Top 5 Key Sales Metrics to Ensure Success

Sales metrics can go a long way in ensuring a company’s success if used right. Sales leaders can play a large role in increasing sales effectiveness when they determine which metrics can help improve said sales, and in turn, will then be able to unify the sales organization and the business strategy. The key, however, is to select a good mix of metrics that will allow you to both measure results, and also predict outcomes. Here are some of the 5 best metrics to ensure company success:

1. Funnel or Opportunity Pipeline: this metric looks into the long term, trying to help sales grow for the rest of the year by determining the number of sales in the upcoming months. It gives each sales opportunity a different ranking, with regard to the success potential. This then allows the sales team to prioritize and save time by working the most on the opportunities with the highest probability of success.

2. Sales Mix: this metric proposes to divide your funnel of opportunities into different fields. This gives a view on how far your strategy is being implemented for each specific area. The sales mix ratios help amplify each field’s success or failure, at which point sales teams can make the appropriate adjustments.

3. Cost of Sales to Revenue Ratio: this calculation metric should be based on the total costs for the selling efforts of each area of business. Measured over a period of time, it can give useful insights into where sales investments in terms of people is needed to get higher revenues, how long it takes for additional sales headcount to generate revenues, and other such trends.

4. Conversion Rates and Ratios: conversion rates are very useful in identifying sales methodology or process issues. Conversion rates need to be measured at various steps of the sales process, such as a win ratio, which is what percentage of qualified opportunities get closed as won. This is one example of many, but this metric helps pin point where the improvement is needed in the process and is useful in the qualification and prioritization of opportunities.

5. Gross Margin Percentage by Sales Person: the general idea of this metric is that the sales team is responsible for getting in the bookings and revenue, and the rest of the organization has to ensure that margins are made. It is a bit controversial, because it seems that unless they rtack and reward sales people based on not only the volume of the bookings but also the quality, the organization cannot achieve its margin mandate.


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