The revenue generated by each rep is the number one key performance metric by which sales managers judge success, but revenue is a product of a number of factors. Focusing too much on quota while disregarding other KPIs can be detrimental. Measuring a robust set of metrics allows sales managers to have a firm grasp on what’s happening with their team at all stages of the sales cycle, and helps identify coaching opportunities for reps on the verge of a slump. These are some of the sales metrics you should be focused on to help prove success.
“Measuring the right metrics is a challenge and something we have modified over time. Results tell the real story and activity builds to the results. Balance how much time you spend on measuring the wrong activity, it can be a detour away from the results. At the end of the day, we want to know the profitability of the sale, not the revenue. We also want to know the net promoter of the client which indicates client satisfaction. Another key metric in our business is number of new clients and number of new job orders, then the fill ratio. Good luck and don’t be afraid to celebrate failure and change your measurement till you get it right!” says Sharon Tsao, CAO & EVP Sales, Marketing & Accounting, Contemporary Staffing.
Time Spent Selling
In sales, time is money. Every hour a sales rep must spend engaged activities that are not generating revenue means money lost. When evaluating time spent selling, sales managers must always be objective. If the problem is individual, coaching will be required. If the problem is organizational, sales managers must take steps to help remove the roadblocks.
Time to Close
Knowing the average time to close is critical for comparing the average time it takes for each rep to close a qualified lead. Reps that regularly take longer than average will need to be coached in investing their time in deals more likely to close quickly, or in overcoming bottlenecks in their process.
Closing Ratio
Moving a lead through the pipeline effectively means nothing if the deal does not ultimately close. Reps that are excellent at relationship building but not closing may be better suited for a development or account management role than a sales role.
Average Deal Size
Average deal size can paint a picture of how well reps are using their time. If they are spending lots of time on small deals, they are costing the company money rather than generating revenue. If the majority of reps are closing small deals, the problem could be one of lead quality, so the entire picture must be examined.
Action Metrics
Deals don’t close by magic; they require ongoing action. Sales managers should be evaluating performance in action metrics just as closely was outcomes. Action-based goals are typically set for a specified time period (per day, per week, per month, per quarter, etc.) and include numbers like: prospecting calls made, Outreach emails sent, first contact made, follow-up emails sent, meetings scheduled, meetings conducted, proposals sent, etc. Reps that aren’t closing deals are likely struggling in one or more of these areas.
Employee Satisfaction
Happy and engaged sales reps are successful sales reps, and employee satisfaction is a key metric that can shine a light on the overall health of the sales culture. Monitoring satisfaction can also provide early warning signs that performance may slip or that reps may look for new job opportunities. High satisfaction numbers translate to high retention and high revenue numbers.
If you are looking for new ways to attract and retain top salespeople and sales managers who can help your organization achieve its revenue goals, the expert recruiters at CSS ProSearch can help. Contact us today to learn more about the ways in which we can help you cultivate a productive and profit-generating team.