When it comes to evaluating your sales and marketing processes, there are a handful of metrics that can sum up the entirety of your performance. These deal with either total top-line revenue or the profitability of new deals. And while they’re supremely important, they’re also somewhat opaque. They cover a wide range of related activities and events, but until you become more granular, you won’t have the insight needed to move the needle on the high-level metrics.
So, what metrics should you look at in addition to the overall success metrics? Here are 10 sometimes forgotten metrics that can help put sales performance into context, provide ideas for improvement, and sound the alarm on potential problems before it's too late.
1. Quota Attainment Average
Not only is this metric a measurement of your reps’ success in a given period, but it’s also a measurement of sales management’s effectiveness in forecasting and establishing goals. Did everyone make their goal? That could be great — or it could mean you need to establish more challenging quotas.
Did almost no one make their goals? You may be too ambitious in your sales objectives. Use this percentage in conjunction with other sales performance indicators to determine whether your quota setting process needs fixing, or if your reps simply had a great or awful quarter.
2. Average New Deal Size
Deal size indicates whether your sales reps are closing the right size customers for your business objectives. It also indicates how well they’re up-selling and cross-selling those customers in the initial deal. Conversely, it can also indicate how much discount they’re applying to their deals. A quarter in which deal numbers increase but average new deal size falls is a warning sign that suggests you should pay attention to coaching and training to protect margin and to use tools like CPQ to find the right up-selling opportunities.
3. Average Quote Size
While it serves to illustrate the volume of business your reps are working on, the total value of your quotes can be even more informative when taken in relation to average deal size. For example, if your average quote size is close to average deal size for a period, you can confidently assume that sales reps are delivering quotes that are on target for what customers want with discounts that customers are satisfied with, and they’re doing it early in the quote process.
If average quote size is significantly larger than average deal size, your reps are probably creating multiple quotes per deal, missing customer expectations and dragging out the sales cycle, which damages the long-term prospects for repeat deals with that customer.
4. Lead Response Time
Following up on a digitally-generated lead quickly can dramatically boost conversion rates. Various sources have reported this phenomena. And while the numbers vary wildly throughout the reports, they all show that a follow-up in the first hour after generation. Even with leads sourced from traditional sources, with longer response time, a rapid response is vital to ensure the highest chance of conversion once a lead has been scored as ready for sales’ attention.
Lead response time allows you to track this number and to understand the productivity of sales and marketing. Is sales jumping on hot leads immediately, or is a backlog developing that’s driving up lead response times? If that number is inching up, it may suggest a sales productivity problem, or it may be the result of marketing passing too many leads for sales to handle (which may indicate a decline in lead quality).
5. Meetings Booked vs. Deals Closed
The time devoted to customer meetings can be considerable. A study by the Ovation Group found that securing a meeting took an average of 6.25 hours, which means just scheduling three meetings a week takes up about 19 hours or nearly half a week. That doesn’t include the time spent in the meetings themselves. Time is a rare commodity, so it’s vital to maximize the number of meetings that pay off in deals. This metric helps you understand not just the raw numbers of deals and meetings but also sheds light on how salespeople are spending their time, and how effective individual sales people are when they’re in front of the customer.
6. Marketing Collateral Usage Rate
The measurement of collateral usage is becoming a science unto itself, but on a basic level it’s important to understand how sales is using it — or even if sales is using it. If the collateral is getting utilized very few times by sales, it’s time to investigate whether the material is useful, whether your sales enablement solution is allowing sales reps to find what they need efficiently, or whether sales has simply gotten out of the practice of leveraging your marketing content.
Conversely, if the number is particularly high, it could indicate that your enablement system makes it hard for sales reps to find what they need and so they’re firing salvos of content — which may or may not be appropriate for the customer — in order to satisfy customer requests for information. In either event, this metric serves as a check of your sales enablement effectiveness and could lead to either a revamped enablement structure or the creation of content that’s more germane to what your customers are asking for.
7. Opportunity Win Rate
A straightforward measurement of your sales team’s ability to best its competition, opportunity win rate really examines two things: your sales team’s selling abilities, and your product’s competitiveness in the market. Examining this number in conjunction with other metrics can reveal why your win rate might be lower than expected. Conversely, a higher than expected win rate combined with a lower than expected number of meetings or leads handled in the same period might suggest that sales reps are spending more time per deal than they should be spending and there’s a need to increase coaching or add sales tools to increase productivity.
8. Open Opportunities (By Rep and in Total)
The number of opportunities open at any one time is something of a “Goldilocks number” — too few is bad, too many is bad. Ideally, reps are working a number that is “just right” for the market they’re working.
Too few indicates lead flow issues, or a problem with sales skills on the part of the rep. Too many may indicate that the sales rep is not spending enough time with the right opportunities, damaging his or her ability to close deals. Measuring in total provides a useful baseline for the sales force, but measuring on a rep-by-rep basis allows sales managers to see what each rep is doing, draw comparisons and create best practices for the entire sales team.
9. Sales by Lead Source
This combination of sales data with marketing data might at first blush seem like something that’s of primary importance to marketing. Think again: if sales can help marketing identify lucrative lead sources, marketing can shift resources to fully exploit those sources and deliver more quality leads to sales. For sales reps working with systems that provide them with lead acquisition information, this number can also provide a cheat sheet about which leads may be more qualified than others.
Beyond the benefits to sales, this metric can also help improve marketing ROI and enable marketing to turn off lead sources that aren’t producing, freeing up budget to pursue leads from other sources.
10. Incentive Earned vs. Quota Achieved
Tracked over time, this metric can reveal whether your compensation plans are incentivizing the results your company expects from the sales staff. Salespeople do the things that earn them money, and if your compensation plan is designed badly, they may be able to make the money they want without achieving the objectives you want.
For example, too many sales performance incentive funds, bonuses and rewards may take your sales team’s eyes off you broader sales goals. They’ll earn the money fair and square by the rules of your sales plan, but that may not translate into making quota. Tracking this number over time will help you fine tune your incentive compensation plans and enable you to adjust to encourage the right sales behaviors.