It might go without saying, but your sales org can’t function effectively if you don’t track performance metrics. You need to have a detailed pulse on what kind of results you’re seeing if you’re going to diagnose whyyour org is over- or under-achieving.
Don’t know where to start? Don’t worry — HubSpot recently surveyed over 1,000 sales professionals to give you some perspective. Here’s an in-depth look at the seven metrics respondents cited as being important to track. Let’s dive in.
A business uses performance metrics to determine if its outcomes align with the goals it sets. If a performance metric falls below its target, the organization is likely underperforming. But if an outcome falls within or above its ideal range, the business is either meeting or exceeding its goals.
Tracking and analyzing performance metrics help businesses evaluate the soundness of their operations and make better-informed decisions. What the “right” metrics are for you depends on factors like your sales organization’s structure and priorities, the nature of your industry, and your broader company objectives.
Here are the seven most important sales performance metrics your sales team should be measuring — according to over 1,000 sales professionals.
To calculate average profit margin, you divide net income from a given period by the net sales over that same timeframe.
Tracking your average profit margin is one of the better ways to understand your sales org’s efficiency — it’s one of the purest metrics for gauging how much of the revenue you generate is making it to your bottom line.
It tells you how well your team’s input is translating to productive output. While tracking revenue is important, it doesn’t give you a full picture of how effectively your sales org is leveraging the resources at its disposal.
You can generate impressive revenue figures in a quarter — but if you’re investing more into supporting those efforts than you’re reaping, those figures might paint a misleading picture of how your company is performing.
Year over year (YoY) growth — in the context of sales — is a metric that shows how an organization’s sales figures have improved from one year to another. It’s typically expressed as a percentage.
To calculate YoY growth, take your revenue figure for an initial 12-month period, subtract that number from the previous 12 months’ revenue, divide the difference by the latter, and multiply the result by 100.
So if you saw $100,000 in revenue in 2021 and $90,000 in 2020, you would divide the difference of $10,000 by $90,000 and multiply that figure by 100 — resulting in a YoY growth figure of 11.11%.
YoY growth gives sales leaders a picture of how their sales orgs are performing from a wider lens. Monthly and quarterly figures are relatively limited and more vulnerable to shifts that might not reflect the company’s real health.
Annual growth figures help sales orgs gauge elements like the soundness of their sales processes and efficacy of their sales efforts — beyond the influence of factors like seasonality or monthly volatility.
Your conversion rate measures how the percentage of leads that ultimately become customers.
To calculate conversion rate, divide the number of your leads who ultimately become customers by the number of leads you generate in a given period. So if you get approximately 500 leads per month, and on average 50 buy your product, your conversion rate is 10%.
This metric can help you calculate how many leads you need to make your revenue targets. Historical conversion rates also show whether your reps are becoming more effective. If your average conversion rate is climbing — and you’re closing the same or greater quantity of deals — then sales performance is improving.
If your conversion rate is dropping — and your quantity of deals is flat or decreasing — something is probably wrong with your process, team, and/or lead generation efforts.
The term “sales productivity metrics” is essentially a catch-all term that covers how actively, consistently, and productively sales reps engage in the activities relevant to their roles. It can cover metrics like CRM usage, calls made, emails sent, conversations, or use of sales tools.
Again, “sales productivity metrics” covers a range of figures. “Calculating” them is a matter of tracking reps’ individual activity through resources like CRMs or call tracking software.
Ultimately, an entire sales org can only be as productive as the reps who support it. As a sales leader, you need to know that everyone in the org is staying engaged and pulling their weight. Tracking sales productivity metrics offers a way to hold reps accountable and ensure they’re staying active and motivated.
The value of these metrics is twofold. For one, they give leaders a picture of how the broader org performs. Secondly, they offer managers insight into how individual reps are contributing — showing whether they might need extra attention, coaching, or support.
Quota attainment is a relatively straightforward metric. Simply put, it shows whether a rep has hit their quota for a given period — more specifically, the metric represents the proportion of a rep’s actual sales to their quota.
To calculate quota attainment, divide a rep’s actual sales in a given period by their quota for that same timeframe and multiply that figure by 100.
Like sales productivity metrics, quota attainment offers sales leaders a more thorough picture of how individual salespeople are performing. It might be the purest measure of the results reps are delivering.
As I mentioned, a sales org can only be as strong as the reps that support it. Tracking quota attainment is another metric that lets managers know which of their salespeople need extra attention, coaching, or support.
But quota attainment’s value isn’t specific to how individual reps are performing. Tracking quota attainment on an org-wide scale can show how sound that org’s sales process, messaging, leadership, and goal-setting are.
To calculate win rate, you divide your number of closed-won deals by the sum of your closed-won deals and non-closed-won deals.
Win rate gives sales leaders a picture of the timeframes, specific reps, or other factors that maximize their orgs’ potential to turn prospects into customers. That kind of perspective can inform better-structured sales strategies, lead to more tactful personnel decisions, and help expose flaws in sales processes — among several other elements that dictate a sales org’s performance.
To calculate customer acquisition cost, you start by determining a timeframe for your calculation — typically a month, quarter, or year. Once you’ve landed on a designated frame of reference, add your total marketing and sales expenses from that stretch and divide that figure by the total number of customers you acquired over the period.
Like so many other metrics listed here, customer acquisition cost is a measure of your organization’s efficiency — it’s a reflection of the soundness of your sales and marketing strategies as well as how effectively both departments are leveraging the resources at their disposal.
A less-than-ideal customer acquisition cost can tell you that your sales process might have some glaring hitches, reveal that sales and marketing aren’t properly aligned, show that your reps might not be putting in enough effort, or shed light on other elements of your efforts that prospects aren’t receptive to.
One way or another, a poor CAC is one of the better indicators that your organization has work to do — tracking it provides a starting point for determining what you’re doing well and where you stand to improve.
It’s worth noting that this list is far from exhaustive and won’t necessarily cover all the bases you’re looking for. The performance metrics you choose to track will rest on the needs, interests, and structure of your sales org.
Still, the metrics listed here represent a solid starting point to give you some valuable perspective on what you’re doing well and where you might have room for improvement.