Sales metrics: when, how, and why to track them

Understanding which metrics to track — and when to track them — is often a confusing, albeit essential, part of measuring a sales team’s performance and progress. Your team captures myriad data points throughout the sales process, and it can be overwhelming to determine which ones are most valuable to assess.

By identifying and tracking the right metrics, your sales team can tell the right story, maintain visibility into operations and performance, uncover and resolve issues, and replicate wins. Whether you’re looking to enhance individual rep performance, team performance, customer satisfaction, or something else entirely, it’s crucial to know the breadth of metrics at your disposal. Then, you can focus on tracking, analyzing, and improving the right metrics to drive further growth and profitability.

Here, we’ll take a deep dive into the importance of sales metrics, the most essential metrics to track, and how the right templates and dashboards can make the process more seamless.What Are Sales Metrics?

• Sales Metrics vs Sales KPIs
• The Most Important Sales Metrics
• Sales Activity Metrics
• Sales Pipeline Metrics
• Sales Lead Generation Metrics
• Sales Productivity Metrics
• Sales KPIs
• Leading and Lagging Indicators in Sales
• Sales Metrics by Team
• Sales KPI Templates and Dashboards

What Are Sales Metrics?

Before we get into the nitty-gritty of all things sales merics, let’s first gain a comprehensive understanding of what they actually are and how they benefit your team. Sales metrics are groups of quantifiable data that demonstrate the status of a particular process.

In today’s data-driven sales world, organizations must rely on consistent, accurate metrics to analyze and improve their progress and performance. Without the right metrics, sales teams waste time, resources, and revenue on processes that don’t contribute to their success. Plus, they lack the intimate, real-time knowledge needed to spot and avoid risks early on in their deal cycles.

Metrics act as significant indicators of a sales team’s health and overall effectiveness; so using them properly can help boost rep productivity, efficiency, and execution. They can shed light into the parts of your sales process that should be adjusted, eliminated, or repeated, which ensures your ability to maintain a competitive edge.

It’s important to note that sales metrics are only truly valuable if your team is consistently collecting high-quality data. This is challenging (if not impossible) if your team still uses outdated, manual data collection methods, like spreadsheets or disparate tools.

To get the most out of your data, you need intelligent sales analytics software that transforms your metrics into actionable insights. Powerful sales engagement platforms, for example, equip your team with real-time metrics and intuitive dashboards that increase visibility across the entire sales process.

With tools that centralize and standardize all your key data in a single place, reps save the time otherwise spent on manual data entry. Sales teams always have a comprehensive, up-to-date understanding of the end-to-end sales process, so they’re empowered to make data-driven decisions that improve their outcomes.

Sales Metrics vs Sales KPIs

While the terms “sales metrics” and “sales key performance indicators (KPIs)” are sometimes used interchangeably, there are actually some key distinctions between the two. Sales metrics can simply refer to data that measure a specific part of your process; but sales KPIs require a particular target or objective against which they’re measured.

While metrics come in a wide array of value to your organization, KPIs are always valuable because they’re intentionally set with a goal, timeline, and business outcome in mind. For example, your team might track the number of emails opened by prospects as part of their sales process. But adjusting their strategy and establishing outcomes that are tied to broader initiatives around that number is likely a fruitless endeavor—so ‘opened emails’ probably isn’t worthy of KPI status. 

Your team might otherwise find great value in measuring the buyers’ intent behind opening those emails, which would further illuminate the effectiveness of their messaging. In this case, buyer sentiment, a feature of Outreach Engage, might be the more relevant KPI, as it more thoroughly assesses and classifies specific responses into several categories, like:

• Positive
• Objection
• Referral
• Unsubscribe
• Other

Intelligent sales engagement tools make it easy to turn your vanity metrics — like clicks, open, and reply rates — into actionable KPIs that improve outcomes. They use buyer sentiment analysis to help sales teams identify buyer intent, tweak their engagement strategy based on real-time data, and drive better results than metrics alone.

The Most Important Sales Metrics

The sales metrics that will provide the most value to your organization will differ depending on a variety of factors, including your goals, use case, team structure, and more. Once you hammer down these details, you should choose the metrics that help illustrate the story you’re looking to tell or investigate.

Below, we’ve compiled a thorough list of the metrics that are most important to modern sales teams, and categorized them into several relevant buckets:

Sales Activity Metrics

Sales activity metrics reflect the progress of your team’s behavior. They’re vital for understanding how individual efforts contribute to the team’s overall success.

• Number of Leads Created
• Number of Emails Sent
• Number of Calls Made
• Number of Follow Ups
• Number of Meetings Scheduled

Sales Pipeline Metrics

Keeping your pipeline as healthy as possible requires a deep understanding of how deals are progressing and any issues that might be holding things up. 

