timeframe, even though you might have a clock time of one hour and thirty minutes per mile, the fact that you push yourself to complete the run at one hour twenty minutes drive you to perform better.

This statistic gauges the speed at which you can complete a transaction from the first conversation to the last handshake.

Why It Matters: To build a business into a system, your revenue engine has to be operating at its highest level. There is no coincidence why companies with shorter sales cycles often outperform their competitors with longer sales cycles.

CSO Insights reports that these companies not only close deals faster but also achieve higher win rates and larger deal sizes. A lengthy sales cycle might indicate hurdles that need clearing, such as better qualifying leads or addressing objections sooner.

Average deal size is like the prize money at the end of the race. It tells you the revenue potential of your sales efforts. This metric is crucial for setting realistic sales targets and forecasting future revenue.

Why It Matters: Bigger deals mean bigger revenue. By focusing on strategies to increase the average deal size, such as upselling and cross-selling, companies can see substantial revenue growth. McKinsey & Company found that businesses focusing on tailored customer solutions saw a 10-20% revenue increase.

Every runner in your race has a cost associated with getting them to the starting line. Customer Acquisition Cost (CAC) measures this expense. It includes all sales and marketing costs divided by the number of new customers acquired.

Why It Matters: Lowering your CAC while maintaining or increasing sales volume is a hallmark of an efficient sales strategy. According to ProfitWell, companies that keep their CAC below their Customer Lifetime Value (CLV) enjoy sustainable growth and profitability. Efficient resource allocation is crucial for a healthy bottom line.

CLV is the total revenue you can expect from a customer over the duration of your relationship. It's like knowing how much each runner will contribute to your overall success in the race.

Why It Matters: Understanding CLV helps you make informed decisions about customer retention and acquisition investments. Harvard Business Review highlights that increasing customer retention rates by 5% can lead to a profit increase of 25% to 95%. The more value a customer provides over time, the more you should be willing to invest in acquiring and retaining them.

Sales Pipeline Coverage is your safety net. It measures the ratio between your total pipeline value and your sales target, ensuring you have enough potential deals to meet your goals.

Why It Matters: A strong pipeline coverage ratio means you're prepared for uncertainties. Salesforce reports that companies with meticulous pipeline management are 28% more likely to meet their revenue targets. A healthy pipeline acts as a buffer against lost opportunities and market fluctuations.

Win rate is the percentage of deals you close from your total opportunities. It's like your batting average in baseball—the higher, the better.

Why It Matters: Improving your win rate means more efficient use of your sales efforts. The RAIN Group found that companies focusing on win rate optimization are 50% more likely to exceed their sales targets. By refining your techniques and aligning them with customer needs, you can significantly boost your win rate.

At Closer College TT, our LIPS Sales System (Lock, Investigate, Present, State) aligns perfectly with these key metrics. By locking in on prospects, thoroughly investigating their needs, presenting tailored solutions, and clearly stating the value, sales professionals can enhance their performance across all these metrics.

Example: Consider a software company using the LIPS Sales System. By deeply investigating customer pain points and presenting customized solutions, they increased their lead conversion rate by 20% and reduced their sales cycle length by 15%. This approach not only improved their efficiency but also boosted their revenue.