5 Sales Metrics That Will Improve Your Bottom Line
If you’re a sales manager, you probably know how important data is for you to do the job right. When it comes to measuring sales, there’s no such thing as too much information.
Data makes your business more efficient and take informed decisions. But sometimes, sales metrics such as Average Deal Size, Lead Velocity Rate and Average Win Rate can get overwhelming.
We will break this down for you.
In this article, we bring you a handy list of sales metrics that explains what metrics your business should track for success, so you don’t have to fret.
Let’s dive right in.
Why sales metrics are vital for every business
Before we dig deeper into the subject, it’s important for you to understand why you must track and measure sales metrics as much as you can. Metrics are important because they allow you to track certain aspects of your daily actions that add up to weekly, monthly, quarterly and yearly results. They will set you up for long term success.
They can help you evaluate your team’s performance, spot issues, identify milestones, and course-correct based on the analysis of the data.
Each sales metric has something different to offer to your company and the way it performs. It is important to note that the combination of using these metrics regularly is what will help you succeed, increase sales, and create well-functioning teams.
The Opportunity-to-Win a.k.a. Average Win Rate
“A known fact to any business is that not every lead will turn into a customer. No matter how interested a potential buyer is in your products or services, there is nothing that can assure you they will go ahead and make a purchase,” notes Marie Jones, Sales Manager for WowGrade.
Mostly, this has nothing to do with your products or services. The prospect’s decision might be influenced by different factors including your competitors’ products and reviews, their timing, or even an ongoing sale of a business similar to yours.
Opportunity-to-Win is a metric that will allow you to get a deeper understanding of how well your sales team performs based on the number of successful sales in comparison to the total number of opportunities. The whole purpose of this metric is to help you get a better understanding of the factors that contributed to winning or losing a specific opportunity.
A great option for sales managers who want to monitor their team’s Average Win Rate is to use a report dashboard, like the one offered by Freshsales. This system will help collect the data needed to stay up to date with the success of the metrics that have been setup. It also helps track overall achievements of a team.
This will motivate you to look further into how your CRM can help change the outcome of an interaction with a customer, by helping you determine where the process goes wrong and how you can turn your team’s mistakes into successful strategies for winning over more customers.
Average Deal Size
When your team is working to seal a deal with another company, an influencer, or even a supplier for your products, there are some things you need to consider to make sure that the deal is profitable to your business.
Tracking the average deal size will help you be more mindful about the deals you propose. With enough experience, you will be able to successfully calculate whether a deal will be beneficial for your company or not, even before you consider introducing it.
The average deal size is a sales metric that will help you track the average amount of money a successful deal brings you. This metric is also central in gradually increasing your own or your team’s deal targets. A CRM software like Freshsales gives you complete visibility of your deals pipeline. Quickly see how many deals are in each stage, sort, and filter by their expected close date, and make smart decisions to move deals up the sales ladder.
Running a business successfully depends on the way your marketers and salespeople approach and handle potential customers.
In the case of three out of four new customers, it takes at least four months of selling before they sign a deal when it comes to B2B products, according to a recent survey of over 800 sales leaders. Nearly half of them take at least seven months to a deal and in some cases it can take longer. Sales cycle can be a lengthy process, and following it can have a lot to teach your team about their progress and ways of approaching a lead.
Knowing what you’re doing right or wrong while approaching and handling a new customer will allow you to set certain goals as well as rules which your employees should follow with every interaction. This will help you increase your conversion rates and will enable you to increase your sales quickly.
The best way to measure this though, is with the help of a CRM like Freshsales. This will allow you to track precisely how long a deal took to close by showing you the deals pipeline as well as the average time a salesperson took to convert a lead into a customer by using the right reports and tools. You will notice that leads move faster through the sales funnel if these metrics are tracked in the CRM.
The Sales Cycle is a metric that will help you understand the average number of days it takes to convert a potential customer into a paying customer.
Growing your business isn’t just about how many new customers you are adding every month. It is also about how fast you’re making money. While you might have many customers and deals with other people and businesses, not all of them might be beneficial in the long run.
Sales Velocity is a metric that allows you to estimate the revenue you are going to earn per customer over a specific period of time. It will help you understand exactly how quickly your leads are passing from one stage to the next and of how much value these new customers provide over a certain period.
This metric is important to track as it will tell you if you can implement new tactics to increase revenue. Two ways through which you can achieve this are upselling and cross-selling.
While upselling helps you encourage customers to consider buying a higher end product which is similar to the original purchase hey had made, cross-selling will introduce them to some new products which are still related or complementary to the original.
This tactic will help you increase your sales velocity and also introduce your teams to new strategies they can use via email marketing and other forms of communication. . This will spark their interest in new products.
You will find that the more the customers enjoy your suggestions, the faster they will move from the lead stage to making a purchase and also being more valuable to your company over time.
Lead Velocity Rate
“One of the best ways to make sure that your company is growing correctly and steadily is to track its progress on a month-to-month basis,” advises James Roger, Financial Analyst for Studicus.
The lead velocity rate will allow you to track the average monthly growth in your qualified leads and show you just how many quality leads your team is trying to convert to actual customers every month.
The best way to track the velocity of your leads is through lead scoring. This is a method teams use to rank different prospects based on which are considered more valuable to the company. The resulting score will allow you to determine whether a lead has the potential to bring revenue to your company or not and it will help you differentiate between qualified and disqualified leads.
Using the lead scoring system, your team will be able to know which leads are worth their time and effort so they can turn them into sources of profit for the company.
The equation for this metric might be a little trickier to understand, but once you get the hang of it, you will be able to understand just how important it is to track for your company’s growth.
Tracking your success every step of the way
These sales metrics are the best way for you to track your company’s progress and to see how quickly it is growing. Seeing results on a day-to-day basis might not help you understand your company’s growth rate, but these sales metrics will allow you to see how much your company achieves every month.
A CRM can really help your business metrics and the performance of your salespeople collectively on a dashboard and allow you to generate them automatically so you can always stay informed about everything that goes on with respect to sales.
While some of these sales metrics might be a bit tricky to understand, if you get used to them, you’ll be better organized set yourself up for success.
Do you believe these sales metrics will be useful for your own company? Let us know in the comments section.
Melanie Sovann is a Content Creator and Editor for TrustMyPaper and Studicus. She has an interest in financial matters and enjoys educating herself and her audience about everything new she learns. In her free time, she enjoys listening to podcasts and reading educational books on niche topics.
Illustration by Swetha Kanithi
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