What are inside sales metrics?

Inside sales metrics help you measure the performance of the sales team. You can measure their effectiveness and efficiency to improve the process and methodologies to improve sales. The important metrics for your business and sales team depends on the key performance indicators that you want to consider. Aligning your sales KPIs to your strategic growth initiatives can help you streamline the selling motion, sales process, sales cycle, and more.

Examples growth initiatives that can be aligned with inside sales metrics are as follows:

• Expand market reach: To increase growth consistently, you need to increase the average deal size and average revenue per product or service sold. You can do this by expanding the market reach and closing more deals.
• Consistency: if you want your sales reps to reach their goals consistently, you need to focus on metrics and performance indicators like emails, phone calls, and meetings books.
• Scale at length: If you want to scale your business you need to decrease the length of the sales cycle while increasing the average revenue per product or service sold.

Some helpful inside sales metrics include

Annual recurring revenue (ARR)

ARR is the total amount of revenue earned every year. It helps you forecast revenue from customers in a fiscal year. It can be used to evaluate a company’s growth and provide long-term forecasting.

ARR = Total value of a contract ÷ No. of contract years

Variable Revenue ARR = No. of active licenses in a year x Avg. revenue per user (ARPU)

Conversion rate

Conversion rate is the percentage of qualified leads that result in closer-won deals. It helps in measuring the performance of your sales team based on the number of leads turning into customers. It enables you to improve the quality of leads by aligning the sales and marketing teams.

Conversion Rate = No. of leads converted into customers ÷ Total no. of qualified leads

Win rate

Win rate is the percentage of deals closed-won in a specific period. It helps in understanding the sales pipeline coverage required to reach your sales goals. Segmenting it by product, team, etc., can provide insight into the factors leading to varied performance.

Win rate = Total no. of won opportunities ÷ Total no. of closed opportunities (both won & lost)

Sales metrics help you formulate your strategy to ensure efficiency and consistency. There are several metrics that B2B businesses use to measure performance and other important factors. You can read more about it here