Any business looking to jumpstart revenue growth and optimize sales performance must examine its sales metrics closely. These metrics provide actionable insights into the effectiveness of sales strategies. They help organizations identify what works and what doesn’t, predict the sales team’s needs, and recognize their successes.
Strategic decisions in sales take time. They must be carefully planned based on data, and this is where metrics come into play.
The following article covers the 18 most important sales metrics you should measure. They will help you optimize decision-making and boost your return on investment (ROI).
Sales metrics are measurements used to assess the performance of a sales team. They can also track individual sales activities within an organization. They provide quantitative data that help managers make informed decisions, create accurate sales forecasts, and focus progress toward goals.
Sales metrics have one specific goal — to assess a company’s performance and outcomes. Other metrics, like financial, operational, or marketing ones, focus more on factors like profitability or process efficiency. Together, these metrics evaluate a company’s financial and operational health.
Here is how sales metrics help in terms of strategic planning and performance evaluation.
There are two main categories of sales metrics.
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Sales operation metrics evaluate the health of an organization’s sales procedures. They focus on the activities that support the sales function rather than the outcomes of sales activities.
Operation metrics can help you significantly reduce the length of the sales cycle. This ensures that prospects are engaged while their interest is at its peak, improving the performance of your sales team and their responsiveness.
These metrics can also help increase upsells and cross-sells, leading to steadier income streams. What’s more, they can give you valuable insights into improving customer service interactions.
Here are the key sales operation metrics you need to monitor.
SPC measures the ratio of the total potential sales in the pipeline to the sales quota.
This metric helps assess whether there is enough potential business in the pipeline to meet future sales targets. It provides an early warning signal if extra prospecting is needed.
Divide the total dollar value of the sales pipeline by the sales quota for a given period.
Example: If your total value of the sales pipeline is $500,000 and your sales quota is $450,000, then SPC = 500,000 / 450,000 = 1.11.
A common benchmark is a ratio of 3:1. This indicates three times more potential revenue in the pipeline than the quota.
The LRT represents the time taken by sales teams to respond to leads.
Faster response times can significantly increase the likelihood of converting leads into sales. That is because potential customers appreciate rapid engagement.
Track the time from when a lead is received to when it is first contacted by a salesperson.
Example: If a lead was generated at 2:00 PM and the first contact was made at 2:30 PM, then LRT = 30 minutes.
The best practice is to respond within 5 minutes. Gauri Manglik, CEO at Instrumentl, reinforces the idea that responding within this timeframe dramatically improves conversion rates:
“In my experience as a sales professional, response time is one of the biggest drivers of sales success or failure. When a lead reaches out with interest, the clock starts ticking. If you can respond within 5 minutes, your chances of connecting are exponentially higher. At 30 minutes, your odds drop by over 80%. After that first hour, most leads have moved on.”
QAR is the percentage of salespeople achieving their sales targets.
Allison Kesselring, sales manager at Oaks Roofing and Siding, described the importance of QAR:
“QAR is crucial because it directly reflects the effectiveness of a sales team. This rate not only helps in assessing individual and team performance but also impacts overall business growth. High attainment rates indicate a motivated and effective team, whereas consistently low rates may signal the need for additional training or adjustments in sales strategy. Achieving or exceeding quotas regularly boosts team morale and drives revenue, making it a critical focus for any sales-driven organization.”
Divide the number of salespeople who met or exceeded their quota by the total number of salespeople. Then multiply by 100 to get a percentage.
Example: If your actual sales are $400,000 and your sales quota is $500,000, then QAR = (400,000 / 500,000) x 100% = 80%.
Benchmarks vary by industry. Typically, a 60-70% attainment rate is considered strong.
CoS makes up the total direct and indirect costs associated with the sales process.
Understanding these costs helps you optimize sales strategies and pricing models to improve profitability.
Sum all costs directly tied to the selling process (salaries, commissions, travel expenses). Allocate a portion of indirect costs (administrative support, technology expenses).
Example: If your total selling expenses amount to $50,000 and the total revenue you’ve generated is $200,000, then CoS = 50,000 / 200,000 = 0.25 or 25%.
Benchmarks vary widely across industries. Tracking changes over time can provide actionable insights.
SbR/C is an analysis of sales data segmented by different geographical locations or sales channels.
SbR/C identifies high-performing regions or channels. It helps you optimize resource allocation accordingly.
Aggregate total sales for each region or channel over a given period.
📊 This is more of a reporting metric than a calculation. Summarize sales values per region/channel.
Comparisons should be made against historical performance, industry averages, or predefined targets for each region or channel.
