There's no more effective tool for driving change than data. Data provides valuable insights to help you make critical decisions regarding your business.
Sales performance metrics are primary indicators of your sales team's success. They help you measure sales reps' performance, identify opportunities for improvement, and highlight skills your team needs to increase close rates. Sales performance metrics are helpful when hiring and training new staff, monitoring team results over time, or evaluating individual employees.
Data should guide salespeople more than anyone else employed in your company. However, your sales reps may be drowning in work and not realizing which sales performance metrics they should pay attention to. A sales performance platform such as Wonderway can help you overcome this challenge.
In this article, we will discuss sales performance metrics, their value for your business, and how Wonderway helps you get all the data you need to improve your sales team’s results.
As employees of your company, sales reps need to know their responsibilities and the goals they need to achieve. The better insight you have into your organization, the easier it will be for you as a sales leader to create a plan that works for everyone from top to bottom.
Sales performance metrics are the indicators of sales performance that help you measure, analyze and improve sales effectiveness. The right set of KPIs can boost your team’s performance, and by comparing these metrics over time, you can determine where you get the greatest return on investment from your sales team and where you miss crucial opportunities to make money.
You can collect the sales performance data manually or automatically with an analytics solution. Each metric has its strengths and weaknesses. For example, revenue is easy to track but doesn’t indicate which skillset a successful sales rep needs to have.
When it comes to the connection between the success of your company and the success of an individual sales rep, it is essential to make a distinction between sales performance metrics and sales productivity metrics.
The main difference between sales performance and productivity metrics is their scope. Sales performance metrics measure performance in more broad terms than sales productivity metrics.
Sales productivity focuses on employees and their effectiveness. It helps you measure how much time sales representatives spend selling, ideally, around 65% of their time. That means they use less of their work time for dealing with non-selling tasks, e.g., administrative tasks, training, travel, etc.
Sales performance metrics deal with performance on a macro level. They show how much revenue you get per customer and help you analyze your yearly growth. You can also measure how much revenue your new vs. existing customers bring you or what is the value of an average contract.
These metrics give you broader insights into the sales performance of your entire company.
Sales metrics help you control your progress. You can use these metrics to detect and fix current issues or make more intelligent decisions in the future. You must also choose the correct data to measure. Let’s explore the main reasons why measuring sales metrics is critical.
Tracking sales metrics can help you determine which parts of the sales process require more time and effort than others and how you can best utilize your sales team’s skill set. It helps you define what the ideal sales process should look like and then train your salespeople accordingly.
One common reason for decreased results is a flawed sales process, and tracking sales performance metrics over time allows you to spot negative patterns. It will enable you to identify weak points in your sales process to improve them.
Similar to identifying bottlenecks, sales performance metrics can help you detect areas to which you should pay more attention as they represent your opportunities for growth and higher revenue.
Sales performance metrics will clearly show you what products or services are selling well or decreasing your revenue. This information can help you change your approach or redefine your offer.
Data can help you identify your best sales reps. By identifying the best workers, you can also detect which skills they have and use that knowledge to design training strategies for new and existing employees.
If you have data that clearly shows what your sales reps need for success, then you can use it to increase the efficiency of your current employees. You can improve the productivity of your existing employees by pointing out the deficiencies in their work process.
Sales performance metrics are essential. However, some matter more than others. Let’s discuss it further.
Not all data is equally valuable; you must choose what to measure to get meaningful insights. Let's explain the most important sales metrics.
Generating leads is essential for gaining new customers. By measuring the number of new leads, you are getting an insight into your sales reps’ efforts. It shows your reach rate and what approach is getting you the most leads, e.g., if you are acquiring new customers through word of mouth or your paid advertising efforts are more efficient.
The average revenue per customer refers to the amount of money a company gets per subscriber, user, or account at a particular time. You calculate it by dividing the total revenue for a specific period by the number of customers. Tracking it is essential because it shows if your services or products hold value. For example, if your average revenue decreases, you probably offer too many discounts to gain new customers.
This metric lets you compare how much revenue your new and existing customers are bringing to you. It lets you know where you should put additional effort. For example, current customers usually spend more; therefore, you should offer specific discounts and rewards to retain them.
Not every lead represents an opportunity, as sometimes leads are not the right people for your company. To determine if you need to change your approach to generating leads, you must track the number of opportunities you get. Perhaps you need to change your sales message, or you must update buyer personas to ensure you're connecting with the right people.
