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The Sales Metrics Every Company Should Track

A Comprehensive List of Common Sales Metrics

Every cockpit has dozens of flight instruments that provide pilots with all the information they need to fly and operate their airplanes successfully. Sales Metrics are the Sales Leader’s equivalent to flight instruments. Reporting on the effectiveness of the sales team, how well each rep is performing, where additional investments could yield the biggest results, and where to make cuts if necessary, Sales Metrics give Sales Leaders the information they need to operate their organization successfully.

In this blog post, we detail a long list of Sales Metrics, how to calculate them, and what they mean to the operation of your company.

Let’s take off.

What are Sales Metrics?

Sales Metrics are metrics that specifically aim to measure the efficacy of your sales operations. This means Sales Metrics are focused on the inputs and outputs of your sales operations. It also means Sales Metrics aim to help you evaluate the strength of not only your whole salesforce but each rep in particular. Below, we break down Sales Metrics into several categories:

  • Revenue Metrics
  • Deal Count and Averages Metrics
  • Customer Growth & Retention Metrics
  • Pipeline Coverage Metrics
  • Sales Productivity Metrics
  • Investment Metrics

Revenue Metrics – What It’s All About

The first category of Sales Metrics is Revenue Metrics. These are the high-level metrics that indicate how successful your sales operation is at capturing revenue. While the other metric categories will help you fine-tune your operations, these metrics are ultimately what your company cares most about: is the sales team bringing in revenue and meeting its goals?

  • Total Revenue: Total Revenue refers to the gross income your company is generating through all activities.
  • Total Expenses: Total Expenses refers to the total amount of money your business is spending.
  • Net Profit: Net Profit refers to your Toal Revenue less your Total Expenses.
  • Annual Recurring Revenue: Annual Recurring Revenue is one of the most important metrics for subscription-based companies and in particular, Software-as-a-Service (SaaS) companies. Annual Recurring Revenue refers to the total annual amount of revenue that your company will generate from subscriptions to your product or services. One-time revenue generated via services or the purchasing of a product do not count toward ARR.
  • Monthly Recurring Revenue: Monthly Recurring Revenue is the same as Annual Recurring Revenue, except that it calculates how much revenue is recurring on a monthly basis. By tracking MRR, you can more accurately understand trends in subscriptions, churns, and cash flow.
  • Gross New Revenue: Gross New Revenue refers to the total new amount of revenue generated during a period. Typically, Gross New Revenue is measured Yearly, Quarterly, and sometimes Monthly. Gross New Revenue includes all revenue-generating activities, including new bookings, upsells, and cross-sells. Typically, Gross New Revenue is the most important metric to judge a sales team’s performance.
  • Gross New Revenue by Type of Sale: Gross New Revenue includes revenue from all sources of sales activities. But for a more fine-grained analysis of the success of different types of sales activities, it’s important to dissect Gross New Revenue by type of sales activity. Some typical ways to divide the data include: new bookings, upsells, cross-sells, contracted price increases, and references.
  • Percentage of New Revenue by Type of Sale: With an understanding of how much revenue was generated by different types of sales activities, you can now calculate the percentage of new revenue that was generated by each type of sales activity.
  • QOQ Revenue Growth: Quarter-over-quarter revenue growth looks at how revenue has grown from one quarter to the next. This is a helpful metric to determine whether your company is growing business every quarter. However, its downside is that it can compare two quarters with very different dynamics. For example, a Christmas decoration store should expect to see its strongest revenue in Q4. Comparing Q3 and Q4 will yield little benefit. For companies with strong seasonal trends in revenue the more useful stat would be year-over-year growth, which we cover in the next bullet.
  • YOY Revenue Growth: Year-over-year revenue growth compares revenue growth from the same relative time period across two consecutive years. For example, it might compare Q4 of 2019 to Q4 of 2020 to determine revenue growth year-over-year in that period. The period in question can vary from a month to a quarter to a year.

Deal Count and Averages Metrics

The next category of metrics aims to give more information on sales velocity, contract size, length of the sales cycle, the efficiency of the sales team, and how well your team is upselling the current customer base.

