15 Sales Metrics You Should Measure For Better Sales Performance

Once you’ve set up your sales process and assembled a team of highly competent sales professionals, all that’s left to do is make sales. But as your business grows, refining and continuously improving your sales process can mean the difference between keeping pace with competitors and falling behind.

The best way to objectively make data-driven adjustments to your sales procedures is to continuously measure your sales metrics. But exactly which metrics should you measure for the best effect? To answer this question, we have prepared a guide explaining the top 15 sales metrics businesses need to measure to improve sales performance.

Why Is It Important To Track Sales Metrics?

Sales metrics are data points that represent a company’s, sales department’s, or sales representative’s performance. They answer the fundamental question of “How are we doing?”

By measuring this data, sales leaders can objectively determine if the company is on track to meeting its goals. They can use this data to project future sales, and, if tracked metrics are off, they can adjust strategies, as needed. That means the most important metrics are the company’s key performance indicators, or KPIs.

Now it’s time to take a closer look at how sales metric analytics can improve business operations on a company-wide, team-wide, and individual sales rep level.

Company-Wide Level

Sales is the beating heart of a company – without sales to provide revenue and cash flow, all of your business operations would quickly grind to a halt as products stop moving and as you become unable to pay employees. 

That’s why leaders and key decision-makers of any company are eager to hear about the sales department’s performance. With information about how many sales have been made and how much revenue the company can expect in the next quarter, leaders of all other company departments can smartly allocate resources, adjust production, hire more people, and make financial plans to reach the next sales goal while making the best use of revenue generated by the sales team.

Sales Team Level

For the sales team, sales metrics provide insight into how close the team is to achieving its goals, how effective the sales process is, and where there might be areas for improvement in the overall sales strategy.

In particular, sales leaders often set sales quotas for the team, representing a targeted amount of sales or revenue desired for a single sales period.

With information about what plays, scripts, and methodologies are most effective, managers can adjust the company’s overall sales strategy to hone in on the best activities and practices to implement for everyone, raising the team’s overall sales performance in the long run.

Individual Rep Level

With the help of modern sales performance technology, a sales manager can easily track individual sales rep performance, such as the number of leads processed, how much time is spent on each sales activity, and sales conversion rates.

With this information, managers can hold sales reps accountable for their work, determine each salesperson’s strengths and weaknesses, develop appropriate and actionable training programs, and create effective incentive and rewards systems to encourage reps to reach individual goals.

Of course, certain sales metrics/measurements will only be useful for one function or another. That’s why measuring a healthy balance of sales KPIs for all three  levels–companywide, sales team, and individual sales reps, is important to improve your business on all levels. 

To give your company the best chance to make substantive improvement, let’s look at five crucial KPIs for each of the levels mentioned above. 

 5 Sales Metrics For The Company

To start, our first category of sales KPIs are on the company-wide level. These are the ones that higher-ups, decision-makers, and other company managers and leaders will want to know. 

1. Total Revenue

The king of all sales metrics is the dollar amount of total revenue earned by your sales department’s operations and sales activities. This can also be called gross sales or turnover and is usually tracked per month, quarter, sales period, or year. 

Using the dollar amount of total sales revenue, your company’s decision-makers can determine the company’s financial health and success, plan investments and resources for the future, and adjust the business’s overall strategies to raise the revenue amount even higher.

Here’s how to calculate total revenue:

Total Revenue = Quantity of products and services sold Price of each product or service

If your company operates with longer contracts or subscription-based services, you could also break down total revenue into annual recurring revenue or monthly recurring revenue, which is the value of a contract per individual year or month respectively.

In a numerical representation, here’s how to calculate annual recurring revenue (ARR) or monthly recurring revenue (MRR):

ARR = total value of a contract / number of contract years

MRR = total value of a contract / number of contract months

2. Revenue By Product or Service

Which product or service is the most profitable, and which is the least profitable? This is crucial information decision-makers want to know to decide which product segments to keep or cut.

The formula for this metric is the same as the one for total revenue, adjusted for each unique product:

Product or service revenue = Quantity of each product or service sold x Price of each product or service

3. Year-Over-Year Growth

Beyond measuring the money you made each year, it’s important to put your total revenue into context by comparing it to the revenue you made in previous years. To that end, calculating your year-over-year (YoY) growth enables leaders to determine if the company is growing, stagnating, or shrinking. 

This is especially important to measure so that your company is able to keep up with inflation rates. Why? Because if your total revenue amount is the same between two years, but inflation has risen drastically, that means your company is actually losing money!

