Today, the average Chief Revenue Officer’s (CRO) tenure is a shocking 16 months, according to Revenue Collective. There are countless factors that lead to this. CROs, and sales leaders alike, often walk into their new role blind. They are handed a pipeline, but with few exceptions, data quality, visibility, and health are all issues. They work tirelessly to assess the funnel quality, sales process adherence, and the overall go-to-market strategy. But, the truth is, time is not on their side. The key is identifying the sales metrics that matter most and getting ahead of pitfalls with actions like managing dashboards correctly.
Some of the Most Common Dashboard Mistakes:
Lack of Trusted Data
CRM systems were never designed for the sales rep. As a result, they are lacking in both quality and quantity of data. If your organization isn’t taking advantage of automated activity capture, you, along with every report that relies on the data within your CRM, are set up to fail.
Focus on Reactive vs Proactive
While dashboards are invaluable for looking back at what went right or wrong in a sales cycle, successful sales leaders use dashboards to be proactive and adapt sales strategies well before it’s too late. Which deals are at risk? What can be saved? Which opportunities are unlike any deal you’ve ever won before? Those are just a few of the questions you want to get ahead of.
Missing Actionable Insights
Dashboards are guides to drive next steps. But in today’s world of fast-paced deals, it’s critical to take action as soon as the insight is identified. Has it been a week since the last inbound email? Did the prospect stall on a specific page of the proposal? Is it time to bring in a subject matter expert? With most sales engagements occurring in digital channels, all the data can and should be used to take action.
Not Updated in Real-Time
How often do you ask your Revenue Operations team to pull a report? Usually, by the time you receive the report, it’s already out-of-date. Dashboards should not only be updated in real-time, they should be query-able in real-time. Get answers to your questions when you have them—not days later.
12 Sales Metrics Every Sales Leader Should Know
So, where do you start? Today, every tool produces reports and analytics. But what data points will truly help you understand where, why, and how you win so you can do more of it? Here are some of the top sales metrics to track to stay ahead of the competition.
1. Funnel Conversion Rate
Conversion rates have long been considered the holy grail of sales metrics. Today, sales leaders are leveraging this metric in new ways. This key analytic is one of the easier data points to calculate, yet one of the most difficult numbers to improve if your forecasting data isn’t reliable. The traditional funnel conversion rate equation is simply the number of conversions divided by the number of leads for a sales period, multiplied by 100. You can take conversion rates to the next level by filtering pipeline data across different categories, such as commit and upside.
While sales leaders typically associate conversion rates with quality of leads, recent momentum has revenue teams tying this data to rep skill sets to help sellers improve their performance. Tracking conversion rates earlier in the funnel can help sales leaders identify gaps in the enablement process and opportunities to step in earlier before deals stall.
Use Funnel Conversion Rate to answer questions such as:
- How did my projected pipeline compare to my actual funnel conversions?
- Am I overlooking a certain part of the sales funnel?
- Is the quality of my data resulting in my low funnel conversion rate?
- Are my reps stepping in early in the funnel to ensure a deal doesn’t stall?
2. Average Annual Contract Value
As revenue leaders, we often get caught up in the hectic, day-to-day challenges facing us. Because of this, we tend to overlook the individual value customer contracts are bringing us each year. This causes potential missed opportunities in renegotiating with customers of different value-levels.
To calculate average annual contract value, take the dollar amount indicated in the contract (excluding any one-time fees) and divide it by the length of the contract (in years). Knowing this key sales metric offers an opportunity to assess high-value customers for up-sell and cross-sell potential.
Track Average Annual Contract Value to answer questions like:
- Is this specific customer’s contract worth enough for how much we provide?
- Are we overlooking up-selling and cross-selling to this high-value customer?
- How does this contract compare to other companies we do similar business with?
- Should we renegotiate with this customer who’s underpaying what similar companies are spending with us?
3. In-Period Bookings
While revenue is a primarily backwards-looking metric, bookings is forward-looking and as a result, a primary indicator of future growth. Bookings indicate the value of a contract signed for a given period of time.
For companies with shorter sales cycles, understanding “in-period bookings” is essential. This value defines the bookings within a forecast period that are NOT in the funnel at the start of the period. Companies with a large percentage of in-period bookings should leverage this data as a statistical component to create a reverse funnel and ultimately deliver their sales forecast.
Understanding in-period bookings drives tight alignment between sales and marketing, with clear goals for the demand generation team who must ensure leads are delivered early in the forecast period to provide enough time for the sales team to convert them into new business. The alignment is both quantity and quality-driven, as measured by the conversion rates of the leads generated.
Use In-Period Bookings to answer questions like:
- How does our in-period bookings percentage compare to our bookings out of period?
