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Sales metrics definition: What are the most important metrics and why?

Every good salesperson knows that, although selling is about more than just metrics, the right data, used in the right way, always has a positive effect on performance and results.

So, what are sales metrics? Let’s define what metrics are in the world of sales.

The term sales metrics refers to the key performance indicators (KPIs) an organization, individual or team monitors to gauge overall business performance. Team leaders use sales performance metrics to determine progress and monitor goals and objectives.

We asked some experts what key sales metrics they think are the most important in the industry and what the concept of metrics means to them.

Daniel Disney

Founder of The Daily Sales.

“The most important sales metric that an organization should measure is customer satisfaction during and after the sales process.”

“Measuring sales is obviously a very important metric, however, it often encourages salespeople to only focus on the sale.

“This pressure can sometimes lead salespeople to not give enough attention to the customer experience, sometimes only pushing for a quick sale. By focusing on the customer experience, you increase the chance of winning long-term customers over short-term deals.”

Matt Heinz

Founder of Heinz Marketing.

“All performance metrics start and end with revenue. Why are we doing it and why does it matter? Revenue is the answer to both of those questions. A good ‘true north’ metric should be as close to revenue as possible.”

Peter Caputa

CEO of Databox.

“The most important sales metric we track is our sign-up to paid conversion rate.”

“We calculate this metric by dividing the number of product sign-ups (as measured by Mixpanel) with the number of Sessions on our website.

“Given we offer both a free forever version 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 only a bit of assistance from us.

“We may have a few quick chats with them to answer some specific questions or a call with them to help them do some set-up but we rarely uncover their decision-making process or qualify them on budget, like in a traditional sale.

“So, in order to optimize our conversion rate, our product, marketing and pre-sales support teams must work together on initiatives. Our sign-up to paid conversion rate helps us measure the impact of all of these initiatives.

“For example, our product team identified that 20% of our sign-ups try to set up one of our more complicated features and that 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 that specific feature up.

“When the product team rolls this 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 more aggressively offer set-up assistance over a Zoom screen-share call, since we know that our close rate increases when we have a call with a trial user. Marketing will help us craft the messages that book those calls.

“Marketing will also be creating content that educates users about how to get themselves set up. Our sales team is helping them figure out that content and they’ll work with our product team to deliver it to users in-app.

“Signup to Paid Conversion is a great metric since everyone can impact it. With initiatives designed to improve just one number, but executed by different teams, we can get everyone collaborating better. When multiple projects work out, we can celebrate together. We can also be more sure that we’ll increase this one metric because we have a portfolio of initiatives designed to improve it.”

Joshua Slone

Content Manager at LeadFuze.

“Only use the data that matters.”

“If cold emailing leads helps you book meetings, make sure open rates are improving. If reps are closing 5% of quality phone conversations, strive for five quality conversations each day. But don’t waste time on metrics that don’t definitively send leads down the line. Taking the time to figure out the two or three most solid metrics helps you and your reps move the needle.”

Tim White

Director of Demand Generator at People.ai.

“Setting goals and benchmarking activities, like the velocity of meetings booked and customer response times, against the team’s top performers can help drive and measure desired sales effectiveness and behaviors from the rest of the team.”

“But, not all reps need to be monitored in the same way.

“For younger sales reps, managers need to monitor more tactical behavior such as the number of calls, and the number of emails in order to monitor the quantity of activity.

“With a more seasoned team, a manager might want to monitor which roles are being engaged at each stage of the sales process. Measuring your team with the appropriate metrics will not only help them accelerate deals, but will also help keep them from feeling like they’re being micromanaged.”

Sales metrics definition summed up

Defining what sales metrics matter to your organization is a huge part of understanding the performance of your sales team. Setting out your goals and benchmarks, and those of individuals, helps keep everyone accountable and motivated in the long run.

If you’re a sales manager, make sure to clearly lay out your sales performance metrics at the beginning of sales periods. Set up meetings to explain benchmarks, expectations and rewards for hitting sales goals and sales performance measurement goals.

Read our article on setting up a sales dashboard and using it to monitor sales metrics and team performance for more guidance.

If you want to get insight into the most important sales metrics in your arsenal, check out Pipedrive’s updated Sales Insights and Reports feature, or sign up for a 14-day free trial.

Download Your Guide to Sales Performance Measurement

The must-read guide for any sales manager trying to track, forecast and minimize risk. Learn how to scale sales with data-backed decisions.

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