Here’s how to calculate your YoY growth percentage:

YoY Growth = ((Current year revenue – Previous year revenue) / Previous year revenue) × 100

4. Market Penetration

How is your business doing compared to competitors and considering total market potential? Since there are only a limited number of customers in each target market, ideally, you’ll want the biggest slice of the pie, compared to your competitors. 

That’s why it’s important to calculate your market penetration percentage, which tells leaders how much of the market the company has captured. Knowing this allows them to develop strategies to increase your company’s market share.

Here’s how to calculate your market penetration rate:

Market Penetration Rate=Number of customersTotal market size100

5. Percentage of Revenue From New and Existing Customers

Your company revenue can further be broken down into segments based on how much comes from new customer acquisition and how much comes from existing customers. Which segment you must focus marketing and sales efforts on depends on your company’s current maturity stage and business strategy. 

If you’re an up-and-coming business, you’ll want an increased amount of revenue from new customers as you capture more and more customers from your target audience. 

To calculate the percentage of revenue from new business, use this equation:

Percentage of Revenue from New Business=Revenue from new customersTotal revenue100

However, if you’re a mature, established company, you may decide to focus on building customer lifetime value (CLV) by reselling, cross-selling, and upselling your existing customers. 

To calculate how much revenue you generate from existing customers, use this equation:

Percentage of Revenue from Existing Business=Revenue from existing customersTotal revenue100

Even for newer businesses, selling to established customers can be quite profitable. According to Invesp, it costs five times more to attract a new customer than it costs to keep an existing one, and existing customers spend 31% more than new customers. In other words, selling to previous customers brings in more revenue at a lower cost.

Additionally, a low percentage of revenue from existing customers could signify an issue with customer satisfaction, since satisfied customers are usually happy to shop from the same place for repeated purchases.

5 Sales Metrics For The Sales Team

Our next category of sales productivity metrics are KPIs that measure your sales team’s overall performance and reflect the effectiveness of your sales processes. These are the metrics that matter the most for a sales manager.

1. Sales Quota Attainment

For most companies, executive decision-makers and sales leaders work together to set sales quotas. A sales quota is a numerical goal for how many sales the company must achieve in a given time period in order to meet its break-even point, or to grow according to strategic plans. Sales quotas are often set as either a volume amount or a revenue amount. 

Sales managers and sales representatives alike will be eager to know how close the sales team is to achieving the quota for each period, so this metric is best utilized when updated live.

To calculate sales quota attainment, use this formula:

Sales Quota Attainment=Number of closed deals or revenue in a given time periodQuota for that time period

2. Win Rate

Your sales reps might be working hard to nurture and close the new sales leads, prospects, and opportunities that your marketing team brings in. But exactly how fruitful are their efforts? What is the “win rate” of the sales team?

A sales manager can determine this by measuring the percentage of deals won out of the total number of sales opportunities. This is called your sales team’s sales conversion rate.

While it’s true that not every lead that your business comes into contact with will turn into a customer, it’s important for sales teams to know how much of this loss is natural, versus how much is due to sales process inefficiencies that can be improved upon.

The average conversion rate across all industries is approximately 2.9%, according to Ruler Analytics, with variances here and there depending on the specific industry. 

To calculate how your business measures up, use the following formula to determine your win rate:

Win Rate=Number of won opportunitiesTotal number of opportunities100

3. Conversion Rate By Funnel Stage

Your sales funnel is a framework representing the step-by-step process a salesperson takes to turn a sales lead into a paying customer, as well as how many qualified leads are present at each stage of the sales pipeline. As leads drop out or are disqualified along the way, there are fewer and fewer leads per stage, and that is why the process is referred to as a  “sales funnel.”

However, while it’s natural for leads to be dropped gradually, a sudden loss of leads at a certain funnel stage could signify massive problems, roadblocks, or bottlenecks in your sales operations. To identify these issues, sales managers must pay attention to exactly how many leads make it from one stage of the sales funnel to the next. This measurement is called the sales funnel stage conversion rate.

To calculate your conversion rate per sales funnel stage, use this formula:

Conversion Rate By Funnel Stage Percentage=Number of leads converted to the next stageNumber of leads in the previous stage100

4. Sales Cycle Length

Beyond whether or not a sales lead is converted, another important measure of your sales team’s effectiveness is how long it takes to convert a lead into a customer. In other words, your average sales cycle length.

Generally, your average sales cycle length will depend on the product you sell, your industry, and who you’re selling to. For example, selling a chocolate bar to a repeating customer will go by much faster than convincing a new customer to invest in a thousand industrial corn shuckers.

However, a large determinant of the length of the sales cycle is the acumen of your sales team – whether they have the necessary skills, scripts, and sales enablement material they need to close a sale quickly and efficiently. 