Number of Qualified Leads

Filling your sales pipeline with under-qualified leads won’t do your team much good: In fact, it’ll muddy the waters and negatively impact reps’ close rates. Tracking the number of qualified leads (based on your team’s specific criteria) in your pipeline over a given period of time can help you better optimize your prospecting process.

Win Rate

Deal win rate is calculated by dividing the number of closed, won deals in a particular time period by the number of opportunities created during that same period. It’s a great way to determine how effective your team is at getting deals across the finish line and onboarding new clients.

Average Deal Size

Typically, smaller deals take a shorter amount of time to close than larger, enterprise-level deals, which generally require more decision-makers. Average deal size helps your team fine-tune their sales strategy, target accounts that will likely close in a desired amount of time, and increase pipeline velocity. Calculate average deal size by adding the value of all your closed deals, then dividing it by the total number of deals.

Customer Acquisition Cost

Your customer acquisition cost (CAC) is the amount it costs your sales and marketing teams to land a new client. If your CAC is high, your team can re-evaluate the efficiency of their spend, identify areas of unnecessary spend, and more accurately assess their growth capabilities. CAC is calculated by dividing the sum of your marketing and sales costs by the number of closed deals during a particular period of time.

Average Sales Cycle Length

The length of your sales cycle, or the time it takes for an initial lead to become an actual buying customer, helps teams evaluate the efficiency and effectiveness of their strategy.

Pipeline Coverage

Sales pipeline covers refers to the ratio between the dollar value of your sales funnel and your revenue targets. If, for instance, you have a pipeline coverage ratio of five, it means your total pipeline is five times your quota. Thus, you need to close 20% of the pipeline’s value in order to meet your sales goal.

Deal Slippage

If a deal doesn’t close within the intended or committed timeline, it’s considered “slippage.” Calculate your deal slippage rate by taking the number of deals that failed to close within their committed time period and dividing it by the total number of committed deals for that same period. This information is vital for identifying which deals should be prioritized in the upcoming period.

Sales Lead Generation Metrics

Lead generation metrics help improve sales and marketing alignment to ensure both teams are working toward the same goals.

Cost per Lead

Cost per lead refers to the average amount of money your team spends to acquire a new lead. You can calculate this metric by dividing the amount you’ve spent by the total number of new leads you’ve acquired.

MQL to SQL

You MQL to SQL is the rate at which marketing qualified leads (MQLs) are converted into sales qualified leads (SQLs). This metrics helps sales teams better target their intended audience and is calculated by dividing the total number of SQLs generated by the total number of MQLs generated over a given time period, then multiplying that number by 100.

Conversion Rate

Your team’s conversion rate is the number of qualified leads that result in closed-won deals. By consistently tracking this metric over time, you can better understand how efficiently your team turns new leads into paying customers. Calculate your conversion rate by dividing the number of leads converted into sales by the total number of qualified leads over a specific time period.

Average Lead Response Time

Your average lead response time measures the amount of time between new lead creation and when your team sends an initial response. It’s a metric that’s essential for evaluating lead follow up and determining how that follow up impacts conversion — both on an individual and team level. To calculate lead response time, take the total amount of time between lead creation and initial response (for each lead assigned to a specific rep), and divide that by the number of leads responded to.

Sales Productivity Metrics

It’s crucial to track (and improve!) the efficiency and productivity of your reps. Sales productivity metrics help you understand where your reps are spending the majority of their time so you can reduce any superfluous, time-intensive activities that hinder their success.

Time Spent on Selling Activities

Most reps spend only a third of their time actually selling. By measuring the average time each rep (and your team as a whole) spends on selling activities, you can identify areas in the sales process that hinder their productivity to better maximize their time.

Time Spent on Manual Data Entry

Manual data entry is a productivity-killing task for most sales teams. If your team still relies on manual data collection collections, you’ll likely be surprised at how many hours reps spend entering, transferring, and syncing information throughout the week. Use this metric to determine whether or not automation can add more value to your team’s days.

Average Numbers of Sales Tools Used Daily

If your reps need to toggle between apps and platforms throughout the day to complete their sales tasks, they’re likely wasting precious time. Take stock of the technologies your team relies on and decide if software consolidation would help your reps focus on what they do best: Selling.

Sales KPIs

It’s important to consistently track your sales metrics: But if one metric in particular is clearly driving or hindering performance, it may be time to bump that metric up to a KPI. Here are some valuable sales KPIs to get you started:

Annual Recurring Revenue

Annual recurring revenue (ARR) refers to your organization’s overall predictable revenue across the entire year. It’s essential because it demonstrates your company’s growth and helps you forecast future revenue moving forward. To calculate ARR, simply add up the monthly revenue your team brings in from each customer and multiply that total by 12.

Average Revenue Per User

Your business’s average revenue per user (ARPU) is the mean of revenue from each individual account or customer. It’s typically calculated per month or year, depending on your sales or business model (e.g. if your company offers monthly contracts, calculate ARPU on monthly basis; if you offer only annual contracts, calculate ARPU on a yearly basis). To calculate ARPU, divide your total revenue over a particular time period by your total number of users.

