4 Sales Metrics Leaders Should Care About
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by | Dec 16, 2022 | Leader's Digest

Successful companies balance customer centricity with a deep understanding of what metrics leaders should measure for success. It’s unfortunately quite common for many sales leaders and sales organizations to evaluate the wrong metrics, leading to revenue, culture/morale, and management issues. Leaders should remind themselves that just because you can measure something doesn’t mean it’s worth measuring. Just because you can measure something doesn’t mean it has any value.

I was listening to a podcast recently, and the guest told a great story to illustrate this point. They spoke about a salesperson who outperformed his colleagues by almost two times. At the end of the year, though, he did not receive his entire bonus. How could that be? Well, his company measured mileage on the sales reps’ cars, and this individual did not put as many miles on his car as everybody else or as expected. The company CEO said, “You’re not working hard enough, so you don’t deserve a higher bonus.” In all reality, he was probably working way harder and was far more profitable; he had just figured out how to sell remotely. The moral of this story is: don’t be like this CEO. Measure the right metrics.

What Are Sales Metrics?

What are the right metrics? First, let’s define sales metrics. According to NetSuite, sales metrics are data points that measure and evaluate an individual, team, or company’s sales performance over time. Sales metrics help an organization analyze the success of its sales initiatives, as well as identify areas that might need improvement. They also inform sales strategies, monitor goals and objectives, track progress, and award incentives and bonuses while providing other critical business insights.

There is no single or standard measure of performance. How a leader measures the success of their salespeople will look different at every company, dependent on business goals, and can even change over time within one organization.

Here are four quick and simple sales metrics leaders need to understand for every sales professional on their team. While not the only metrics that matter, these four are critical from a sales performance standpoint and will help each team member on their path toward success.

4 Sales Metrics to Measure

  1. Number of opportunities in each sales professional’s pipeline at any given time
  2. Average value of those opportunities (measured in dollars, volume, margin, or however your organization does this)
  3. Win rate or closing %
  4. Average number of days it takes your sales team member to close an opportunity

If you can maximize these four, you will be well-positioned with a growth mindset. Take a moment to reflect on the metrics, numbers, and expectations you’ve set for your sales team. If, like the CEO in the story above, you find you are measuring the stupid stuff, now is the perfect time to adjust before heading into the new year.

There is plenty more to cover on this topic. For additional reading, here’s a thorough resource from HubSpot – The Ultimate Guide to Sales Metrics: What to Track, How to Track It, & Why.

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