Sales is not an easy task. It’s a process which requires a lot of effort. Companies develop various strategies and tactics to sell their products and services. But it’s not necessary that all these strategies applied will work successfully.
The success of these strategies and tactics can be measured through sales metrics. In this article, we will try to understand what are sales metrics and some of the key sales metrics that can be tracked to measure sales performance.
What are Sales Metrics?
Sales Metrics are data points which reflect the performance of a sales representative, sales team, and even the entire organisation. On the basis of these sales metrics company is able to determine how much progress they are making. It also helps in assessing future growth, incentives etc.
Key Sales Metrics You Need to Know
Here are some of the key sales metrics that a company considers while tracking the performance and success of sales strategy.
- Number of Leads Generated
Firstly, you need to go through the total number of leads generated by your company. This is done by joint efforts of sales, marketing and advertising teams. Try to assess these leads. You need to see whether the leads that are being generated are converting into sales or not. If they are converting in good amounts then the sales strategy is going successful.
- Lead Response Rate
After you have the lead, now is the time to respond to it. If you don’t respond or take necessary action then the lead will be irrelevant. You need to evaluate how often the leads received respond positively when contacted. If the response ratio is good enough then you need not worry.
- Time Spent on Selling
Total time spent on selling a product or service is a qualitative measure. This majorly depends on how the tasks are assigned to the sales team. The sales team is involved in various tasks like finding new leads, taking follow-up and closing the sale. Now if the team wastes a lot of time on administrative tasks, then that needs to be addressed.
- Total Revenue
Total revenue or gross sales is an important metric determining the financial success of the company. Total revenue means the overall income of the company from all operational and sales activities. It helps in determining the progress of the company. On the basis of total revenue, the company can take decisions regarding increasing profit and sales.
Total Revenue = Quantity of products and services sold × Price of the product or service
- Revenue by Product or Service
The income generated by selling per product or service is defined as revenue per product or service. It helps the company to track which products and services are performing well. You can determine which products are the least and most profitable on the basis of this metric. Necessary changes can then be made in the product mix to maximise profit.
- Win Rate
Win rate is a ratio determining the number of successful deals as compared to the total deals received. This ratio helps in assessing the sales effectiveness of the sales team. This can be evaluated at the team level as well as the individual level.
- Quota Attainment
Quota attainment helps to determine whether the sales representative has reached the sales quota in the given time or not. This is an important metric for companies. As low quota attainment means the sales team is lacking certain things.
After reading this article, you have got a basic idea about important sales metrics. You can use various sales tracking tools to understand the sales metrics. You can also make necessary changes if required in the sales strategy if the need arises.