Sales Metrics: What are the most important measurements and why?
Posted: Wed Dec 04, 2024 11:08 am
The term sales metrics refers to the KPIs (Key Performance Indicators) that a company, individual, or team monitors to measure overall business performance. Team leaders use sales performance metrics to determine progress and monitor goals and objectives. It's important to understand what the right metric is for each stage of the sales process.
We asked some experts which sales metrics they think are most important in the industry.
Daniel Disney
Founder of The Daily Sales .
“The most important sales metric a company should measure is customer satisfaction during and after the sales process.”
“Sales measurement is obviously a very important indicator, however, it often encourages salespeople to focus only on selling.”
“This pressure can sometimes lead salespeople to not pay enough attention to the customer experience, often pushing too hard to make a quick sale. By focusing on the customer experience, they increase their chances of winning long-term customers rather than short-term deals.”
Matt Heinz
Founder of Heinz Marketing .
“All performance metrics are revenue-based. Why do we do what we do and why does it matter? Revenue is the answer to both questions. A good metric that serves as a “compass” to guide us should be as revenue-based as possible.”
Peter Caputa
CEO of Databox .
“The most important sales metric we track is our record of paid conversion rate.”
“We calculate this metric by dividing the number of product registrations (as measured by Mixpanel) by the number of sessions on our website.
“Since we offer a free version forever and a free trial of our paid plans, many of our new users are able to set up our software on their own. As a result, many of our new customers purchase our product with just a little help from us.”
“We may have a few quick chats with them to answer some specific questions or a call to help them get set up, but we rarely find out their decision-making process or qualify them on budget, like in a traditional sale.
“Therefore, to optimize our conversion rate, our product support, marketing, and pre-sales teams need to work together on initiatives. Our paid conversion rate tracking helps us measure the impact of all these initiatives.
“For example, our product team identified that 20% of our signups are trying to set up one of our more complicated features, and 95% of them give up when trying to figure it out. So the team is building a new onboarding process to make it easier to set up that specific feature.
“Once the product team rolls it out, marketing will help us launch it and our sales and support team will help us get feedback.
“Additionally, our pre-sales support team has a separate initiative to offer overseas chinese in worldwide data more aggressive setup assistance with Zoom screen sharing calls, as we know our close rate increases when we have a call with a test user. Marketing will help us craft the messaging that sets up those calls.”
“Marketing is also creating content to educate users on how to set up the app on their own. Our sales team is helping them discover that content and they work with our product team to deliver it to users in the app.
“Conversion, which is a paid enrollment metric, is key because everyone can influence it. With initiatives designed to improve just one number, executed by different teams, we can get everyone to collaborate better. When multiple projects succeed, we can celebrate together. We can also be more confident that we will increase this metric because we have a portfolio of initiatives designed to improve it.”
Joshua Slone
Content Manager at LeadFuze
“Use only the data that matters.”
“If sending unsolicited emails helps you schedule meetings, make sure your open rates are improving. If reps are closing 5% of quality phone conversations, strive to engage in five quality conversations each day. But don’t waste time on metrics that definitely don’t move prospects toward closing. Taking the time to uncover the two or three most impactful metrics helps you and your reps make progress.”
We asked some experts which sales metrics they think are most important in the industry.
Daniel Disney
Founder of The Daily Sales .
“The most important sales metric a company should measure is customer satisfaction during and after the sales process.”
“Sales measurement is obviously a very important indicator, however, it often encourages salespeople to focus only on selling.”
“This pressure can sometimes lead salespeople to not pay enough attention to the customer experience, often pushing too hard to make a quick sale. By focusing on the customer experience, they increase their chances of winning long-term customers rather than short-term deals.”
Matt Heinz
Founder of Heinz Marketing .
“All performance metrics are revenue-based. Why do we do what we do and why does it matter? Revenue is the answer to both questions. A good metric that serves as a “compass” to guide us should be as revenue-based as possible.”
Peter Caputa
CEO of Databox .
“The most important sales metric we track is our record of paid conversion rate.”
“We calculate this metric by dividing the number of product registrations (as measured by Mixpanel) by the number of sessions on our website.
“Since we offer a free version forever and a free trial of our paid plans, many of our new users are able to set up our software on their own. As a result, many of our new customers purchase our product with just a little help from us.”
“We may have a few quick chats with them to answer some specific questions or a call to help them get set up, but we rarely find out their decision-making process or qualify them on budget, like in a traditional sale.
“Therefore, to optimize our conversion rate, our product support, marketing, and pre-sales teams need to work together on initiatives. Our paid conversion rate tracking helps us measure the impact of all these initiatives.
“For example, our product team identified that 20% of our signups are trying to set up one of our more complicated features, and 95% of them give up when trying to figure it out. So the team is building a new onboarding process to make it easier to set up that specific feature.
“Once the product team rolls it out, marketing will help us launch it and our sales and support team will help us get feedback.
“Additionally, our pre-sales support team has a separate initiative to offer overseas chinese in worldwide data more aggressive setup assistance with Zoom screen sharing calls, as we know our close rate increases when we have a call with a test user. Marketing will help us craft the messaging that sets up those calls.”
“Marketing is also creating content to educate users on how to set up the app on their own. Our sales team is helping them discover that content and they work with our product team to deliver it to users in the app.
“Conversion, which is a paid enrollment metric, is key because everyone can influence it. With initiatives designed to improve just one number, executed by different teams, we can get everyone to collaborate better. When multiple projects succeed, we can celebrate together. We can also be more confident that we will increase this metric because we have a portfolio of initiatives designed to improve it.”
Joshua Slone
Content Manager at LeadFuze
“Use only the data that matters.”
“If sending unsolicited emails helps you schedule meetings, make sure your open rates are improving. If reps are closing 5% of quality phone conversations, strive to engage in five quality conversations each day. But don’t waste time on metrics that definitely don’t move prospects toward closing. Taking the time to uncover the two or three most impactful metrics helps you and your reps make progress.”