When companies start to focus on the right sales KPIs, they see a huge uptick in pipeline creation and sales productivity.
How do I know?
Because metrics-driven sales organizations know where they are going and what to look at to make sure they effectively reach their goals. They hone in on 3-7 mission-critical gauges and intently focus on what those metrics tell them.
I look at it like a long road trip. It’s no longer good enough to look in the rearview mirror once a month or once a quarter to see where you’ve been. You have to pay attention to those 3-7 gauges along the journey. When you look at the right landmarks, you’re much more likely to arrive at your destination safely and on schedule!
Sticking with the car analogy, here are the seven things you should watch for as you drive toward sales excellence, along with the metrics you may want to consider.
6 Types of Sales Metrics that Drive Performance
1. ROADMAP: Road to sales wins.
What goals are you trying to achieve each day, each week and each month?
The first step is to determine where you want your sales to go. Because sales performance is critical to the overall health of a business, your financial plan should outline clear sales revenue targets for each month, quarter and overall goals.
Like a roadmap for a trip, these landmarks will help you stay on track and indicate how quickly you are driving toward your ultimate destination: More sales wins.
Sales metrics to track: Overall revenue, revenue projections, monthly revenue target
2. FUEL TANK: Size of team and its output.
Sales is simple (but that doesn’t make it easy). You invest dollars into your sales team so the business continues to make money, just like you buy gasoline to propel your car toward your destination.
That being said, the size of your team and how you compensate are critical to determine your fuel tank size and the time it will take you to hit your revenue targets. This is one of the most complex aspects of sales management.
Sales metrics to track: Opportunity pipeline (individual and team)
3. SPEEDOMETER: Sales velocity.
This may appear to resemble a simple equation: Divide the time it took you to get to your destination by the distance you traveled. And if you want a quick view on how sales is doing, measuring sales speed/velocity in this way is great, especially when you start looking at the speed of each rep’s performance in relation to one another.
But, don’t always keep this one simple. Because we are looking to maximize performance, we also need to consider key variables that allow sales to cover the most ground, while reducing travel time.
Sales metrics to track: Number of lead status changes and opportunity stage changes over time
4. RPMs: Revolutions through key sales activities.
Most people don’t look at their car’s RPMs daily to make sure they stay within a healthy range – not unless they are in the Formula One circuit. We do know that the revolutions by the engine are critical to the car’s performance, and we should be looking at sales the same way. So take a look at your sales cycle to make sure it’s within a healthy range and keeping the sales engine going strong.
Sales metrics to track: Sales activities (phone calls, appointments scheduled, completed meetings, etc.)
5. ODOMETER: Day-to-day & week-to-week progress.
Tracking day-to-day and week-to-week progress may be the single most important sales metric when considering whether or not you will reach your destination (your sales target!).
If you use Salesforce, this can be tracked and measured using the Lead Status or Opportunity Stage fields. For instance, if you want to quickly see how far your opportunities are getting in your sales pipeline, track how many stage changes you are making each day, each week, each month. If sales reps aren’t updating the opportunity stage, you probably aren’t getting good traction and problems are likely.
Sales metrics to track: Volume of lead status and opportunity stage changes
6. WARNING SIGNALS: Pacing toward sales goals.
When you’re low on fuel or when your car is overheating, you almost always see a light or sign on the dashboard. In both examples, if something isn’t done quickly, the outcome can be an inconvenience at best. Likewise, your sales team should have warning signals around KPIs that tell both sales reps and sales management, that if you don’t change something, you will not be making it to your destination.
And remember: Even with the best gauges and best fuel, underlying issues will come up. When they do, don’t panic. Step back, get under the hood and determine what went wrong and how you can fix it.
Sales metrics to track: Stalled opportunities/leads, minimum sales activity, minimum pipeline volume alerts and month over month/year over year comparisons