3 Basic & Necessary Sales Metrics – What you need to analyse your sales reps performance

For successful sales management it is very important to keep track of metrics that can help you analyse how your work is moving forward. Evaluating data and creating measurable and realistic objectives are an absolute must have for success in the long term.

There are of course many different data points that one could look at in order to make different assessments of performance. In this post, I only wanted to focus on the three most basic numbers that can help you work on new customer acquisition performance analysis.

The top three metrics are:

  • Sales cycles
  • Conversion rates
  • Average deal size

To make sense of these metrics, the numbers need to be analysed against each other. Let’s use a basic example to see how this would work:

RepA and RepB both have a Conversion Rate (CR) of 10%.

If we only look at the CRs, we would think that the performance of these two people is exactly the same. However, let’s see how this perception could change if we introduce data about their sales cycles as well:

Let’s imagine that RepA closes deals in 30 days while RepB closes them in 45 days. This difference in sales cycle could indicate that RepA is better at getting quick commitment from his/her clients, or better at pipeline management, etc. This would make RepA more efficient than RepB as he/she is closing more deals in less time.

Now, let’s add another dimension and imagine that the average deal size of RepA is $5,000 while the average deal size of RepB is $10,000.

With this new data we can see that RepB is able create 100% more revenue per client than RepA in just 50% extra time.  Considering this data it is probably RepB who is more efficient this time as he/she is closing more revenue than RepA in less time.

Whether you think that RepA or RepB is doing a better job will depend on what priorities, targets, strategies and so on you have for your business. Perhaps you prefer longer sales cycles if yield per customer is higher, perhaps you don’t care about that and prefer the more transactional, lower value, higher quantity sale. Either way, the goals you set for your team and how you are evaluating success will depend on how to look at, compare and contrast this data.

It could be that RepA is working on smaller accounts with lower revenue potential and less complex Decision Making Units.  It can also be that he/she is working on a similar customer base as RepB but prefers working on quantity and let the Customer Success team do the up-selling. It might also be that he/she is not able to communicate the value of all solutions effectively and clients are only going for one product instead of 2 or 3, and the list goes on.  It is your job as a manager to look into these numbers and create strategies to maximise results based on what you want for your business, what you see in your numbers and by listening to what your team has to contribute on the subject.

Metrics like the ones used in this simple example some on of your best tool to analyse and diagnose what is happening in your team. Only by understanding these numbers and their implications will you be able to create effective and measurable strategies and set goals that adapt to your reality in business.

reading metrics

 

 

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