Analytics 101: Your Guide to Sales Metrics That Matter
By Maddy Osman on Mar 12, 2019
Over the last decade, technology has changed the way we work. More specifically, it’s lead to the gradual rise of the data-driven workplace.
We now have the means to collect and report on ever more detailed efforts with numbers. This makes results more tangible and accountability more, well, accountable.
What does that translate to for those in sales?
For starters, salespeople are better capable of tying their prospecting activities to closed deals. They can use formulas to more thoughtfully guide how much of X and Y needs to be done in order to achieve Z. They can work more efficiently.
In theory, all of the above should be true if you’re focusing on the right metrics.
But when that treasure trove of data is opened, many companies have a hard time determining what’s worth measuring against. They end up either tracking everything or not tracking enough. And more importantly, they track for the sake of doing it, without really knowing how to turn numbers into action. The latter ends up working against team efficiency, rather than for it.
With all this in mind, let’s first consider some common sales metrics that don’t matter before diving into the ones that do.
Vanity Metrics: The Sales Metrics That Don’t Matter
Early on in my career, I worked in sales at Groupon. To say I learned a lot in my time there would be an understatement — both in terms of what helped and hindered me in the position.
One thing in particular that always stuck with me was how much Groupon pushed talk time as a measurement of success while I was there. Basing efforts on the amount of time spent on the phone is garbage.
When salespeople were focused on hitting arbitrary numbers so as not to be scolded by their managers, time wasted went through the roof. For example, some people would end up calling movie theaters to get their talk time up by listening to recordings of showing times.
Alternatively, people would feel the need to stay on the line even after they knew a deal was closed (I can personally attest to this). Sales could be made in a matter of minutes but when literally on the clock, there was more value in keeping that new customer on the phone (and ultimately wasting their time) rather than moving on to the next one.
Metrics like these fall in line with things like total pipeline value, number of emails sent, and monthly revenue per customer.
They’re vanity metrics.
They look good on paper but fail to offer insight on how an individual can replicate their efforts to achieve similar results.
The Ultimate Sales Metric Stack
It’s easy to get wrapped up in vanity metrics, like those mentioned above, especially when the numbers end up looking much more impressive than those you should
But they’re only impressive in the short term. They don’t take a look at the big picture, or reflect accurately on which actions are really making an impact in the overall sales process.
These are the sales metrics that matter.
Number of Touches Made Per Lead
Sure, you could try to blanket as many businesses as possible with a pitch. Are they the right businesses, though?
Just as there are leads to disqualify early on in the sales process, there are companies that should never become leads in the first place. If you’re selling for the sake of not just gaining a customer but keeping a customer, the research you do upfront on who that ideal sale is matters.
This then factors into how you measure the number of touches and contacts made. Instead of simply looking at the total number on an individual level, consider measuring how many touches were made per lead. Set up drip campaigns for the sake of productivity and focus on improving your nurturing efforts against those that have already shown interest, rather than trying to get in front of as many new prospects as possible.
Discoveries Conducted and Win/Loss Ratio
The number of discoveries you’re doing reflects positively on your ability to move a prospect from awareness of what you’re selling to interest in buying. As you start to track this data point, alongside those like number of contacts and touches per lead, you can begin to set individual benchmarks. Ask yourself, on average, how many of each do you need to achieve a sale?
In conjunction with the number of discoveries, you’ll then want to calculate your win/loss ratio. It’s one thing to be booking a ton of meetings, but if you’re ultimately not closing on any of them, it doesn’t matter. In fact, you may be subconsciously ruining deals with your approach.
You don’t have to send an email into the prospect abyss and hope for the best. Instead, analyze email analytics to see what works and what needs improvement.
Cirrus Insight’s Flight Plans feature provide reporting metrics on how potential customers engage with the emails you send. It tracks things like opens and click-through rates to better guide your outreach strategy.
Are there trends in subject lines that lead to more opens? Do certain email templates perform better than others? Use these types of engagement metrics to make better use of your time by focusing on tactics that actually move the needle in your favor.
Proposals Sent and Viewed
Similar to discoveries conducted, the number of proposals sent means you’re achieving a certain level of consideration for what you’re selling. But it’s only as good as the number of deals that result on account of them.
If you’re sending proposals but struggling to get them accepted, detailed document analytics can help you gauge where your sales process is breaking down. Knowing things like total time spent in a document, the date it was opened, who it was forwarded to, and completion gives insight into both the seriousness of a prospect’s interest and effectiveness of proposals sent.
Ultimately, all of the metrics above lead up to your number of contracts closed. That’s the end game after all — making the sale.
However, in order to improve and anticipate this number requires strategy, not luck. You need to incorporate all other sales metrics mentioned earlier to better your approach and focus your time on what makes the most difference.
A contract closed is a great snapshot view in the moment of success. However, when looking at the bigger picture, the churn rate indicates both the quality of customer and post-sales process effectiveness.
Customer lifetime value (CLV) is another way to think about this metric. It takes into account the net profit associated with a customer based on their lifetime value to the company. Naturally, the less time a customer spends on board, the less valuable they are.
How to Track Sales Metrics That Matter
For sales managers building out processes and tracking against goals, tracking sales metrics that matter for each individual salesperson can prove daunting. Especially when you’re also factoring in relevant team-based metrics like percentage of quota attainment and total revenue.
Just like anything else in business, success with a tactic is ultimately about having a system in place. Build a team dashboard in Cirrus or set one up with integrated data in Salesforce. If you prefer a more analog method, spreadsheets are another tried and true method, so long as you’re diligent about regular updates.
Keep these sales metrics top-of-mind across your sales reps to help in guiding discussions around performance on both an individual and team level. Data is only valuable when it’s actually being used, not just documented.
Final Thoughts: Sales Metrics That Matter Most
Every sales team is bound to organize themselves differently around a chosen set of tools and performance metrics. However, the sales metrics that matter most remain fairly consistent, regardless of your process.
At the end of the day, data should help you in answering those “why” questions. It should give context and guide purposeful action, highlighting trends and making a team more efficient over time.
Dig deeper into your own sales prospecting efforts. Start gathering insights from Cirrus’ powerful toolbox of solutions with a 14-day free trial!