While tracking metrics is an important activity for all sales organizations, B2B sales teams face unique challenges. Selling to other businesses is completely different than selling direct-to-consumer. In B2B sales, the stakes are often much higher, and closing the deal can be a more involved process.
That's why defining and tracking relevant metrics for your B2B sales organization is critical for success.
High-performing B2B sales teams consistently measure the health of their business. By tracking and taking action to improve essential metrics, you can position your sales team for better performance and productivity.
Let's review the sales metrics your B2B organization should be tracking.
B2B Sales Metrics to Track
1. B2B sales key performance indicators (KPIs)
It's important to understand how the efforts of your B2B sales team directly relate to overall company performance, health, and growth potential. Here are a few KPIs to track every month:
- Total sales represents the total amount of money generated from sales for a given period of time (often totaled monthly).
- Sales by product or product type indicates how many sales were generated from each product or product type. From the total sales amount listed above, segment how much revenue was generated from each product or product type.
- Sales from new business tracks how much first-time customers contributed to total sales. Use this formula to calculate the sales from new business percentage: (Sales from New Customers / Total Sales) * 100
- Net profit margin determines how much your company will profit during this time period. Use this formula to find net profit margin: (Net Income / Net Sales) * 100
- Net Promoter Score (NPS) helps your company quantify customer reviews. To begin calculating this metric, ask customers how likely they are to recommend your company to a colleague or friend on a scale of 0 to 10. Once you have that data from a set of customers, categorize those who answered 9 or 10 as "promoters," those who answer 7 or 8 as "passives," and those who answer 0 to 6 as "detractors." Tally up the total percentages of each response category, then calculate net promoter score using the following formula: NPS = (Percentage of Promoters) - (Percentage of Detractors)
2. Sales productivity metrics
The more time you have, the more outreach you can conduct. Measuring the productivity of your sales reps will help you understand how long it takes to reach revenue targets. Essentially, the faster your sales reps can hit their sales targets, the higher your company's sales productivity will be.
Understanding this data can help your team pinpoint inefficiencies in your sales processes and identify ways to improve. Productivity metrics can include:
- Percentage of time spent demoing - This tracks how much time reps spend demonstrating products. Calculate this value using the following formula: (Number of Hours Spent Demoing / Total Number of Hours Worked) *100
- Percentage of time spent performing data entry - This measures how much time reps spend doing manual data entry tasks. Calculate this value using the following formula: (Number of Data Entry Hours / Total Number of Hours Worked) * 100
- Percentage of time spent on the phone - This shows how much time reps spend engaging with prospects in calls to move their deals forward. Calculate this value using the following formula: (Number of Hours Spent on Phone / Total Number of Hours Worked) * 100
- Number of sales tools used, and the average amount of time spent using each tool - This number can help your sales team streamline the number of tools used, and amount of time spent using tools. Have sales reps tally how many tools they use on average, and use a time-tracking tool to help report how much time they spend using each tool on any given day or week.
- Percentage of closed-won deals - This measures how many closed deals resulted in a sale over a specific period of time. To find the percentage of closed-won deals, use the following formula: (Number of Closed-Won Deals / Number of Total Closed Deals Won + Lost) * 100
3. New leads by source
How much information do you have about your new leads? Do you know where new leads are coming from? By understanding how many leads you have coming through your sales pipeline and tracking where they're coming from, you can better target future offers to reliable sources.
If after tracking new leads by source for a period of time your team finds more leads are coming in through the contact form of your website instead of by phone call, you can allocate sales reps' time to responding to contact form requests instead of spending time on the phone.
4. Estimated revenue by lead source
Once you begin tracking where your leads are coming from, you can measure how much of your company's revenue is coming from leads by each major source.
For example, if in one month your sales team brings in $20,000 in sales, and $5,000 of that revenue is from leads who engaged on social media, as a lead source, social media accounts for 25% of your revenue.
When you look back at historical data from previously tracked lead sources, your company can better estimate how much revenue is expected to come from each source. This will also help prove the profitability of each lead source, giving your sales reps data to help them target profitable sources to find new leads.
5. Average lead response time
Once contact has been made from a lead, how long does it take for a sales rep from your organization to respond? Ideally, you want reps to follow up with leads quickly — within minutes, if possible. According to a highly cited Harvard Business Review study, on average companies respond to leads within 42 hours of an inquiry, if they respond at all.
In sales, every minute matters and the shorter the response time with a lead, the higher the chance a lead will remain high-quality. By tracking the average amount of time it takes for reps to respond to leads, you can better understand how to improve.
If you're looking to decrease your average lead response time, here are a few strategies to try:
- Social Listening - Stay on top of inquiries that come in through social media and respond quickly to engage with interested leads.
- Live Chat - If a lead comes to your website, fills out a contact form, then goes on with their day, you could be losing precious time to engage with them. Having a live chat feature on your website that allows reps to talk to leads in real time can keep leads more engaged from the beginning.