A lead-to-opportunity conversion rate represents the number of new leads converted into sales-qualified opportunities by your sales representatives. Your sales management plan should help you turn leads into paying customers. If the conversion rate is low, you should examine why.
Lifetime value is the revenue you expect throughout the average relationship with a customer. Once a connection has been established, your team would ideally nurture this relationship to keep your customer satisfied and grow the lifetime value over time.
Most SaaS companies don’t push their clients to subscribe immediately. Customers don’t always move from prospects to clients—some want to try your solution first or take time to consider your offer. As a result, measuring the number of completed quotes or demos can help you see how many warm leads your company generates.
It is the most critical sales performance metric for many companies. It shows how many closed deals your sales reps got over a specific period.
Your quote-to-close ratio is the percentage of contacts with prospects that result in a sale. In this case, if your reps provide 40 quotes in a month and 10 of them lead to sales, your quote-to-close ratio is 25%.
This metric can measure the time needed to achieve your sales quota. It helps you with forecasting future revenue.
To achieve their sales targets, every employee on the team must complete their regular tasks. Sales productivity software can keep track of these activities, even when salespeople are out in the field. As a result, sales managers can track activity completion rates in real-time.
A company's ability to forecast how much revenue it will generate from each customer interaction grows with each year of operation. A look at this metric on a quarterly or monthly basis can tell you whether your company's average deal size is growing, decreasing, or remaining the same.
Total revenue gives you an idea of how much money you earned over a specific time. You can keep track of revenue on a monthly recurring basis if you operate a subscription-based business. You can also see which regions generate the most revenue if your company works in different locations.
Your conversion rate—or win rate—shows how many of your leads convert into customers. If you get about 50 leads a month and about ten purchases, your win rate is 20%. Using this metric, you can determine how many leads you must get to meet your revenue objectives.
It's essential to measure growth over any timeframe—but the year-over-year growth metric shows whether a company has achieved its long-term growth goals.
Now that we covered the crucial metrics you need to monitor, let's explore Wonderway, our sales performance software that can help you track sales performance metrics.
Wonderway is our sales training platform that helps you improve the performance of your sales team. Here are the Wonderway features that make it stand out from competitors.
Using machine learning and data to match training with your employees' skills makes Wonderway safer, faster, and more objective than human judgment, which is often biased.
Wonderway helps businesses identify what skills make their top performers successful, then apply that knowledge to training less-accomplished sales reps.
Wonderway provides online sales training for each stage of the sales process. Let's say you want to train your employees to negotiate better; Wonderway has you covered.
Wonderway provides qualitative and quantitative assessments of your employees' knowledge and sales abilities.
Using analytics, you can see the benefits of your investment in Wonderway. It gives you insights into the current ramp time to decrease it. You can also analyze conversion rates, evaluate sales reps' performance, and separate high and low performers.
As your employees should also not be in the dark, with Wonderway, they can assess their performance over time and see how much they improved their sales skills. It can motivate them to sell harder and set new challenges.
This article explained why you should measure sales performance metrics and how they can positively impact your business.
We discussed that tracking sales performance metrics is critical for defining your ideal sales process, identifying bottlenecks, finding new growth opportunities, and knowing what's selling and what isn't. Sales performance metrics also help identify top talent among your sales reps and increase their efficiency. Later, we presented the 15 most important metrics to track in 2022.
We explored Wonderway as an example of a sales performance software that can increase your sales team's efficiency.
Machine learning software like Wonderway uses data to identify which sales skills a particular employee needs to improve. It also determines your top workers and the skill sets they have. By recognizing and highlighting an employee's strongest or weakest points, each employee gets tailored training to become a better sales representative.
In the end, we introduced ATLAS, a Wonderway sales efficiency service that allows you to identify skill gaps among your employees, detect the best workers, cut ramp time, and save sales managers hours of work by automating the training process.
Let’s answer some of the most frequently asked questions regarding sales performance metrics.
The metrics you should measure depend on the industry your company operates in. However, the most critical metrics include
These metrics can help you make better business decisions and increase revenue.
Sales metrics track the sales-related activities of individuals, teams, and organizations over time. Sales KPIs are sales metrics used to measure performance against your business objectives.
You analyze sales performance by choosing the critical metrics you want to follow. You will select them based on your objectives. For example, you will measure the new vs. existing customers' percentage revenue if you're going to see if you need to invest more in acquiring or retaining customers. Wonderway is a sales training platform that automatically analyses sales performance, and you can try it for free.