CAC evaluates the cost-effectiveness of acquiring new customers.
Ian Sells, CEO at Million Dollar Sellers, explains why CAC is such an essential sales metric:
“CAC is crucial because it quantifies the efficiency of your marketing efforts. It helps you understand how much you are spending to acquire each new customer. This metric is vital for determining the sustainability and profitability of your business models. By analyzing CAC in relation to customer lifetime value (CLV), businesses can assess whether they are investing wisely or if adjustments are needed to ensure long-term success.”
Divide the total costs associated with acquiring new customers (marketing and sales expenses) by the number of new customers acquired.
Example:
If your total marketing and sales expenses are $100,000 and you have 500 newly acquired customers, your CAC = $100,000 / 500 = $200.
The ideal CAC varies by industry and business model. To ensure profitability, it should be less than the CLV.
Sales performance metrics assess how well a sales team is doing in achieving its target. If you are looking to boost sales, tweak strategies, or increase productivity at an individual level, sales performance metrics will provide the data for you to make an informed decision.
This type of metrics helps assess if your sales process and sales team are as effective as they should be. Let’s take conversion rates. Lower ones suggest that there may be an issue with your sales pitches or that leads need to be of higher quality. Once you’ve established the cause, taking corrective action is half the journey.
These are the most important sales performance metrics you should look at.
The revenue reflects the total amount of income generated from sales activities.
Tracking revenue trends over time helps assess the business’s financial health, growth trajectory, and sales strategy effectiveness.
Sum the total sales transactions over a specific period.
Example: If you’ve sold 300 units at a price per unit of $800, then your revenue = 300 units × $800 per unit = $240,000.
Benchmarks can vary depending on the industry, market conditions, and company size and stage. The trend itself — increasing, stable, or decreasing — is often more insightful than the absolute figure.
SG measures the increase in sales over a given period. It is typically reported as month-over-month or year-over-year.
Sales growth indicates the success of sales initiatives, as well the market demand for your products or services.
Calculate the percentage increase in revenue from one period to the next.
If your sales in the current period amount to $120,000 and your sales in the previous were $100,000, then SG = [(120,000 – 100,000) / 100,000] x 100 = 20%.
A healthy growth rate is often considered to be in line with or above industry averages or historical company performance.
The conversion rate is the percentage of prospects that convert to customers.
This metric assesses the effectiveness of sales pitches and presentations. It indicates how well your sales team is closing deals.
Divide the number of sales made by the number of potential customers approached, then multiply by 100.
Example: If you’ve made 150 sales out of 1000 total leads, CR = (150 / 1000) x 100% = 15%.
The benchmark varies widely by industry. Typically, a higher conversion rate indicates more efficient sales strategies.
APV measures the average amount spent by a customer per transaction.
Understanding and increasing the APV can boost revenue without increasing marketing and CoS.
Divide the total revenue by the number of transactions.
Example: If your total revenue of $50,000 was generated from 250 transactions, then APV = $50,000 / 250 = $200.
The benchmark varies by industry and product type. Comparing against industry averages or historical company data is recommended. Adam Hardingham, CEO at Rivmedia, shared some tips on improving APV:
“To boost APV, implementing strategies like upselling and cross-selling is effective. Suggesting upgrades or complementary products, such as a phone case with a new phone, can significantly increase sales. Additionally, offering bundled products at a discount and rewarding loyal customers with special deals can further enhance APV, ultimately leading to increased revenue and customer satisfaction.”
SCL is the average time it takes from first contact with a potential customer to closing a deal.
Shorter sales cycles typically mean more efficient sales strategies and faster revenue generation, affecting cash flow and resource utilization.
Calculate the average number of days between initial contact and deal closure across all sales in a given period.
Total number of sales closed — 20
Days taken to close each sale — [30, 45, 24, 28, 35, 40, 50, 60, 25, 20, 15, 70, 30, 22, 55, 25, 45, 35, 40, 33]
ASCL = (30 + 45 + 24 + 28 + 35 + 40 + 50 + 60 + 25 + 20 + 15 + 17 + 30 + 22 + 55 + 25 + 45 + 35 + 40 + 33) / 20 = 717 / 20 = 35.85 days
The benchmark varies by industry and complexity of the sales (for example, B2C vs. B2B). Benchmarks are generally established by comparing against industry standards or historical performance.
Cr is the percentage of customers who stop doing business with a company over a given period.
High churn rates can indicate dissatisfaction with products or services. They can negatively impact revenue and growth.
