Sales metrics are essential to tracking a team’s progress. Sales leaders use these measurements to upgrade processes and fine-tune the team’s overall strategy. But which sales metrics should managers pay the most attention to? Read on to learn more about which sales key performance indicators you should zero in on to boost your sales analytics strategy.
Average deal size is the average worth of your deals over a given period. Deals of all sizes can be valuable. Small deals can lead to important relationships that yield bigger deals down the line, and apparently huge deals may turn out to be less promising than expected. Moreover, what is considered a large deal for one organization may actually be rather modestly-sized for another. Average deal size helps you make sense of it all by putting your deal progress into context. It can be a very useful indicator of whether your team is targeting the right prospects. For example, if your team has had a long string of deals recently, but they were all on the smaller side, it may be time to reconsider your outreach strategy. Are you speaking with prospects who are actually in need of your product or service? Is your team struggling to close more complicated deals?
This metric compares the number of closed deals (‘wins’) to those that fell through (‘losses’). Knowing the ratio of successful closes to overall deals helps sales leaders for a number of reasons. For starters, it can be useful in determining the number of deals that your team should aim for including in the pipeline. Is your team successful securing most deals? A high ratio of wins to losses shows value creation is happening for both parties during the sales process and your team is firmly in control throughout. If the rate is on the lower side, would you need more deals to increase your likelihood of closing successfully, or would having less deals on your plate help you focus on nurturing existing relationships? Looking at your win-to-loss ratio will help you reflect on the effectiveness of your team’s overall selling strategy.
Take a look at how many of your sales reps are unable to make quota. Is it a large percentage of the team, or only a few usual suspects? Consider how you can help sales reps who are having a hard time meeting targets. Additional training, sharing best practices, and even quota readjustment should be on the table. However, if most of the team is failing to close enough deals to meet quota, it may be time to readjust your leadership strategy and make some serious changes. If you are struggling to scale lessons across your team, sales software solutions like Attention can help. Attention helps sales leaders identify problem areas, gives sales reps instant feedback, and tracks team growth using AI technology.
The length of a sales cycle gives you a good idea of the amount of time it takes to close deals. More specifically, it is the ratio of the amount of time spent on all successful deals to the number of such deals. CRM tools like Salesforce can help you calculate this one. In addition to industry type, factors that can affect the sales cycle length include pricing, terms of payment, the number of people involved in the sale, and market maturity for your product or service.
How many clients decided to end their contract within a specific time interval? The higher your attrition rate, the more customers decided to stop doing business with your company. Tracking customer churn is key to understanding whether your sales organization needs to work on client satisfaction. If retention rates are low, your organization will need to devote more time and resources to courting existing accounts. Recruiting new accounts is costly, and as the old cliché goes, you don’t know what you have until it’s gone.
Subscription businesses should also pay attention to ARR and ARPA. Annual Recurring Revenue is the amount of revenue in every year for the duration of a contract, and is calculated by taking the total worth of a contract divided by the number of years left for the contract. Average Revenue Per Account, on the other hand, is a measure of account worth. You can figure out your ARPA by taking your company’s revenue over a given time period and dividing it by the total number of active accounts for that same period. These metrics are important to determine profitability and can serve as comparison points to assess performance relative to similar organizations.
Of course, to understand how to improve your numbers on a company-wide level, you will need to take a look at your sales reps’ performance on an individual basis. Measure outreach efficacy with metrics such as number of phone calls per week, average call duration, outreach attempts met with responses, number of meetings booked, and ratio of positive to negative interactions with prospects. Even though it’s very important to keep track of performance metrics, don’t get bogged down by the details and be sure to take a big picture approach when setting goals. The point of taking all these measurements in the first place is to determine how to best help your team acquire strong sales reflexes, build better relationships with clients, and of course try to exceed revenue targets. Are you using sales analytics software to advance? Attention uses AI to track your sales reps’ performance over time. With indicators like speak share, questions asked, and overall engagement, Attention equips sales leaders with the metrics they need to help their team reach new milestones in record time.
Battlecards are an internal document with valuable information on your prospect and their industry, they will aid sales reps in carrying out better conversations and ultimately winning more deals. Battlecards are a great sales enablement tool that is used as a “cheat sheet” to provide your sales teams with the keys to stand out and beat their competition.
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Implementing a conversation intelligence software will allow sales reps to gather insightful call analytics that will make them effective and efficient during their calls, it will increase ROI, and help boost the productivity of the entire sales team.