Good sales management is knowing what to do with all of the incoming data and how to evaluate it. Each piece of data is a representation of a company's overall sales performance which is also a representation of a company's overall health.
There are a number of sales metrics that prove to be crucial in improving progress and profitability. But there are some that you should be paying more attention to than others.
Here are six of the most important sales metrics that you need to know about:
#1 Lead Response Time
Lead response time is a powerful predictive tool for closing deals. The metric gauges how long it takes to follow up with a potential client that has contacted your business. In other words, it measures the response time between the initial contact and the representative’s response time.
Lead response time can make or break your sales. According to the Harvard Business Review, immediate response time is the number one factor in a business’s success or failure.
#2 Closing Ratios (AKA: win rates)
Analyzing how your employees spend their time will help determine the behaviors that result in a win. Otherwise, known as a key performance indicator (KPI), this is one of the sales metrics that can help you understand how well (or poorly) your employees are performing.
This works by determining the ratio of opportunities compared to deals closed. So out of 100 opportunities, if 50 of them resulted in a signed contract, you have yourself a 50% closing ratio. If the win rates are consistently high, it means your employees are consistently improving.
This is also a collective win rate which reflects on how well your implemented sales strategy is and how well you are doing as a team leader. It can also indicate both your lagging and leading indicators.
Money pays the bills. That’s why your revenue stream is an essential KPI and arguably the best measure of your sales metrics. Your revenue stream isn’t just the incoming money in a certain time frame. It’s also a record of discounts and returns.
To understand your revenue stream and how it indicates the overall performance of your business, you have to look at specific variables. Those variables are as follows:
- The percentage of revenue from new business
- The percentage revenue from upgrades, cross sales, and extra features at cost
- The percentage of revenue that comes from service or product renewals
- Customer maintenance (I.e., follow-up calls, customer service, etc.)
You want your incoming revenue to be as predictable as possible, which is why you must track each component of your revenue stream.
#4 Customer Acquisition Cost (CAC)
Your CAC is the diagnosis of metrics. It can reveal the health of your company. Your CAC is the cost of acquiring each new customer, and the ratio is between what each new customer spends and the amount your marketing expenses—including salaries.
Of course, you want the cost of attracting new customers to be substantially less than what each new customer spends in a certain time frame.
#5 Customer Lifetime Value (CLV)
Your CLV goes hand in hand with your CAC. You want your business to grow, which means you want your CLV to be higher than your CAC. Your CLV determines how much money the average customer provides your business with over a “lifetime”.
Increasing the value of returning customers is far more beneficial than the expenses it takes to acquire new ones. Of course, with data coming from a number of different channels, detailed record keeping is the difference between good metrics and great metrics.
#6 Sales Funnel Leakage
Like it or not, there will be customers who decide to discontinue your services. In the same sense, these metrics which are also known as your sales funnel leakage, can help you hone in on any problem areas within your team.
Think of this as a two-pronged attack. First, look at variables such as low closing ratios, the number of stalled or missed opportunities, and poor lead response time. Secondly, take a look at what you can learn from these variables. Why weren’t your potential clients a good fit? How consistent were the follow-ups per potential client? Why didn’t some opportunities move past certain stages?
In terms of sales funnel leakage, what can hurt you can also help you.
Make Sure Your Stars Align
It’s crucial that your marketing and sales data all align. Good sales metrics will help you maintain a high conversion rate from potential customer to lifetime customer.
But It is up to you to evaluate which metrics will work best for your business—and it’s best if you focus on the most important two metrics in the beginning.
How Can DashboardFox Help?
A critical aspect of any metrics monitoring program is the BI tool and that is where DashboardFox shines.
First, we’re going to save you a lot of money. By spending less on your BI software your sales can contribute much more to the bottom line. DashboardFox is a one-time fee, not a subscription.
Next, we’re going to save you a lot of time (and time is money), by making it easier to create custom reports and dashboards from your sales data to generate and monitor the metrics listed above (and more). Unlike other BI tools that require a technical consulting army to set them up, DashboardFox was designed to be faster, easier, and less time-consuming on the operations and maintenance side.
Lastly, we’re going to help you. There’s a lot more product features we could talk about, but the biggest value is our team and the support they give you. We may not be an expert in your sales process, but we know a lot about how to convert that into a set of dashboards and reports that can make your sales team work better. When you purchase DashboardFox, you also get a team of BI experts who can help you with your data goals as well.
The best way to learn more, contact us. With a quick call we can learn more about your requirements, show you more of DashboardFox, and get moving to the next steps of a trial or setting up your production environment.