If your sales team isn’t closely tracking key performance metrics already, you should be.
Data-driven sales teams have a proven advantage in the business world, and more and more sales professionals today measure their performance according to a variety of metrics — not just dollars won. Sales metrics can tell you when you’re on track to hit your number for the quarter, if you’re at risk of losing a big deal, and much more.
Instead of talking theoretically about the importance of sales metrics, we decided to ask sales reps in the field about the real metrics they track each day. We spoke with reps at multiple companies who all face the same challenge: driving improvements in performance based on data. These talented sales professionals offer their experiences using sales metrics so that you can improve your own sales results and adopt a more data-driven approach.
Are you one of the top reps on your team, or are you slipping toward the bottom? Sales metrics can not only help you understand how you’re performing in relation to your peers, but can also help you improve your performance over time.
Katie Barrett, Sales Consultant at Meltwater, said that she uses metrics to track whether her performance is trending up or down quarter to quarter. She explained that she tracks how many demos she conducts with prospects as well as how many leads she brings in herself.
“My manager and I have weekly meetings to go over all of these figures and make sure we are on track for the month,” she said. “If sales are not where they need to be, it’s because you aren’t making the necessary number of calls to book demos and create interested cases. If you look back on a month, you want to be able to see what indicators are there — good or bad.”
Barrett said that the top reps on her team are displayed prominently on a Sales Leaderboard in the middle of the office, and no one wants to fall behind. Tracking metrics transparently holds everyone accountable, and leads to better results, she explained.
“You do not want to be the person with an empty board, so tracking for everything out in the open really adds a little healthy competition to the office atmosphere,” she said.
The same competitive spirit also drives Dan Strauss, Account Executive at InsightSquared, who said that every single morning he logs into his dashboard and looks at how many dials he’s made compared to the other members on his team.
“I should be making 20 to 30 calls per day every day,” he noted. “The competition between me and other reps pushes me to improve. I want to be at the top for all of those metrics.”
In addition to activity levels, Strauss also analyzes more high-level metrics, such as conversion rates down the sales funnel stages and sales cycle length. He wants to understand what’s working, what’s not, and what’s the next step he should take.
“When I use metrics to drive my behavior, I’m making a process that’s proactive rather than reactive,” Strauss explained. “I’m never surprised by my performance. Using these metrics, I’m able to create a sustainable way to ensure I hit my number. If you’re not making enough calls, not sending enough emails, and not having enough meetings, you’re not going to hit your number.”
While tracking metrics is obviously a key to sales success, it’s important to remember to track the right metrics. Kelley Ryan, Account Executive at SmartBear Software, warned that sales leaders shouldn’t put too much emphasis on activity metrics alone.
“Good sales professionals don’t necessarily need to be ruled with an iron fist,” she said. “Telling reps to hit 100 dials a day is not a good sales practice, nor does it necessarily mean that someone will be successful. I’ve seen sales professionals call their cell phones 20 times just to hit their number. How is this beneficial to their success? It’s not.”
Sales reps thrive off of numbers, she explained, but they should be held accountable to the metrics that truly measure performance: conversion rates.
“Pipeline growth and bookings are our number one performance metrics,” she noted. “We’re held to a certain number of calls per day, but my manager is flexible to some extent as long as we’re booking business and adding pipe.”
Strauss said that he’s been able to find patterns in his own sales metrics, and make changes based on that information. He looked at his conversion rates between sales stages and noticed that he lost the most opportunities between Discovery and Evaluation.
“I realized that I need to do a better job of persuading them to do an evaluation,” he said. “It made me aware of my willingness to let go in that stage. Once I was aware of that, I was able to act a little differently when I was getting pushback.”
He also said he noticed that he allows opportunities to spend more time in Evaluation, making his sales cycle twice as long as the average on the team.
“That means I hold on too long to deals I know I can’t win,” Strauss said. “I realized I had to make changes, and let go of those deals and stop wasting my time.”[button size=”large” align=”center” full=”false” link=”https://offers.insightsquared.com/right-metrics.html?blog_source=organic&blog_medium=blog&blog_campaign=sales-metrics” linkTarget=”_blank” color=”blue”]Learn More About Measuring Sales Metrics »[/button]
The Big Picture
While metrics are driving individual reps to improve, they can also push changes across the entire sales team. Darren Spence, Sales and Marketing Director at Content and Code, explained that every metric he tracks on his team is tied directly to results.
“Sales performance should directly map to the business strategy to ensure the business objectives are met,” he said. “Shareholders don’t like surprises, so regular monitoring will help ensure expectations are managed.
Amanda Matczynski, Senior Operations Specialist at Wolf & Company, tracks the metrics for her SaaS sales team weekly, monthly and quarterly. She said that in the short term, she tracks response time, how opportunities progress through the sales cycle, and which activities lead to bigger deals.
“Quarterly is when the bigger metrics come into play – we look at Customer Acquisition Costs, number of months to recover CAC, Lifetime Value, and Average Deal Value,” she explained.
However, the biggest challenge for Matczynski’s team will be familiar to most sales leaders — the revenue forecast. She explained that she keeps a close eye on the sales pipeline to better predict whether they’re actually going to hit their number this month.
“When we look at the sales funnel and see that we’ve got nothing at the top, we know we’ve got issues,” she said “One of the other indicators we’ve seen recently is opportunity age. We had issues with opportunities sitting stagnant for long periods of time. Without looking at data analytics we never would have seen that and been able to make changes.”
Randy DeHaan, Sales Director at InsightSquared, said he faces the same challenge on his team. He tracks the pipeline inflow and outflow closely, so he knows whether his team is adding a sufficient number of new opportunities to make up for the opportunities that have Closed-Lost or pushed.
“The pipeline inflow-outflow report is incredibly important because it’s an indication of whether we’ll hit our targets in the short-term and the long-term,” he explained. “Most sales reps focus on how they’re getting to the 31st of this month. In reality, if you have a longer sales cycle, what we do in May impacts your sales in June and July. You have to be thinking, do I have enough to be successful now and am I adding enough new opportunities to be successful next quarter?”
Because of this, DeHaan asks every rep on his team to add Pipeline History reports to their dashboard and to have a plan for sourcing more opps to fill the pipeline and lead to more consistent growth over time. If he hadn’t been tracking those pipeline metrics, he would have been blindsided by a band sales month.
“We’re growing at an aggressive rate, so we always have to keep an eye on the metrics,” DeHaan said. “Without the data, we would never have any consistency or understanding of our own sales performance.”[image source_type=”attachment_id” source_value=”29227″ width=”632″ height=”250″ align=”center” quality=”100″ link=”https://offers.insightsquared.com/right-metrics.html?blog_source=organic&blog_medium=blog&blog_campaign=sales-metrics”] [contentblock id=18 img=html.png]