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Sales Performance Metrics: A Quick Rundown
In dynamic times and volatile markets, the most effective sales strategies may differ from day to day. Finding the right software for the right buyers at the right time can be an incredibly time-consuming process, at least if you do not have the right technology at your side.
Data software enables a business to monitor and understand every aspect of their sales process. It can collect information down to the most minute changes and choices and analyze it to generate insights and predictive models which help drive intelligent decision-making. There exist virtually infinite metrics related to sales performance which, together, determine the outcome of a quarter and the success of a business. Knowing what the most significant metrics are, how they’re measured, and how to act on them is a core part of business strategy in the digital age.
Companies spend millions of dollars annually to obtain, condense, and interpret these data with the help of software, analysts, and managers. Specifically, Gartner recently predicted that IT spending among businesses would soar to $4 trillion in 2021.
While the process may be complex and require a great deal of resources, knowing how to measure sales performance metrics has become vital to remaining competitive and profitable in any field of business. Without the proper tools, not only will competitors outpace you in terms of technological and consumer knowledge, you won’t be able to reach out to your customers at all.
Needless to say, understanding sales performance metrics is a necessary part of running a thriving business; in this article we will discuss some of the basic tools, tactics, and benefits of performance analysis. We’ll talk about sales KPIs, what they are and how they can help in optimization and planning; we’ll talk about several types of metrics including those relating to revenue and b2b; and, finally, we’ll talk about dashboards and other types of visualization software and how they can be used to make the data work for you.
Sales intelligence software is built to capture every bit of data about your sales process. However, not all metrics are equally relevant for data-driven decision making and sales optimization.
Key performance indicators or KPIs are those metrics which are especially relevant to and indicative of the efficacy of a sales team and pipeline. Sales KPIs are the most important things to monitor in order to understand what is and isn’t working in your sales strategy and determine overall success.
The sales metrics which are treated as KPIs will vary from company to company, but here are a few of the most commonly tracked KPIs and what they measure.
This is a simple measure of the net profits a company accrues from sales during a particular period. It is the most basic determinant of a company’s success.
This metric pertains to the number of clients your business attracts compared to the total number of potential buyers in the market.
This measures the resources expended to make each sale. It helps determine the ratio between the costs and profits of each deal closed.
This metric tracks the number of prospects you are losing to rival companies. It indicates the efficacy of both your own sales team and your competitors’ strategies.
Product Line Performance:
This metric helps you determine which of your product/service offerings are performing best and which could benefit from better design, differentiation, or marketing.
Sales KPI tracking is one of the most important aspects of sales. These indicators represent the pulse of your company and are under constant monitoring by managers. Visualizing this priority data is made easy with the help of a sales KPI dashboard. This is a helpful tool that presents large amounts of data in a straightforward graphical interface which helps enable quick and effective decision making.
Among all companies’ lists of KPIs will be several metrics pertaining to revenue. Knowing how much your business is making through sales is extremely important both for diagnostic reasons and future budget planning. You’ll be able to identify opportunities in your sales pipeline and know which projects and strategies to fund in the future.
Revenue metrics come in all shapes and sizes, and whether a revenue KPI will make it onto your business metrics dashboard depends on your sales model. Here are some of the aspects of revenue most commonly tracked by managers.
Sales Cycle Length
This metric measures how long, on average, prospects remain in the sales pipeline from qualification until the closing of a deal.
Wins Per Period
This simply tells a business how many deals are being closed in a given period. It is the most basic measurement of your sales team’s performance.
This is a good way to measure the performance of individual links in a sales team. It indicates how many deals a representative has closed but can also include how quickly these sales were achieved and how much each was worth on average.
Conversion rate indicates the percentage of prospects who engaged with your business in some way (website visits/emails/phone calls) ended up buying your products in the end.
This metric can be measured in different ways, but generally is meant to track how many of your clients continue to use your services as time goes on instead of switching to a competitor.
We already mentioned this above, but knowing what costs are incurred as part of each deal is vital to accurate revenue forecasting.
The more metrics you track, the more accurate your revenue predictions will be. However, often it is more convenient to track only a few important KPIs and investigate deeper if a problem is detected.
B2B Sales Metrics
Business-to-business sales can be complex, and performance software can help keep track of the various metrics relating to contact, conversations, pipeline cycles and stages, and conversions.
B2B sales metrics often have to do with the interactions between sales reps and potential clients, and the leading indicators for b2b sales can sometimes be extremely subtle. Contact media like email or phone calls, lengths of in-person or virtual meetings, discounts and special deals offered, and types of leads or CTAs utilized can all affect deal outcomes. Treating these as B2B metrics and measuring them statistically can, in the long run, have a big impact on the way you structure individual pitches and your pipeline in the future.
Pipeline stages can also be analyzed in and of themselves. Stages where deals are stagnating for long periods or where a disproportionate number of deals are falling through can be targeted for improvement and restructuring. Agility is vital for businesses hoping to remain competitive and relevant in shifting markets.
When analyzing conversion properties, B2B marketing metrics are especially important. Knowing what kinds of advertisements and marketing strategies make prospects convert is necessary in order to prevent wasting money on ineffective campaigns; it can also help you better understand the needs and preferences of your base. Keeping an eye on the marketing side of things is just as important for sales as looking at your pipeline.
Sales Metrics Dashboard
The quantity of data that can be extracted from your business enterprise using current technology is enormous. In order for sales and intelligence managers to most effectively use this data for decision making and strategy crafting, it has to be consolidated and condensed first.
This is where sales dashboards and other visualization tools come in. As briefly mentioned above, these are programs which take the most relevant and pressing data and display them as straightforward graphics and charts. Dashboards are absolutely vital to the kind of rapid decision-making which undergirds modern high-speed sales initiatives.
Companies specializing in sales solutions usually include visualization tools as part of their software suites. Canopy offers some of the most advanced programs for KPI and sales data monitoring. Their sales metrics dashboard can take the most disparate, complex, and volatile data and make it simple and straightforward. Canopy’s tools are also versatile and can be organized and configured to suit any role.
You can even have multiple dashboards for different applications; you could build a general sales dashboard, a marketing/demand dashboard, and a sales rep dashboard and toggle between them as needed. With Canopy, you can cover every facet of the sales process and keep on top of every opportunity for success and improvement.
Sales Team Performance Dashboard
Finally, one of the most important things to consider in striving to improve and optimize your sales apparatus is the performance of each individual which makes up your sales team.
A sales metrics template for each of your sales reps might include things like how many sales they’ve made in a given period, what kinds of prospects they’ve been the most successful at converting, which pipeline stages they spend the most and least time in, what conversational techniques they use, and what percentage of deals they lose.
Knowing and tracking these aspects of individual sales reps can help you determine who your top performers are and who is struggling. This way, improvement techniques and training can be customized and personalized to optimize your team while also saving on time and resources.
Like any other group of metrics, these data can be collected together in a sales team performance dashboard for easy monitoring and information streamlining. Managers can monitor the progress of big deals, identify trouble areas, and reward group efforts.
These and many other analysis and decision-making abilities are within easy reach of companies that incorporate performance monitoring software into their sales model. To see how Canopy’s industry-leading digital data suite can help you build a better business and thrive in moving markets, schedule a demo today.