  • # of New Deals: The number of new deals is a metric that helps to measure the virality of a product or service by measuring the frequency of closed deals. While companies are ultimately concerned about revenue, it’s important to track the number of new customers to help analyze whether most new revenue is coming from a few big deals or many small deals or somewhere in between.
  • Average Contract Value (ACV) of New Deals: Calculated by dividing gross new revenue by the number of new deals, the ACV of new deals is a metric that tells companies their average new revenue by customer. In addition to increasing revenue, QOQ and YOY, companies should aim to steadily increase their ACV, indicating they are increasing their product or service in value over time.
  • Average Contract Length: Average contract length measures the average amount of time companies have contracted with your business for your product or service. Like ACV, companies generally like to see average contract lengths increase over time as they gain more trust and reputation in the market.
  • # of Upsells: The number of upsells measures how many closed deals came from existing customers rather than new customers. Upsells are an essential component of a sustainable sales operation. Some estimates say that the best-run companies derive 30% of their revenue from upsells. Track the number of upsells to measure how successful your team is at servicing and therefore upselling your existing customers.
  • ACV of Upsells: Track the average contract value of upsells to help inform how much additional value you can bring to existing customers and to understand the potential gains from converting more existing customers into upsells.
  • % of Revenue from Upselling: Percentage of revenue from net new deals vs. existing customers measures the ratio of revenue that comes from upselling existing customers as opposed to signing a deal with a new customer. Calculate this metric by dividing the gross new revenue from upsells by gross new revenue for the quarter.
  • Mean Days to Close: Mean days to close is a metric that measures the average length of the sales cycle. Keep a running tab on the mean length of deals to help build stronger forecasts and to shape your expectation of appropriate pipeline coverage.
  • Win Rate: Win Rate is a metric that measures the effectiveness of sales in converting qualified leads. Calculate win rate by dividing the total number of closed deals by the number of sales accepted leads. This metric shows how many leads that sales accepted were converted into closed deals.

Customer Growth & Retention Metrics

Focused on customer acquisition, satisfaction, and retention, these core customer growth, and retention metrics are a great bellwether for not only activities that bring on new customers but also your organization’s ability to maintain existing customers. 

  • Market Penetration: Market penetration is a metric that measures how many customers your customer currently has against how many customers you have estimated to make up your market.
  • Total Customers: A simple but important metric that measures how many customers your company is currently servicing.
  • Gross New Customers: Gross new customers refers to the total number of new customers your company has added in a given period.
  • Net Customer Gain: Net customer gain refers to the total number of new customers your company has added in a given period less the number of customers your company has lost in that same period. This metric differs from gross new customers in that it measures not only the success of sales in bringing on new customers but also how successfully the company retained customers. At a glance, it indicates whether an organization is growing or shrinking its customer count.
  • Churned Customers: Churn refers to customers who have either canceled or not renewed their contract with your company. Churned customers is a metric that refers to the number of customers who have chosen to stop doing business with your organization in a given period.
  • Churned Revenue: Churned revenue is the total revenue lost to churn. Add all revenue associated with churned customers in a period to calculate churned revenue in that period.

Pipeline Coverage Metrics

Pipeline refers to the opportunities that a sales team is working on but hasn’t yet closed. In order to hit quota, sales teams must have opportunities in progress worth a significant multiplier of their quota to account for the deals that won’t close or will be pushed into another quarter. Below, we detail metrics that can help teams understand the health of their pipelines. 

