In the dynamic world of sales, where every decision can make or break a deal, harnessing the power of data is critical. As a sales leader or sales manager, your ability to navigate the complex terrain of market trends, team performance, and individual contributions hinges on a crucial tool—sales metrics.
Recently, Michelle Richardson, Vice President of Sales Performance Research at The Brooks Group, spoke with Alice Heiman, Chief Sales Energizer and host of the Sales Talk for CEOs podcast, about the pivotal role of sales metrics.
This blog post recaps their conversation, exploring why metrics are indispensable for effective management and how they serve as the guide toward strategic success.
View the on-demand webinar: Metrics that Drive Sales Revenue: How to Focus on What Matters
Moving Beyond KPIs: Your Compass for Sales Excellence
The power of sales metrics lies in the transformative impact data has on decision-making. In a landscape where intuition must be complemented by concrete evidence, sales metrics empower managers to make informed choices.
“The buyer is changing faster than we are as sellers. We need to catch up,” said Alice Heiman. “Measuring the right things and using that data to coach and manage is the way we will catch up.”
Beyond the traditional key sales performance indicators (KPIs), such as revenue and conversion rates, lies a treasure trove of data waiting to be unlocked.
By understanding what works and what needs improvement, you gain the ability to optimize strategies, allocate resources efficiently, and nurture a culture of continuous improvement within your sales team.
Whether you’re a seasoned sales manager seeking to fine-tune your approach or a rising sales leader eager to grasp the essentials, this exploration of sales metrics promises to be your compass in the pursuit of sales excellence.
Why Metrics Matter to Sales Performance
A recent study by Sales Management Association and Ascent Cloud found that 81% of sales organizations effectively measure revenue-related metrics. However, less than 50% effectively measure other metrics beyond revenue and sales activity—things such as customer retention, customer engagement, and customer satisfaction.
This is concerning because sales revenue is a lagging indicator—by the time you know that number, it’s too late to make any changes.
“High-performing organizations effectively track a wider range of sales metrics. Effective measurement correlates with higher performance,” said Alice Heiman.
Many organizations aren’t sure what to measure, how frequently to measure, or how to use the data once they do track it. The key point is to find the balance between measuring too little (only revenue-related metrics) and measuring too much.
Defining Lagging vs. Leading Indicators
It’s important to measure both lagging and leading indicators to get a holistic view of performance.
Lagging indicators measure past performance. These include metrics such as revenue, average sales amount, average deal size, and length of sales cycle. They’re typically reviewed at the end of the month, quarter, or year.
Leading indicators help forecast future performance. These include metrics such as pipeline, number of calls made, and number of emails sent. They are reviewed much more frequently, as close to real time as possible, so that you can make adjustments based on the data.
For example, a leading indicator can be the number of emails sent per day. Say you know when you send 50 emails a day you get five responses, and three of those turn into a conversation.
At the end of the day, if you haven’t sent 50, you’re not going to be able to have the number of conversations that you need to have. You’ve got to make those up the next day, otherwise you will be behind at the end of the week.
The sales manager can use that information in the moment versus at the end of a quarter, when it’s too late to make up the difference.
Be Careful What You Measure
But first, a caveat on metrics such as number of calls and emails sent. Tracking these may not be as significant. Some organizations punish sellers for not meeting email quotas and phone call quotas, even when they’re getting results. The goal is to measure quality over quantity.
“I really want people to stop sending high volumes of emails and making high volumes of calls. What I want is to go from huge quantity to intense quality,” said Alice Heiman. “We really have to be careful of what we measure.”
Take the example of two very seasoned appointment setters, equal in talent in many ways and compensated the same as well.
Both of them were to call on a lead list that was from a trade show. One of them blew it out of the water, made more calls than anybody ever in the history of that company. Wow!
The other rep did not make anywhere near as many calls. But guess what he did? He talked to customers and booked appointments. He made fewer calls, but actually got appointments.
The best strategy is to focus on your ideal customer profile (ICP), using intent data that tells us those people are ready to buy. Send fewer emails of higher quality with an account based approach where you’ve very carefully decided which companies you’re going after and which people at those companies.
Deliver messaging directed to them specifically, at a cadence that makes sense versus just sending volumes of email. Call about the same topics that were in the emails, and leave very high quality voicemails that relate back to those emails so people start to understand your story and remember it.
A top performing seller at a client of The Brooks Group said, ‘I don’t think about the number of calls I’m supposed to make. I think about quality conversations. If I have good conversations and can qualify that opportunity, the number of calls takes care of itself. I hit my goal.’
6 Sales Performance Metrics to Measure
Sales Metric #1: Conversation Quality
When prospecting, measure the quality of conversations, not just the number of calls made. Getting people on the phone who don’t need or want what you have is a waste of everyone’s time.
Focus on your ideal customer profile. Use high quality messaging that matters. Show each individual you reach out to that you know them, what a day in their life is like, what their problems are. Convey that you have solutions for those challenges.