Churn Rate

Your churn rate refers to the percentage of your customers who cancel their recurring subscriptions or jump ship when it’s time to renew. Since boosting your retention rates by just 5% can increase your profits by 25% to 95%, understanding and ameliorating churn is paramount to your company’s success. Calculate your churn rate by dividing the number of customers lost over a specific time period by the total number of customers at the beginning of that period.

Net Promoter Score

Your net promoter score (NPS) helps you measure customer loyalty. To calculate NPS, ask your customers to rate how likely they are to refer your company to someone else, on a scale from one to ten. It’s a great KPI for identifying detractive or passive customers, enabling you to follow up and assess why they’re not promoting your company.

Buyer Sentiment

Buyer sentiment is crucial because it allows your team to measure a buyer’s emotional reaction to an engagement. It can help you shorten your sales cycle, break buyer silence, and indicate where your team should invest its efforts.

Leading and Lagging Indicators in Sales

Sales look to leading and lagging indicators to make predictions and evaluate their results.

• Leading indicators help you predict the results of your team’s performance. They offer insights into where your team is headed while there’s still time to course-correct, if needed. This might include the number of new opportunities created, number of new quotes, or average opportunity size.
• Lagging indicators, on the other hand, are unchangeable and reflect your team’s results. This can include revenue generated, number of closed won opportunities, or quota attainment over a given time period. Sales teams use lagging indicators to adjust their sales plans for better outcomes moving forward.

Sales Metrics by Team

Now that you have a better understanding of the purpose of a variety of metrics and KPIs, let’s outline some common metrics used by each type of sales team.

Field Sales Metrics

Field sales reps primarily operate outside of the traditional office setting. Since they focus largely on meeting clients face-to-face, their performance is usually measured by:

• Number of deals closed (over a given time period)
• Number of calls
• Number of meetings
• Number of emails
• Number of demos

Inside Sales Metrics

Unlike their field sales counterparts, inside sales professionals generally engage prospects via remote methods. Though the process is inside sales reps follow is simpler and more predictable by comparison, their progress is measured using many of the same metrics:

• Number of deals closed (over a given time period)
• Number of calls
• Number of meetings
• Number of emails
• Number of demos

SDR Metrics

Sales development representatives (SDRs) are typically measured against these common metrics:

• Number of meetings
• Number of calls
• Number of demos
• Number of deals closed
• Number of opportunities created

Sales KPI Templates and Dashboards

Tracking, measuring, and analyzing all of your team’s most essential metrics and KPIs can seem like an enormous, time-consuming undertaking — especially if you don’t have the proper tools for support.

Luckily, premade KPI templates and dashboards take a lot of the legwork out of the equation. Platforms like Outreach offer easy-to-use, intuitive dashboards that pull all the activity metrics from your CRM plus additional customer engagement metrics. This gives your team the most comprehensive view into the health of your deals, enabling your team to intervene before it’s too late. The result is a more effective, efficient team that’s backed by the real-time data necessary to improve business outcomes.

Your sales dashboards will vary depending on the tools you use, your specific objectives, and how up-to-date your data is. Here are some examples of KPI dashboards that sales leaders commonly use on the Outreach platform:

Sales Cycle Over Time

With the sales cycle over time metric, leaders can see how their cycle evolves on a month-to-month basis. The dashboard illustrates each sales stage in a different color in the chart. For each month, the chart shows deals that were closed and won within that given month, regardless of when they were created. The stacked bar representing that month shows the average days they spent in each stage.

Weekly Productivity

Using scorecards, managers can more accurately analyze their reps’ productivity by combining and tracking any number of variables from week to week. They can set multiple goals across those different variables and assign a weight to each goal. Once the weight has been set, the platform automatically generates a productivity score; represented here by the red, yellow, and green stoplight scorecard.

Closed Loss Reason

With this metric, sales teams can break down the various lost reasons within their CRM and easily analyze where things are going wrong and what the average value of those deals are. Each closed loss reason is displayed in the table on the right side, keyed by color. For each average, the platform looks at all of your team's closed loss deals within the last 12 months.

Robust Sales Dashboards for Better Outcomes

Your team’s ability to make meaningful, insights-driven improvements that boost performance and support a more predictable revenue cycle relies on the metrics they use and how they use them. Simply capturing massive amounts of data won’t cut it — and neither will measuring and analyzing vanity metrics that don’t provide any real value to your business.

Outreach makes it easy to access comprehensive information about your end-to-end sales process, all in one, single pane of glass. The platform helps sales teams build beautiful, extensive dashboards that offer full transparency into their most valuable data, updated in real-time.

Learn more about how the right KPIs and metrics (and the right tools for support) can help your team hit their targets more predictably, or request a demo today.