Important Metrics You Must Use to Measure your B2B Sales Performance
September 22nd 2021
Sales Best Practices
B2B Sales Performance Metrics
Traditionally the essentials for higher revenue growth include a performing team, optimized processes, and a working strategy. The primary focus of sales-driven organizations is closing more deals. Sales has been a high risk process but it is essential to scale a business. Evaluating sales performance helps in improving strategies, processes, and the overall performance of sales teams. Sales metrics help in data-driven decision-making for closing more deals. In this blog we will uncover the most important metrics that you must track to measure your B2B sales performance.

Table of Contents:

  • What are sales metrics and why are we tracking them?
  • What are the important metrics you must measure to track your B2B sales performance?
    • Sales productivity metrics
    • Pipeline
    • Conversion rate
    • Win rate
    • Source of new leads
    • Lead opportunities
    • Customer Acquisition Cost (CAC)
    • Customer lifetime value (CLV)
    • Sales cycle
    • Average sales price
    • Average response time
    • Pipeline velocity
    • Key performance indicators
    • Churn rate
    • Sales by region

What are Sales Metrics and Why are we Tracking them?

It’s difficult to manage when you can’t measure. Sales metrics are performance indicators for any organization. Tracking sales metrics help you increase overall efficiency by identifying ideal prospects, sales team performance, identify the right goals, and more. It increases the team productivity and plays an essential role in revenue growth.

You can assess financial factors and drive the entire organization together towards a common goal. It identifies issues and concerns that might affect the organization. Optimizing your sales strategies based on metrics can help in data-driven decision making. Other reasons why tracking sales metrics are important:

  • When sales metrics are easily accessible, you can identify engaged prospects and focus on closing more deals.
  • It provides you with sales performance metrics to enhance the overall experience.
  • Since the risk of failure is high, sales decisions need to be data-driven and not based on intuitions.
  • Sales metrics can help in improving sales strategies by identifying the most successful techniques that help in closing more deals.

What are the Important Metrics you Must Measure to Track B2B Sales Performance?

Sales metrics help you keep a track of your team’s performance, company’s progress, and prepare you for future trends. It is essential to use the right set of metrics to ensure company-wide growth. Here are some Important Sales Metrics to Track:

Sales Productivity Metrics

Sales productivity is the rate at which sales representatives reach their revenue targets. It is a key evaluation factor for sales representatives’ performance. You can expand your sales outreach, identify your target audience, and improve the overall sales productivity with sales productivity metrics. The different aspects to determine sales productivity include the following:

  • percentage of time spent on product demos
  • time spent on content creation
  • percentage of high quality lead follow-ups
  • percentage of marketing resources used
  • number of sales tools used
  • average time spent on using sales applications and tools

Pipeline Metrics

Sales pipeline helps in understanding what’s working and the non-functional aspects of your sales process. It is like a map that informs about the prospect’s progress in the sales process. It indicates current and future opportunities for the organization. A healthy pipeline can help you in many ways including:

  • Anticipate future business outcomes.
  • Improve sales strategies.
  • Evaluate the gap between your current position and your desired goals.
  • Eradicate inefficiency in the sales process.
  • Manage resources and manpower in a better manner.

The different ways to measure pipeline performance include:

  • Avg. length of sales cycle: It is the time taken for prospects to cover the sales journey until they become customers.
  • Open opportunities: It is the number of deals in the pipeline to get closed.
  • Closed opportunities: Number of deals closed by the sales team.
  • Weighted pipeline value: It is the estimated value of deals that move through the pipeline.
  • Total sales value: Total income exclusively from direct sales.
  • Annual contract value: It is the amount of revenue a contract generates in a year.

Conversion Rate

It shows the conversion of marketing qualified leads (MQL) to sales qualified lead (SQL). It helps in drawing out how many marketing leads are of quality. It is essential to determine the effectiveness of your organization's marketing input.

  • MQL is the point where you receive interest regarding your product in any form prescribed. Whereas,
  • SQL is the stage where the lead is good enough or is declared eligible to come in contact with the salesperson of the organization.

The effectiveness can be seen by keeping MQL data parallel to data from SQL and improving sales and marketing compatibility.

Win Rate

It is used to calculate the opportunities won against the opportunities lost. Won opportunities are the ones that have ended as a complete sales process.

Win Rate = Won opportunities ÷ total opportunities (won+lost)

A strong win rate and consistency of the deals won is an essential success factor for your organisation. A close tracking of win rate can help your sales representatives to work on the elements that are not up to the mark.

Source of New Leads

Identifying the source of new leads can help you allocate your sales representatives better.

Finding a lead source is the first step of any sales process, this is where your engagement with customers begins. Tracking this will help you:

  • Identify the source of most numbers of leads.
  • Determine where to allocate your sales team.
  • Improve overall customer satisfaction.
  • Shorten your sales cycle.

