Five Sales Metrics You Should be Tracking with CRM Analytics
The sales metrics you should track through your CRM are largely a result of what business you’re in. An online sock retailer is likely to focus on different metrics to a company chartering commercial submarines but many of the principles are the same. There are potential buyers who need to be sold to, and a good CRM analytics dashboard should give managers the information they need to re-evaluate the efficiency of their sales team. Let’s take a look at five common sales metrics that most businesses should be tracking in one form or another.
How many leads or opportunities lead to one sale? This question is important to determine the efficiency of the sales process. Different industries will have different yardsticks to measure performance. Once a baseline of ‘good’ and ‘bad’ performance is decided upon, then this can be measured. There is often discussion around what constitutes a lead, with sales reps keen to increase their conversion percentage by judging certain leads to be worthless. It is worth spending time making clear what constitutes a lead.
Length of Sales Cycle
The length of time it takes for a lead to go from entering the sales funnel to being closed is a good indicator of sales performance. The sales cycle time a rep achieved should be taken in context, as they may close a high number of leads but have a long sales cycle time. This may be because they are tenacious and thorough. A good sales manager will view the data as a starting point before reviewing the whole picture.
Average Deal Size
Again, this is very industry dependent and needs to be taken in context. A baseline should be developed which can either be an average, or it can be more effective to categorize different types of deal: for example small, medium, and large, then look at the ratios of the sales rep. The metric allows sales managers to steer sales reps towards the right blend of deals for that business. It could be that it is a business where sales reps literally need to close three deals a year or it may be one where there are a few big deals but a vase of small and medium ones.
Customer Lifetime Value
Looking at how much a customer is worth over a period of time is a useful way of evaluating the sales team, and also the account manager who looks after the client. This is a critical metric and if it isn’t being hit then sales managers generally want to look deeper into the issue, because businesses thrive off these recurring revenues. Sometimes the problem is with the sales teams not delivering the right type of customers; at other times it is poor account management.
Open Opportunities per Sales Rep
It’s important that reps a) have the appropriate workload, and b) are moving opportunities down the funnel properly. A large number of open opportunities can be problematic in many ways, primarily they are difficult to manage, but of greater concern to the sales manager is the reason for a bloated sales funnel: perhaps leads are not being closed quickly enough or they’re not being closed out once they’ve been exhausted. A manager must get to the bottom of this so a reps time can be utilized effectively and their performance optimized.
How to build a data-driven strategy with CRM
Maximize the return you get from your CRM data analytics features
Three sales technology developments to expect this year
What advances can we expect in sales technology over the course of 2018
Three essential CRM reports for sales managers’ dashboards
Identify key improvement areas and keep as well informed as possible with these reports