- Does our marketing strategy need to be adjusted to generate more in-period leads?
- How many leads did we generate during the sales period compared to how many we had before the period started?
4. Average Sales Cycle
One of the many ways to measure the effectiveness of your sales team is by looking at your average sales cycle length.
This metric is calculated by determining the number of days from first customer contact to closed-won for each deal, divided by your total number of deals.
Once you have your number, put it to use to proactively identify prospects that are starting to lose momentum. When deals fall outside the “ideal” zone, it’s key to take action. Knowing your average sales cycle also helps with forecast predictability; when you know how long the sales cycle typically lasts, you can more accurately predict revenue milestones.
Use Average Sales Cycle to answer questions such as:
- Are my revenue predictions based on past average sales cycles?
- How does our average sales cycle compare to industry peers’?
- Do we need to adjust to speed-up or prolong our sales cycle based on the data?
5. Ideal Customer Profile Score
Does your funnel reflect deals you typically win? Or are your reps chasing too many deals outside your sweet spot?
Today, machine learning models can map current pipelines to a company’s true ICP score, taking into consideration factors such as size of company, industry, roles, and more to determine the deal’s fit.
Sales leaders can use ICP scores to coach reps on the level of investment they should make in a specific account. If the deal is unlike anything you’ve ever won before, you’ll want to invest more time to validate the opportunity with the rep before investing too much effort into it. Sales capacity needs to be treated like the precious commodity it is and allocated to opportunities where you execute most effectively.
Use Ideal Customer Profile Score to answer questions like:
- Are my reps prioritizing the right prospects?
- How does this prospective company compare to other companies we’ve converted in the past?
- Do my reps need coaching on how to specifically win with these companies based on their ICP score?
- Are we investing the right amount of time and effort into our lower scoring companies
6. Win Rate by Meeting Number
What separates your wins from your losses? Is it an incredible demo? A specific use case? The number of meetings to get to a decision? With today’s buyer-controlled journey, it’s important to take a step back and understand the effectiveness of your sales process.
A sales cycle is a series of events where your team is “selling” your value proposition. If the value proposition resonates with the customer, they will continue to invest the time to further review your solution. If not, the engagement will decrease quickly. Assess wins by meetings, or any other milestone, to understand the drop-off points so you can proactively coach your team and reduce losses.
Identifying the key inflection points — where and why you win — is crucial to scaling your sales team and revenue.
Use Win Rate by Meeting Number to answer questions like:
- We aren’t seeing many wins until the fourth meeting; how can we improve on our earlier meetings with prospects?
- Which activities are winning, and how can we adjust to amplify more of the same to our prospects?
- How does our demo convert to wins? Do we need to rethink how we run it?
- This piece of collateral leads to a lot of conversions, so how can we leverage it more?
7. Activity by Day
Engagement activity is the number one indicator of deal outcomes. Keeping tabs on this metric offers instant visibility into the health of your overall pipeline, as well as individual deals and rep performance. Use activity by day to inspect engagement and identify which deals need attention, then use this data in-the-moment to validate your forecast predictions.
Activity by day offers a glimpse into the past six weeks of inbound and outbound activity, meeting, stage change, campaign, from any moment in time. It is most effective when used with automated activity capture, ensuring you start with a comprehensive, trusted dataset.
Take it to the next level by filtering to view levels by rep to improve the effectiveness of weekly 1:1s and pipeline reviews.
Use Activity by Day to answer questions like:
- Are my reps over-investing in under-qualified opportunities?
- Did this opportunity stall because of a one-off cause, or does my team have a larger problem that needs addressed?
- Are my reps engaging the right contacts at the right cadence to win deals?
- Is this pushed opportunity lost completely, or is it still salvageable?
8. High-Probability Renewal Deals
Traditionally, sales leaders have prioritized opportunities projected to renew within a quarter. However, for SaaS companies in particular, it’s now business-critical to also assess opportunities outside the current quarter for both off-cycle churn as well as the chance to pull deals in earlier.
We all love early renewals and expansion opportunities, so don’t overlook them! Whether booked by your customer success or new business team, you can leverage confidence to close and other AI-prediction-driven models to reduce risk and improve upside.
Track High-Probability Renewal Deals to answer questions such as:
- Are we missing opportunities to pull in renewals earlier, resulting in potential loss or inefficiencies?
- Could our off-cycle churn be lessened by focusing on deals outside of our current quarter?
- How are we ranking renewals by their probability to close, if at all, and how can we improve prioritizing them?
9. Confidence to Close Score
Fewer than 50 percent of sales managers trust the data that guides their forecast. Machine learning-driven scoring has stepped in to fill the gap. Confidence to close is highly-regarded for its ability to validate rep predictions based on a combination of static and dynamic data points.