“Measuring conversations is so much more important than anything else we can measure, because in the end, that’s what a salesperson needs to close a deal,” said Michelle Richardson.
Sales Metric #2: Prospect Engagement
Measuring response from a potential customer is also important. This includes downloads, responses, and clicks. Nurture the prospect and give them more information to get them interested enough so that they want to have a conversation with you.
Measuring how many things you sent, email open rates, or how many clicks versus true engagement, is focusing on the wrong things. Look at how many people click through, how many times they click through, if they forwarded it, and if they actually read the entire document or a part of it.
It’s good to see the number of followers on your social media grow. But are they engaging with you? Are they commenting? Are they clicking like? You have to dig a little deeper to see whether people are responding and engaging
Sales Metric #3: Demo Quality
If you’re a SaaS company, you must measure product demos. If you know you need 10 demos a week to make one sale then you better do 10 demos a week, but they must be great demos with the right people in the room.
Sales Metric #4: Quotes and Proposals
Track where in the sales process you send quotes and/or proposals. These are time intensive, so you need to make sure you’re not sending them too early in the buyer’s journey. Figure out the right time, then measure how many are going out, and then measure the conversion rate weekly so that you can make adjustments.
For example if you sent out 50 proposals last week, and heard back from none of them, you can dive in and figure out exactly what the gap is. Think about the behavior you want to influence in your sellers and assign your metrics that way. Think about quality over quantity.
Don’t just drive the number of calls, number of proposals, number of demos, but the actual quality of the outcome from those attempts.
Sales Metric #5: Time On Task
One other metric is to track time on task. For one week, ask sellers to track their activity. At the top of the hour, have them write down what they plan to do and at the bottom of the hour, write down whether they did it or not and how long it took.
Then you calculate time on task to see how many calls, how many meetings, how long it took to enter everything to the CRM, and what else used up time that day. That will help start to benchmark seller activity.
Sales Metric #6: Conversions
The whole point of doing any of this work is to convert something into a marketing qualified lead, sales qualified lead, or a deal. You need to move prospects along the buyer journey.
Demos need to lead to conversions.
If conversion rates are low, there may be weaknesses in your process or sales training needed. Because leading indicators are measured on a daily or weekly basis, you can make adjustments. You can use the data properly to know where the gaps are.
Are you getting results? Go back and look at the ICP. Are we really calling the right people? Is there a process breakdown? Or does this person need more skills?
Look deeper and see what the salespeople need. Enable them to do what you’re asking them to do.
Defining High-Quality Sales Conversations
Rating the quality of conversations is difficult. First, you have to define what quality is. Ask your salespeople what makes a quality conversation. What happens in a conversation where the person who can buy from you says, ‘Let’s move forward’?
A quality conversation is when the buyer and the seller ask great questions. For a business-to-business complex sale, keywords like ‘price’ and ‘objections’ are the wrong things to focus on. Listen for collaboration, good questions, and good answers. If the buyer is asking a lot of questions, that’s a sure sign that things are moving forward.
Know what good looks like, write it out, and agree on it. Have sellers listen to each other with a checklist to diagnose the quality.
You may learn that your sellers need to be retrained because they might have been trained to talk about price and objections, and they might have been trained in the old BAND (budget, authority, need, and timing). That is so 1980.
As a sales leader, you’re responsible for listening to these calls, coaching, knowing what good looks like, and developing your team. Today we need to think about how the buyer wants to buy, what signals they give us when they’re interested, and set up our metrics around that.
Making Data-Driven Decisions
So now you have the metrics. How do you use them?
You want to drive behavior change. Look for data that helps drive behavior, that gets results.
What if your salespeople had five conversations a day with someone who could buy from them, times five? That’s 25 conversations a week.
Most salespeople aren’t having one conversation a day with someone who can buy from them. Their days are filled with working on deals that are in their pipeline and moving them forward, administrative tasks, dialing, and emailing.
But are they really having great conversations every day?
Whatever that number is, increase it. If it’s one and you go to two that’s double. Imagine how your results will increase. The results will be exponential. Stop and think: what behaviors are we driving to get conversations?
Once your sellers are meeting their conversation goals, coach to move the deals forward and to close. Once they’ve done that, coach to have flawless onboarding, and customers who are successful using what you sold them.
5 Next Steps
- Identify current metrics. Are they leading or lagging?
- Decide what metrics you should remove or add.
- Set up a regular sales coaching cadence.
- Take action to resolve the weaknesses and pain points.
- Slow down to speed up.
Sales metrics are the heartbeat of a thriving sales organization, offering a comprehensive view of performance at every level. From tracking the overall health of your sales pipeline to scrutinizing the effectiveness of individual team members, these metrics provide invaluable insights that transcend mere numbers.
View the on-demand webinar: Metrics that Drive Sales Revenue: How to Focus on What Matters
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