  • Pipeline Coverage Needed: Remember when we calculated win rate above? Well, pipeline coverage needed is a metric that takes into account your win rate and determines how big your pipeline needs to be to hit your quota. Calculate pipeline coverage needed by taking the inverse of your win rate (1 / Win Rate). The result will give you a number, which is the multiple of your quota you will need in your pipeline to probabilistically hit quota.
  • Total Pipeline: Total pipeline tracks the total dollar value of opportunities in your sales pipeline. Typically, this metric refers to opportunities that have been qualified and accepted by sales. Opportunities should move out of the pipeline as they are qualified-out.
  • Weighted Pipeline: A more advanced pipeline, weighted pipeline weights the revenue in your pipeline by its probability of closing. There are many ways to calculate weighted pipeline, but the gist of the metric is that it is supposed to reflect more accurately pipeline coverage than the total pipeline metric.
  • Pipeline by Quarter of the Expected Close Date: In addition to tracking total pipeline, companies should further segment the data by the quarter in which their pipeline is expected to close. With more fine-grained data about when opportunities are likely to close, you can get a sense of whether reps have real pipeline coverage to hit this quarter’s number or whether it is bloated by deals likely to stretch into future quarters.
  • Lost Pipeline by Reason: How many dollars are moving out of your pipeline a quarter? And for what reasons? Lost pipeline by reason tracks how many dollars worth of opportunities are being qualified out of your pipeline and why. This metric is helpful for improving your sales operation and in particular, your qualification process (to avoid wasting time on low-probability opportunities), in the future.
  • ICP Fit Scores: Quantifying Ideal Customer Profile (ICP) fit is one of the most difficult tasks facing any sales team, but the dividends from doing it well can be substantial. Modern technology enables teams to quickly determine the relative fit of an opportunity by leveraging machine-learning to assign a quantitative ICP Fit Score to every opportunity. Utilize ICP Fit Scores to determine whether an opportunity should be pursued, qualified out, or receive additional nurturing through marketing or sales development. With a quantified ICP Fit Score, companies can easily compare the value of their opportunities, make more-informed go/no-go decisions, maintain more accurate pipeline, put together more precise forecasts, determine more effective steps to intervene in ongoing deals, and so much more.
  • # of Opportunities in ICP Fit Score Bands: Track the quality of opportunities in your pipeline by segmenting their fit scores into bands, so you can understand how many strong, fair, and weak opportunities you have in your pipeline. Use fit score designations to more accurately forecast revenue for the quarter.
  • # of Opportunities by Stage: This metric refers to how many opportunities are in each stage of your sales process. Track how many opportunities are in each stage of your sales process to understand your progress and where you can leverage extra attention to move things in the pipeline and get closer to hitting quota.
  • Conversion Rate by Stage: This metric refers to the probability that an opportunity will close given that it reached a certain stage in your sales process. Calculate conversion rate by stage by dividing the number of opportunities that have reached a given stage and closed by the total number of opportunities that have reached that stage. Use this metric to help craft a probability model for likely revenue in a quarter.

Sales Productivity Metrics

Sales productivity metrics break down some of the above sales metrics by sales rep. By analyzing how a sales team is doing on an individual basis, managers can gain significant insight into not only how well their team is performing but can use the more granular data to understand their reps’ strengths and weaknesses and recommend interventions to help every rep attain in line with their potential. 

  • Team Quota Attainment: Percentage Quota Attainment is the metric that measures how well the sales team achieved its revenue goals in a given period.
  • Quota Attainment by Rep: Attainment by rep looks at the percentage of individual quota each sales rep successfully closed.
  • ACV by Rep: ACV by rep is a metric that measures the mean contract value of deals that each sales rep closed in a given period. This metric is useful for understanding whether your reps are closing a few large deals or many small ones.
  • Upsell % by Rep: This metric measures how much of their individual bookings is a result of upsell.
  • Mean Length of Sale by Rep: How long does it take each of your sales reps to close a deal? Mean length of sale by rep is a metric that allows you to measure exactly this.
  • Win Rate by Rep: Of qualified opportunities in their pipeline, how many deals are your reps closing? Win rate by rep is a metric that tracks the efficiency of each rep at converting leads into sales.
  • Lead Conversion Rate by Rep: Lead conversion rate by rep refers to how many marketing-qualified leads sales receive and convert into sales-qualified leads. This metric is valuable for both determining the value of the leads marketing is delivering and how well your reps are pursuing those leads and converting them into opportunities.
  • Average Days to Ramp: Days to ramp is a metric that measures how long it takes an average sales representative in your organization to fully onboard and get up to speed. Traditionally, this metric is calculated as the days until the rep has first achieved quota. Other ways to think about this metric include calculating how many days until the rep has achieved 80%, or a similar benchmark, of quota, so you don’t only judge days to ramp based on your strongest performers.

Sales Activity Metrics

Sales activity metrics are the basic inputs that salespeople can take to boost engagement on their deals. While these are rather rudimentary metrics by which to judge reps’ performance, they can still be useful for understanding how reps are spending their time.