- Email Workflows - When leads do engage via email, it's important their inquiries don't get lost in the shuffle. Setting up email automations that can get lead requests routed to the right person and addressed quickly is a more effective option than simply having requests go to a shared mailbox.
6. Pipeline creation by month
The more visibility you have into your sales pipeline, the more revenue potential you have for your business. Your sales pipeline should include every opportunity your sales reps are handling at any stage of the sales process.
Track if the opportunity pipeline is increasing or decreasing in size or qualified prospects. If your pipeline is decreasing, it may be worthwhile for your team to identify where in the process prospects are dropping off and to focus on improving these areas. If your pipeline is full of bad leads, it would be valuable to better understand where these leads are coming from and how they are being engaged with.
For example, if after tracking your sales pipeline for three months you see that 25% of outbound leads become qualified prospects and you need 50 new leads to maintain pipeline growth, you know you need to contact 200 outbound leads to maintain pipeline growth. If you are new to pipeline creation, this free sales pipeline template can help you map out your own pipeline.
7. Marketing qualified leads (MQL) to sales qualified leads (SQL) conversion rate
This metric requires synergy between your marketing and sales organizations. In the marketing qualified lead (MQL) stage, your leads have expressed interest in your product or service by downloading content, signing up for an email, or redeeming an offer.
A sales qualified lead (SQL) is a lead that has been qualified by the sales team as being ready to speak with a salesperson. Once a salesperson has made contact with a lead and verified that they're motivated to learn more about your product/service, they become a prospect.
The MQL to SQL conversion rate shows how many marketing qualified leads are converted to sales qualified leads. This metric can help you determine the quality of leads brought in through marketing efforts. Tracking this metric can also help indicate if your marketing efforts are assisting with the creation of a high-quality pipeline.
For example, if 100 people redeem an offer for a free download from your website, and 20 of them become sales qualified leads, then your MQL to SQL conversion rate is 20%.
This metric is likely being tracked by your company's marketing organization. However, as a sales leader, you should have visibility into this metric to help identify any gaps in pipeline population.
8. Opportunities by lead source
A sales opportunity is a highly qualified prospect that has progressed past the lead stage and has expressed a pain point that can be solved with your product or service. In B2B sales, typically only 10 to 15% of opportunities lead to sales. With such a low average conversion rate, understanding and nurturing your company's opportunities is critical.
For example, if month over month you find more of your opportunities come from email than from any other lead source, that would be considered a strong opportunity source.
Tracking the common sources of your B2B sales opportunities can provide helpful data to your sales reps. This data shows what sources are more likely to drive sales opportunities.
9. Closed won opportunities by month
A closed won opportunity is the point in the sales process a prospect agrees to a contract or makes a purchase and becomes a customer. This represents a successful ending to the sales process. In addition to tracking the number of closed won opportunities each month, it can be helpful to track the number of closed won opportunities against total opportunities to find the overall win rate.
You can find this by using the following formula: Closed Won Opportunities / Total Opportunities (Closed Won + Closed Lost)
10. Pipeline velocity
Sales pipeline velocity measures how long it takes prospects and opportunities to move through the entire sales process, from first contact to closed deal.
The longer it takes to move through the sales process, the more likely you are to lose prospects along the way. Regularly assessing and making improvements from the data provided by this metric can help your team optimize the sales process and retain more prospects.
To calculate your organization's sales pipeline velocity, segment your sales pipelines by market size (we recommend categorizing small, mid-market, and enterprise-level pipelines) and calculate the sales velocity for each segment. You can use this equation to find sales pipeline velocity: Sales Velocity = (Number of Opportunities x Deal Value x Win Rate) / Length of Sales Cycle
Here's an example of sales velocity in action. This month, a sales rep for a B2B software company has 20 sales opportunities in the pipeline. Their deal value is $15,000 and win rate is 25%. They are currently working on a 45-day sales cycle. In this situation, the sales velocity would be $2,000/rep/month.
11. Customer Acquisition Cost (CAC)
While it does take money to make money, you want to make sure your sales team is bringing in more than what's going out. Customer acquisition cost (CAC) measures the average cost spent converting a prospect into a customer. Understanding CAC is important for keeping track of the return on investment for your sales team's efforts.
Use this formula to calculate CAC: Customer Acquisition Cost = Dollars Spent Acquiring More Customers Over a Period of Time / Total Number of Customers Acquired During the Same Period of Time
If a company spends $12,000 acquiring more customers, and brings in 30 new customers during that time, their customer acquisition cost is $400 per customer.
Regularly tracking the right metrics for your B2B business and implementing changes based on what the data tells you can be a game-changer for efficiently driving sales. If you're ready to dive deeper, check out the Ultimate Guide to Sales Metrics. What metrics are you currently tracking to measure B2B sales success?