Thus, if your sales cycle length is longer compared to that of your competitors, it could be a sign that your sales department needs to invest in more training, coaching, or sales support materials for your sales reps.

5. Average Deal Size

If your company sells several products at different prices, or your sales reps are allowed to exert influence on the final price of a sales deal, then it’s important for a sales manager to know the average dollar amount of each deal.

For example, though your team might be making an incredible number of sales by volume, they might be selling a large amount of low-margin products, or giving steep discounts in order to close more deals. 

That’s why it’s important to measure the average selling price and deal size to determine the true profit of each sale on average. Ideally, your reps should be closing a good balance of high-value deals alongside some smaller ones.

Here’s how to calculate average deal size:

Average Deal Size=Total dollar revenue of closed deals over a specific time periodTotal number of deals in that time period

5 Sales Metrics For Individual Sales Reps

Our final class of sales performance metrics is metrics reflecting the performance of each individual sales representative. These are also called sales activity metrics because they track each salesperson’s activities during the course of their workday and for the sales period.

1. Percent of Time Spent on Selling Activities

According to Forbes, the average sales rep spends only 35.2% of their time selling. The rest of their time is spent on administrative tasks such as product issues, internal policies and approvals, meeting preparation, and research. 

In other words, if your company can cut down on the red tape reps need to get through to do their job, they can spend more time out in the field bringing in more deals for your business.

Therefore, to determine how much time your reps are spending on administrative tasks,  it will help to track selling activities such as the ones included below:

• Researching leads
• Networking
• Making referral requests
• Making cold calls
• Sending cold emails
• Giving product demonstrations
• Scheduling meetings
• Sending contracts
• Closing deals

While these sales metrics might be a bit difficult to track and calculate by hand, sales performance management software such as a CRM system or other time tracking tools can help you conclusively determine how much time your sales reps are spending on these activities.

The alternative to this metric is the percentage of time spent on manual data entry. If you find that your salespeople are spending too much time punching numbers, sales automation software tools can help you automatically complete repetitive tasks so that your reps can get back to selling.

2. Average Lead Response Time

Our next two sales performance metrics correlate to the two ways through which a business can obtain new sales leads – inbound lead generation where leads contact a business first and outbound lead generation where salespeople make first contact with the lead.

For the company’s inbound lead generation sales funnel and strategies, you need to know how long it takes each rep to respond to a potential customer’s outreach. 

According to InsideSales, you have a chance to make sales increase eightfold if you respond to leads within the first 5 minutes after contact. In other words, if you improve upon each rep’s average lead response time, your company will make more sales.

3. Number of Outreaches

On the other hand, for businesses that employ account-based marketing tactics and more personalized communications in a B2B capacity, salespeople might engage more in outbound lead generation tactics by taking the initiative to research and contact leads first.

In that case, a better measure of your reps’ sales performance would be the number of outreach activities they complete, such as the number of conversations they initiate through phone calls, emails, and social media messages.

On top of the number of outreaches, you may also want to track the average amount of time each conversation lasts. This will give you insight into processes each rep uses in sales prospecting, enabling you to see how skilled they are at identifying and qualifying potential leads.

4. Percentage of Sales Enablement Materials Used

Your sales department might have invested in marketing collateral or sales enablement material such as brochures, flyers, e-books, white papers, infographics, and presentations to give potential sales leads the help they need to make a purchase.

By providing rich media and valuable statistics, your sales representatives can make the sales journey more appealing for potential customers and improve their chances of making a sale. 

For this reason, managers should track how much of the provided sales enablement materials each rep uses per sale, ensuring that each potential customer receives the most tempting sales pitch possible.

Of course, sales leaders should also work to provide sales enablement materials that are enticing to customers. According to RAIN Group, when asked what content influenced them to accept a meeting or connect with a sales rep, buyers responded that the content most appealing to them was primary research data relevant to their business (69%), descriptions of the provider’s capabilities (67%), and content customized to their specific situation (67%).

5. Number of Sales Tools Used Daily

Finally, if your company uses a wide variety of software tools to help with every stage of the sales pipeline, tracking how many times an employee logs in and uses each of these tools could be a great way to track sales productivity.

For example, your company might use an email campaign management tool to reach out to leads en masse; sales prospecting tools to network with key target accounts and source high-quality leads; a CRM to track each lead’s progress through the sales funnel, and a help desk software tool to consolidate and answer customer service tickets.

Tracking how many times an employee logs in and uses each of these tools could be a great way to track their productivity and effectiveness, as applied to each aspect of the sales journey.

On the other hand, if you notice that a tool isn’t getting as much use as the other tools, or is showing lower returns, this could be a sign that a rep needs more training on how to leverage the software effectively to improve sales performance.