When it comes to tracking sales performance, there are literally hundreds of metrics the internet tells you you can and should be tracking.
These metrics aren’t the same across all organizations, which is the opposite of what happens in most other professions. For example, in finance, there’s one distinct set of KPIs that are the same no matter which company you work for.
Not so in sales.
Instead, we have a hundred metrics we could measure, and each sales organization takes the ones that are most important to them. In larger sales organizations, individual teams may use different metrics, so you end up having different standards across the board.
The other problem is that nearly all sales metrics are lagging indicators. You can easily see what’s happened in the past, but you have no clue whether that will bear out for the future.
So the question arises: which sales metrics are the most important to measure?
In their book Cracking the Sales Management Code, startup founder Michelle Vasana and UVA professor Jason Jordan analyzed 75 sales organizations and all of the different kinds of metrics they tracked.
They came up with these three kinds of sales metrics that you should be tracking if you want to see exactly how well your sales organization is performing.
Work Like a Mechanic, not a Drill Sergeant
Before we get into the types of metrics you should be tracking, we need to address how you should approach them.
A lot of sales leaders approach this like a drill sergeant, enforcer, or worse, Big Brother. This is the absolute wrong approach.
Berating someone for not hitting their numbers is completely counter-productive. If you want a rep to change their behavior, you can’t do that by applying unbearable loads of external pressure.
Instead, you have to get them to understand why they’re underperforming, and get them to want to fix it.
Now, there are times when the rep needs you to light a fire under their ass. But unless you’ve diagnosed the problem behind their performance, you don’t know where the problem is and whether that’s going to do any good.
So instead, you need to approach this review more like an auto mechanic.
The best mechanics start by doing an initial diagnostic, and then visually inspect what they can measure with the different instruments they have. They’ll then compare your vehicle to what “good” is supposed to look like, and come up with a plan to get you from Point A to Point B.
Metrics should never be used as a flogging tool. Instead, they should empower your reps by showing them objectively where they stand, where they need to be, and how to get there.
Let’s say you’ve got an SDR who’s not getting the number of appointments per month or quarter that you need to see.
Now, instead of going and chewing them out for it, ask yourself: why are they falling short of their numbers?
So go and observe their behavior by looking at the CRM, reviewing call recordings, etc. You may notice that they’re having a lot of meaningful interactions with people (e.g. multiple email exchanges, LinkedIn connections, text conversations). But they’re with the wrong buyer.
And that’s part of the problem there. The rep has great activity levels; they’re just applying it to the wrong people. To fix the problem, they need to learn more about the ideal customer profile and how to identify good fits.
Another example is if your ideal customer profile is a CIO at a Fortune 500 company. Your rep could be calling them between nine and five, and that’s why they’re not getting connected with them. These people are in meetings all day, so you have to catch them early in the day, at lunch, or after hours.
Sometimes, however, the problem isn’t with the rep, but with your technology. If you’re using an automated dialing platform, your caller ID could be getting flagged as spam on the other line. In this case, the rep could make a hundred more calls and it still wouldn’t make a difference.
Instead, you could do some basic research into those numbers’ caller ID reputation. Fixing that could increase the number of connections you’re making from those calls.
The main point here is that different problems will require different approaches. It’s not enough to understand the metrics themselves, but the WHY behind the metrics.
When you take a diagnostic approach, like a car mechanic, you’ll find that root problem, then direct your coaching efforts to fix it. This is not only a more effective coaching strategy, but it will enhance morale and encourage your reps to own their own performance improvement.
The 3 Types of Sales Metrics You Should Be Tracking
Now that we’ve walked through how to approach these metrics, let’s look at exactly what you should be tracking.
In general, sales metrics fall into three categories:
- Activities. These are your team’s inputs, the things they can directly control (e.g. call frequency, cadence, new accounts created)
- Objectives. These are your leading indicators, which show you whether your activities are resulting in any forward movement (e.g. deals created, average deal size, etc.)
- Results. These are the outcomes that drive the business forward, and are generally out of your control, since you rely on other people’s behaviors to achieve them (e.g. close/win rate, NPS, LTV, etc.)
The specific metrics within those categories aren’t so important as making sure that you’re measuring something within each of them. Otherwise, you won’t have the whole picture of how your organization is performing. And you won’t be able to diagnose the problem and fix it.
Generally speaking, if you align your activities with your objectives, you’re more than likely going to generate results. If you don’t then you either need to ramp up your activity, or change your objectives.
By tracking all three of these areas, you’ll be able to better diagnose where the problem really is, and be better positioned to fix things.