Having the ability to account for the 10 basic metrics to measure sales results puts the company in an advantageous position. Learn to calculate these numbers with SMF360 and improve your team's performance exponentially.
Basic metrics to measure sales results
Why measure sales team performance?
When a company has the intelligence to read the metrics and make sense of the data provided by its sales team, it opens the way to opportunities for improvement and growth. This allows, among other things, to:
Constantly improve your practices
Increase return on investment
Have clear profits and billing amounts
Analyze the productivity of the team and each of its members
Understand the customer experience and measure their satisfaction and commitment to the company
Preview behaviors to take precautions regarding them
Measuring sales team performance is the fundamental basis for the success of every company. To do this, it is necessary to know the 10 basic metrics for measuring sales results.
10 basic metrics to measure sales results
Number of prospects
Prospects are the fuel of every company. These potential clients are the ones who determine how much power there is to close sales and achieve the commercial objectives of the organization.
There are several factors that influence how many leads a company needs . Having a clear map of the number of prospects needed is really necessary to keep the company alive. More than 70% of companies that don't reach their numbers get negative results because they don't address even 50% of the prospects they should.
Conversion rate from marketing process to sales process
Having low marketing to sales conversion rate numbers means that the team is not working together and that marketing efforts are being displaced. This metric is important to measure the effectiveness of the campaigns and actions carried out in the company.
To improve this percentage, it is important to establish clear objectives and, in addition, for both departments to be aligned in the company's operational strategy.
Marketing to sales conversion rate
Win Rate
The percentage of business won is one accounting directors email lists of the most importantbasic metrics for measuring sales results. It can be used to determine the effectiveness of a person or team. It also helps to identify whether the company's objectives are not being achieved due to a lack of sales force or a lack of marketing strategies.
To calculate it, divide the number of deals created (potential clients interested in closing a deal) by the number of deals won (sales that are completed). This will give you the percentage corresponding to the win rate.
Customer Acquisition Cost (CAC)
Knowing the CAC and understanding how much it costs a company to gain a customer is extremely important in the basic metrics for measuring sales results. It is influenced by the time invested in conversations, tangible and intangible resources to reach the prospect, tasks of the marketing and sales departments, etc.
This metric allows you to set realistic goals for your company, calculate the monetary value of your product, and have a clear idea of the real return on investment (ROI) .
Customer Lifetime Value (LTV)
Customer lifetime value is one of the basic metrics for measuring sales results that helps calculate the profits generated by each customer and their value within the organization. To calculate it, a sum is made of all the customer's purchases during their time as a partner with the company and, from the result, the average costs associated with their service are subtracted.
Customer Lifetime Value
Relationship between CAC and LTV
The relationship between customer acquisition cost and customer lifetime value is fundamental because it tells us whether there is a real return on investment with the customer. If the customer acquisition cost is greater than or equal to the customer lifetime value in the company, it means that:
A lot of time and resources are being invested in acquiring a customer. This in turn means that the marketing and sales cycle is working in the wrong way.
The values per product/service are wrong and do not generate any profit for the company. To improve this aspect, it is necessary to recalculate the final prices to obtain a good ROI.
Sales Cycle
Being able to calculate the sales cycle allows you to know how long it takes to close a deal. This helps you measure whether a specific deal is being difficult or lost and to take action on the matter. Among the basic metrics for measuring sales results, this helps you know how much time is invested approximately per transaction.
To measure the approximate days it takes to close a business, a specific time period is established and the days that comprise it are divided by the number of businesses that were opened and closed in that time. For example:
Time period: August
Days that compose it: 31
Number of businesses that opened and closed: 10
So: 31 / 10 = 3.1
Transactions per Client
By knowing the transactions per client, you can know which accounts generate the most sales and the best results. With this information, you can segment sales and focus attention or hire staff to focus on serving prospects and clients that belong to a specific group.
