Basic metrics you should keep under control
When we talk about “performance metrics”, we are talking about the indicators required by the sales team in order to be successful.
Nowadays, we live in a hyper-competitive business ecosystem, and it is essential for you to outline some metrics along with your sales team. This will provide the same outline to everybody involved.
Keeping an eye on tactics is one of the best ways to keep your strategy alive.
First of all, we should know what the goals to be achieved are, and determine the steps we will take to reach those goals.
Goals should be known and shared by the whole team, otherwise having a subsequent assessment of opportunities will be useless. It is essential to know where we are going and how we are expected to get there.
2. Sales growth
Each and every company should have an indicator for growth which shows the rate of investment achieved with each sale, and clearly determine whether it increases or decreases.
This is a key measure for any given company, as well as an essential aspect of growth estimations.
This is also an instrument when it comes to making strategic decisions.
Controling the metrics in several periods will provide a clear indication of what the growth trends are and what their normal values should be. This will help you explain monthly or quarterly investment increases.
Opportunity metrics are based on the total value of the opportunity and the probability to turn the opportunity into real value. Every perspective has a sale estimation value associated to your team, with a view to focusing efforts towards that opportunity.
Companies that have included a CRM have a well-rounded definition below a panel that shows the state and value of opportunities. This is essential to find out what the position of the leads is.
4. Product Performance
Not all products have the same investment value, and every sales team should know, above all, which is the most profitable product and how to use them as an intermediate step towards other products that are harder to sell or those with a much higher price than those of our direct competitor.
The goal lies in being able to sell all our products and knowing when to stick to one and when to stick to another.
Needless to say, such actions should only be undertaken if they are in line with the company overall goals.
5. Average profit margin
Companies that sell a wide range of products and services usually generate different profit margins for each one of them.
Finding out about the average margin for the product is important when it comes to selling products.
This model has its own distinctive features in companies with dynamic prices, as well as in those that provide flexibility with a view to obtaining clients that have specific needs and budgets. This would be the case of the B2B licensing models.
6. Monthly recurring income
Companies with SaaS- (Software as a Service) based business models set the monthly recurring income at the forefront of their business model. For them, this is one of the most prominent KPIs to monitor.
The goals involving monthly recurring income may be drastically different depending on the business area, but they should be an indicator of the company’s position in its life cycle, as well as that of their targets for growth and the deadlines for its growth.
I love SaaS-based business models for several reasons: they provide you with plenty user metrics and they make much room for selling other services. However, if you come across a disrupting element, your model may be affected and lose some of its value in a very short time.
7. Sales by contact type
By using a CRM you may measure all the contact methods that are being undertaken towards the generation of new opportunities: e-mail, phone and person in charge of managing such opportunities. It’s worth considering this KPI along with product performance metrics that are linked to the performance of the salesperson.
By doing so, you may see all relevant activity at a glance using the different tools available, as well as all the opportunities that are being generated.
Linkedin is a good working tool, but the integration I’ve seen (to date) with a CRM is not completely appropriate. There’s much to be done, particularly in research matters.
8. Sales by agent
Last but not least, metrics that measure the sales by each and every of the people in the sales team should be available.
This are relevant data when you are in a management position, but if you are in a working position you also need to know what is going on.
Communication is essential because you need to know what is happening with that person in that area, as it may be an area with severe handicaps which may be hampering the sales output of the agent working in it. This may also be detrimental to the product, as it is not visible in the given zone.
Needless to say, many more metrics are available, and everything depends on what you want to measure. However, the aforementioned ones are a good starting point (that can be improved, of course) to decide where you want to go. Such a decision may be, for a freelance professional, one of the most complex ones to face.
Would you like to share your metrics?
I would love to compare your metrics to mine. How about that?