Some of the possible lead sources could be:

  • Social media platforms
  • Email newsletters and direct mails
  • Reference from past customers
  • Database collected by sales representatives over time

Lead Opportunities

Attaining leads and converting them into actual sales is a difficult process. Efficient tracking of lead opportunities can help devise an effective database for your sales representatives.

Customer Acquisition Cost (CAC)

CAC is the method to calculate the rate of conversion of prospects into a customer. It is used to calculate the ROI (return on investment) for the organization.

CAC = Money spent on acquiring customers (over a period) ÷ Total number of customers actually acquired (during the period)

Constantly tracking CAC will help you:

  • Improve the return on investment.
  • Analyse value per customer.
  • Substantially improve your profit margins.

Customer Lifetime Value (CLV)

It keeps a track of how much time a customer is spending or spends over your business relationship. It will help in improving your sales strategies. Higher CLV will incentivise customers to bring more revenue.

Optimise CLV by keeping low churn rate by maintaining good rapport with your customers, providing loyalty incentives, and other similar activities.

Sales Cycle

The length of your sales cycle is an important metric. It is the time taken from the first stage of the sales process to the last stage or deal closure. This assessment will reflect on your decision making.

Evaluating the length of sales cycle and comparing it with the average time taken conventionally in the industry can help you acquire more leads. Sales cycle length in check can boost your effectiveness and helps in targeting leads that are getting cold.

Sales cycle length could be conventional, short and long:

  • Conventional sales cycle length is the typical time taken to complete the sales process in the industry.
  • Long sales cycle can be as long as 12 months.
  • Short sales cycles can range from 1 month to 4 months.

Every organisation has their own unique sales cycle and it is important to understand the stages involved in your sales cycle. Common stages followed in sales cycles:

  • Sales prospecting
  • Qualifying leads
  • Making offer
  • Closing deal

Average Sales Price

As the name suggests, ASP is the average price at which a product is sold. It will help you benchmark your product with the companies selling the same product or services. You can calculate either on a monthly or yearly basis.

Tracking it can also help you:

  • Improve your sales strategies.
  • Change your marketing strategies.
  • MImprove your database with regard to customer choices.

Average Response Time

Time is of valuable essence, and response time for a lead can affect the sales performance. This metric helps improve the average time of follow up on a lead. The following tools can help in improving average response time and keeping your leads engaged.

  • Social media presence can help you make your response faster.
  • Email automation can help with segregating important inquiries and increasing efficiency.
  • Live chat features will help sales representatives connect with leads in real time.

Pipeline Velocity

It is used to calculate the time consumption of the entire sales process. It involves two aspects of the process, prospects and opportunities. More time consumed in the process to reach from start to end will result in losing more opportunities in the way of this process.

Sales velocity = (Number of opportunities x Deal value x Win rate) ÷ Length of sales cycle

Key Performance Indicators

They highlight the relation between performance of the sales teams to the growth of the organization. This metric identifies the potential for growth. The most crucial key performance indicators (KPIs) can be:

  • Total amount of revenue during a certain time which can be tracked monthly.
  • Sales by product can help you track sales of every product category individually.
  • Net profit margin can assess how much profit will be generated.

Churn Rate

Churn rate = (Users at beginning - User at end) ÷ Users at beginning

Churn rate will help you to keep a track of the number of customers lost during a specific period. Gross churn rate will keep a track of the pattern of your customer base churn rate. A high churn rate can hamper your sales performance. Tracking churn rate will also help you in:

  • Tracking why you are losing business.
  • Improving customer satisfaction.
  • Tracking customer retention.

Your churn rate could be high for possible reasons like poor customer service, lack of proper instructions, weak customer engagement, etc. You can improve your churn rate by:

  • Collecting regular feedback, often the reason for losing customers is poor customer satisfaction.
  • Maintaining customer service to deal with customers problems with ease.
  • Using the FAQ section to provide manuals, important information and various contents of relevance.

Sales By Region

Identifying the region from where most of the sales are being generated will guide you to your target markets. It will help you grow further in the targeted region.

Keeping a track of this metric will help you:

  • Understand your customer base to improve and modify your solutions.
  • Track your sales goals globally.
  • Identify the reasons for the most sales generation.
  • Allocate the work force better to enhance productivity.

Key Takeaways

Sales metrics are the factors that will help you formulate a strategic plan to ensure efficiency and regularize improvements. Designing a suitable set of metrics will guide the organization in achieving a track of faults, progress, work in progress, areas that need immediate attention, etc. Metrics tracking will tell you the efficiency of the overall sales process, setting the organization on the correct path.

Taruman Chahal
Contributing Writer
Taruman Chahal
Contributing Writer
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