The What of Sales Reporting: 5 Key Sales Metrics To Track In 2023
Humour us for a minute. Imagine you’re given an earthen pot and you’ve to make the exact replica of it. For argument’s sake, let’s just say that you know how to make a pot but you’re not sure how to make an exact replica. So, to start with you try to just look at the pot and make a copy based on instinct. Needless to say, it’s not the same. Then, you decide to use some sort of measurement for it. You take a glass, and you measure the number of glasses of water it takes to fill the pot and then make a pot with the same volume. Do you think it will work? Quite unlikely.
There’s no denying that measurement is crucial. However, knowing what to measure is equally important. Sales teams today have moved away from instinctual selling and are actively using data to make informed sales decisions. That being said, only a few teams have been able to use the right data needed to improve sales performance.
In this article, we’ll cover all the important metrics that every sales team must keep an eye on to grow. Even if you think that you’re measuring most of the important aspects, there’s no harm in giving this a quick read to check if nothing’s getting missed out.
What do we mean by Sales Metrics?
Sales metrics are the key indicators that let an individual, team, and organization monitor the performance of a business and its growth. Any metric that enables a business to understand your progress towards your business goals can be a sales metric.
Decoding the jargon: data, metrics, analytics techniques, and reporting
More often than not, when it comes to sales analytics, there are four words that you’d come across. There’s sales data, sales metrics, sales analytics techniques, and sales reports. While all four of them come under the umbrella of sales analysis and reporting, they’re not the same. Rather, they’re steps of a process.
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Every qualitative and quantitative information that you get out of your business sales is sales data. Out of this unstructured heap of data, the parts you choose to measure and monitor become the sales metrics. The way you analyze or interpret these metrics data to draw conclusions becomes the sales analysis technique. Finally, when you combine all of them to record your findings, you end up with a sales report.
With further ado, let’s now move on to the key sales metrics you should track for your business.
5 must-have sales metrics for every business
Performance Metrics or KPIs
Key Performance Indicators (KPIs) are direct sales data that is there for every team. It encompasses the total number of sales made, and the total revenue generated from it. While this is the basic KPI, you can further break it down depending on your business.
Here’s what some of the differentiated performance metrics are:
- New business sales performance: This includes the revenue generated from first-time customers and the number of new customers you acquire.
- Product-wise sales performance: Here you measure the sales and revenue from each product or product type for your business. (More common in eCommerce and Retail)
- Net-profit margin performance: This measures the profit margin of each sale and then calculates the overall profit gained in a specific period.
Source: The Balance Small Business
Often overlooked, outreach metrics also impact the effectiveness of your sales process. Outreach metrics measure the efforts made by your business to gain a customer. Converting a customer does not happen overnight. It’s like coffee–you’ve got to brew it.
Your customer interacts with your brand on multiple channels and it is only after several interactions and outreach efforts that they get to the point whether they become interested in your brand. This could be social media outreach, cold emails, or even cold calls.
Measuring how valuable each of these efforts is, helps your sales team in understanding which one works better and improving on them.
Some of the common metrics here would be:
Email Sales Metrics
- Open Rate: The number of emails that were read against the total number sent.
- Response Rate: The number of emails that got a response wrt to the total sent.
- Engagement Rate: The number of emails that the customer interacted with by clicking, playing a video, or accepting an invite against the total.
- Conversion Rate: The number of recipients that moved ahead in the sales funnel.
Call Sales Metrics
- Call Backs: Number of calls that were received and request a call back at a convenient time.
- Total Conversion Rate: Percentage that converted to a customer.
- Partial Conversion Rate: Percentage that moved up the conversion ladder but didn’t completely convert.
Social Media Sales Metrics
These depend totally on the social media outreach to use for your business. It could range from LinkedIn Inmails that got a response to Facebook Ads that were clicked. As long as you track the outcome of an effort that you make on any social media platform, it would be insightful enough to help you improve.
Source: Neil Patel
Lead Generation Metrics
A common assumption is that lead generation is the sole concern of the marketing team. So, any related metrics are of no use to the sales folks. That’s where most teams miss the mark. While lead generation metrics are key to the marketing team, they also can guide the sales team in qualifying customers, building strategies for different types of customers. Not just that, it also helps your sales team members in their prospecting goals.
Lead generation metrics include:
- Lead Creation Volume: Volume of leads added.
- Follow-up Frequency: The number of follow-ups made to each lead and its frequency.
- Lead Qualification Data: Leads that were dropped and those that were qualified for the next stage.
- Customer acquisition cost (CAC): Total cost to convert a lead into a customer.
Source: Clever Tap
Unlike the rest of the sales metrics, productivity metrics are what you focus on when you want to hone your airtight, tried-and-tested sales process. Here you work with the rate at which each salesperson meets their targets. These metrics are often individual and not for the entire business performance.
Productivity metrics are measured in terms of the time a sales team member spends on different segments of their job. These include time spent on demoing, time spent on data entry, time spent on content creation, etc. In addition to that, performance metrics also record the percentage of the closed-won deals in that specific time period.
One of the most straightforward sales metrics, activity metrics take into account what your sales team does on a day-to-day basis. These come in handy when you need to analyze the individual performance of your sales reps. For instance, if one of your sales team members is not meeting their targets, you dive into the activity data to understand where they’re lagging. Perhaps, they’re not doing enough follow-up to make their leads convert. Based on this analysis you help them rectify their performance.
Activity metrics are merely numbers to record actions. They encompass a number of calls, emails, meetings, pitches, etc. While these metrics are individual, they can also help you in predicting your overall performance for a month. If you have 10 reps, with each averaging 30 calls and 20 emails a day, and converting 3 leads per day, you can target around 1000 customers in a month.
In the end
With the 5 key sales metrics, you’d have enough insight into your business performance. However, the story doesn’t end there, right? It is equally important to use this data to make actionable changes to your sales processes and content and improve your sales results.
All said and done, keeping an eye on your key metrics is the beginning of acing your sales process and we all know that well begun is half done.
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