Confidence to close scores can be based on a range of factors and should be updated frequently to reflect the most recent engagement.
Key factors that should be included in a machine learning calculation include:
- Static Opportunity Properties: amount, stage, industry, region, custom properties, etc.
- Static Account Properties: region, territory, owner, custom properties, etc.
- Activity Data: inbound/outbound emails, calls, meetings, etc.
- Progression Status: duration in stages, movement of close dates, etc.
Use Confidence to Close Score to answer questions such as:
- Should I feel confident in this deal closing this quarter?
- My rep said they’re counting on this deal to close, but its closing score is low – do I need them to follow up?
- Is my pipeline forecast accurate based on the closing score of my deals?
- How is my team’s engagement activity affecting our closing scores? Do we need to adjust our communication efforts?
10. Sales Effectiveness by Competitor
Every sales team knows how their competitors operate and what their win rates are against their specific competitors. Top sales teams know how much effort it takes to win against each competitor and what the winning engagement strategies are.
To calculate this sales metric, factor in the number of activities (emails, meetings, etc.), average sales cycle length, and overall number of people involved for each deal. We’re all in the business of winning deals, but time is money — so it’s critical to understand exactly how much you are truly investing. This helps determine the ROI of your sales capacity and what support is needed from Marketing and Product departments to improve sales effectiveness.
Track Sales Effectiveness by Competitor to answer questions such as:
- Are my reps spending too much time competing against company “X?”
- Are my reps spending too little time competing against company “Y?”
- Do I need to tell my marketing department to focus on creating more collateral to compete against specific companies?
- Do my reps’ communications need to be adjusted to focus on specific competitors?
11. Activities Required to Reach the Decision-Maker
Do you know how many meetings it takes to engage the decision-maker?
Whether a net-new sale where you’re trying to create a compelling event or a renewal that needs stakeholder buy-in, getting the key people in the room early can save days and deals.
To identify this metric, analyze the total number of meetings you have on deals and break it down by the personas involved. This process can often be automated. Once you have a baseline, look for opportunities to reduce time to engage. It’s likely that will also speed your overall sales cycle.
Track Activities Required to Reach the Decision-Maker to answer questions such as:
- Why is it taking so many meetings to reach our decision-makers? Do we need to adjust how our earlier meetings are conducted?
- We reached the decision-maker quickly with this particular deal; is there anything we can take away from it to use for future prospects?
- Are our reps allocating enough time and effort to meetings based on historical tracking?
12. Opportunities That Have Stalled
The top line funnel coverage looks good, but is your pipeline full of false hope? Look no further than recent and upcoming activity — or lack thereof — to determine the heath of the opportunities in your funnel.
Opportunities where customers have slowed their responsiveness or stopped engaging with your team are the first indication a deal may have stalled. To effectively measure this, you will need to have a detailed understanding of the activity profile of winning deals to benchmark against the customer engagement levels in your funnel. This metric will likely be different for each market segment and product within your portfolio — with the activities specific to your sales cycle.
Example metrics in this category are:
- Opportunities closing this month with less than 5 Meetings
- Open opportunities closing this quarter with 4 meetings and no next meeting scheduled
- Open opportunities closing this year with no decision-maker
- Open opportunities with no recent activity in the last 21 days
Track Opportunities That Have Stalled to answer questions such as:
- Is there a trend in when opportunities are stalling?
- Is there a coaching opportunity for me on how to solve stalling at certain points in our sales process?
- Has this opportunity gone completely dark, or can we still salvage it?
- How many opportunities do we currently have that haven’t reached the decision-maker yet?
Take Advantage of the Data!
Do you know what deals are at risk? What separates your wins from your losses? Or where you have enablement and coaching gaps?
As B2B revenue leaders, you’re consistently looking for a leg up. The answer is in the data, and fortunately with a majority of sales interactions occurring in digital channels, there’s a massive trove of data waiting for you.
This data is rich, but it’s also so massive in scale that no human or spreadsheet can parse it. InsightSquared’s Revenue Intelligence Platform features machine learning, automating data capture, next-level reporting, and real-time analytics that improve forecast accuracy, rep effectiveness, and overall sales execution. InsightSquared delivers visibility into the key sales metrics highlighted throughout this blog, with more than 150 out-of-the box reports as well as easy customizations.
These sales metrics serve as a jumping-off point for thinking critically about your organization’s performance. Not only will you have the basic sales metrics you need to assess your team’s performance, you will be challenged to think even deeper. Want a condensed eBook to have these sales metrics handy? Download it here.
To learn more or get a personalized demo, visit: www.insightsquared.com.