Divide the number of customers lost during the specified period by their total number at the start of the period, then multiply by 100.
Example: If you had 200 customers at the start of the period and you lost 30 during the period, then Cr = (30/200) x 100% = 15%.
Ideal churn rates are low, but acceptable rates vary by industry. Subscription-based businesses, for instance, often aim for rates lower than 5-7% annually.
Metrics are particularly important for the software-as-a-service (SaaS) industry. Customer retention is crucial in this industry, as the market is extremely volatile.
So, these are not just numbers; they are indicators that influence a SaaS’s entire business course. They help increase revenue per client, highlight upselling and cross-selling opportunities, and assess customer satisfaction and product-market compatibility.
Here are the sales metrics SaaS companies (ourselves included) should pay close attention to.
MRR measures the total expected recurring revenue generated by a business each month from all active subscriptions.
MRR is crucial for SaaS businesses, as it can provide a predictable revenue stream. It helps in financial planning and stability assessment.
Sum the recurring charges of all active subscriptions within a month.
Example: Suppose a software company has 150 subscribers, each paying an average of $50 per month. MRR = 150 subscribers × $50 / subscriber = $7,500.
Growth benchmarks vary by company size and stage. Maintaining a steady or increasing MRR month-over-month is generally a positive indicator.
CLV is the total revenue a business can expect from a single customer over the duration of their relationship.
CLV helps businesses understand the financial value a customer brings them. It guides decisions on customer acquisition and retention spending.
Multiply the average purchase value by the average number of purchases per year and the average customer relationship length in years.
Example: If the average monthly revenue per user (ARPU) is $30 and the average customer lifetime is 36 months, then CLV = $30 × 36 = $1,080.
As previously mentioned, CLV should be significantly higher than the CAC. A CLV to CAC ratio of 3:1 is often seen as a benchmark.
The customer engagement score assesses how customers interact with a product or service based on activities deemed valuable (like logins or feature usage).
Higher engagement often correlates with greater customer satisfaction and loyalty. It directly impacts retention and growth potential.
Assign points to different engagement activities and total these for each customer.
Example: If you had 500 interactions in a month among 150 active users, CES = (500 / 150) x 100 = 333.33.
Benchmarks will vary depending on industry and product. They should be used to identify highly engaged customers versus those at risk of churn.
These rates measure the percentage of customers upgrading to a higher plan versus those downgrading to a lower one.
Understanding these rates helps gauge customer satisfaction and the perceived value of different service tiers.
Calculate separately by dividing the number of upgrades or downgrades by the total number of subscribers, then multiply by 100 for percentages.
Example: If a service starts the month with 200 users, 20 users upgrade, and 10 downgrade, then UR = (20/200) x 100 = 10% while DR = (10/200) x 100 = 5%.
Healthy upgrade rates vary by industry. They should generally outweigh downgrade rates to indicate positive business growth.
NRR measures the percentage of recurring revenue retained from existing customers in a given period, accounting for upgrades, downgrades, and churn.
NRR highlights customer satisfaction and product value. It shows the ability to retain and grow revenue within the existing customer base.
Divide the revenue at the end of the period by the revenue at the start after adjusting for upgrades and downgrades.
Example: If you have a starting MRR of $10,000, an expansion revenue of $2,000 during the month, and churned revenue of $500, NRR = [($10,000 + $2,000 – $500) / $10,000] x 100% = 115%.
An NRR over 100% is excellent, as it indicates that expansion revenue exceeds losses from downgrades and churn.
This metric tracks additional revenue generated from existing customers through upselling or cross-selling.
It indicates the effectiveness of growth strategies within the existing customer base. It also contributes to overall revenue growth.
Sum all revenue from upgrades, additional purchases, or cross-sells that occur beyond the initial sale.
Example: If existing customers contribute an extra $2,000 through additional purchases or upgrades, then ER = $2,000.
Benchmarks vary. Typically, businesses aim for high expansion revenue as a percentage of total revenue to show effective customer value maximization.
Sales metrics are not just business growth propellants. If monitored correctly, they help you understand every facet of your business operation. When that happens, you can adjust them to fit specific business needs. Regular reviews offer a clear picture of future trends.
This is why sales require a data-driven optic. Once collected, data leads to strategic business decisions that drive revenue and the continuous optimization of resources. Sales metrics are your gateway toward wiser business strategies, improved operations, and continuous development.
Raluca Mocanu is a seasoned content writer, specializing in content marketing since 2016. With a strong focus on customer behavior analysis and SEO optimization, she crafts compelling narratives that drive engagement and boost conversions.
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