  • Calls: How many calls has a sales rep made in a given period?
  • Emails: How many emails has a sales rep made in a given period?
  • Meetings: How many meetings has a sales rep conducted in a given period?
  • Demos: How many demos has a sales rep conducted in a given period?
  • Proposals Sent: How many proposals has a sales rep sent to prospects in a given period?

Investment Metrics

This final set of metrics contains more advanced analytic metrics that help sales teams manage their spending and attainment using frameworks that investment and venture capital firms to evaluate companies’ health. Harness these investment metrics and gain an even more advanced view of your company’s health and where you can intervene to promote highly scalable growth. 

  • Growth Efficiency Index (Magic Number): Growth Efficiency Index is a metric that measures how effectively Marketing and Sales spending is converted into new revenue. To calculate your growth efficiency index, also known as the magic number, divide new revenue generated in a period by the total sales and marketing costs in that same period. If your GEI is over 1.0, then that means for every dollar you invest in sales and marketing you should expect to earn more than that in revenue. This is a green light to invest more in your business. If the GEI is lower than 1.0, it means that for every dollar you spend on marketing and sales, you aren’t quite making it up in revenue. Organizations with less than a 1.0 GEI should look for efficiencies in their sales and marketing operations to improve the metric and put themselves on a growth trajectory. Of course, for many venture-funded companies, it’s expected to have a lower GEI at first. But as they progress, the GEI becomes more important and is widely considered one of the essential metrics for valuation.
  • Breakeven Number: The breakeven number is a metric that measures how much revenue a sales representative needs to bring in to out-earn their cost. Calculate this metric by first calculating the cost of the sales representative over a given period, including their salary, benefits, and cost of training. The total cost is equal to how much in revenue they would need to earn in that period to break even with their cost.
  • Cost of Customer Acquisition (CAC): The cost of customer acquisition refers to the average expense of acquring a single customer. It is a good estimator of how much money your organization can expect to spend when attempting to acquire a target number of additional customers. Calculate CAC by dividing sales and marketing costs of a given period by the number of new customers acquired during that period.
  • Net Retention Rate: The net retention rate refers to the net amount of revenue your organization has retained in a given period from existing customers. Net retention rate aims to account for both revenue lost to churn and downgrades and to revenue gained from upselling or cross-selling. To calculate net retention rate take your starting recurring revenue for a given time period and subtract from it revenue lost to churn and downgrades then add to it revenue gained from upsells or cross-sells. Divide this number by the starting recurring revenue for that period, then turn the result into a percentage.
  • Gross Retention Rate: The gross retention rate refers to the gross amount of revenue your organization has retained without taking into account upgrades, upsells, and cross-sells. In other words, gross retention rate asks: of the customers that entered the measured time period, how much of that revenue did you retain? To calculate gross retention rate take your starting recurring revenue for a given time period and subtract from it revenue lost to churn and downgrades. Divide this number by the starting recurring revenue for that period, then turn the result into a percentage.
  • Customer Retention Rate: Customer retention rate is similar to gross retention rate but instead of reporting the percentage of revenue your organization has retained, it reports the percentage of customers your organization has retained. Calculate customer retention rate by dividing the number of customers who churned in a given time period by the number of customers your organization had at the beginning of that time period. Note that this is a cohort analysis, so it should only include customers who were already contracted with your organization at the beginning of the time period.
  • Churn Rate: Churn rate is the inverse of customer retention rate. Where customer retention rate reports what percentage of customers you have retained in a given period, churn rate reports what percentage of customers you have lost in a given period. Calculate churn rate by subtracting the customer retention rate from 100%.

About Patri

Patri provides instant AI-powered revenue intelligence for every team and every deal by revolutionizing sales qualification around the core principle of the Ideal Customer Profile (ICP). Find, refine, and apply your ICP across the go-to-market motion with Patri’s AI-Generate ICP Engine. Win smarter with Patri by understanding your ICP(s), discovering the true health of your pipeline, qualifying effectively, and refining your forecast.

Top companies have increased win rates and saved millions in selling costs by leveraging Patri to prioritize and manage active opportunities, better understand why they win or lose, act upon automated deal insights, seamlessly share progress, and more reliably hit quota.

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