The Sales Metrics I Look at Every Month

Jim McDonough
Jim McDonough



four-diceEvery sales executive is faced with a revenue goal he or she has to achieve for the year -- that’s a challenge in and of itself that requires well-defined metrics to manage to.

But the top sales leaders find ways to achieve a predictable revenue model that lets them establish a business that sustains itself (and hopefully grows) for years to come. In order to do that, I find it important to get back to the basics and look at some top line metrics (which should be on your sales dashboard) that give you insights into the effectiveness of your sales organization. These are the four I find myself consistently coming back to in my work as VP of Sales at

1) Activities

Activities are what will drive opportunities and more revenue. It’s not just about having a massive amount of activities -- quantity is important, but quality can’t be discounted. I like to ask how many dials we’d need to make per day in order to create one opportunity. If everyone understands that metric, and they know the goals they need to hit, it makes life easier on both management and reps.

2) Win Rate

This is the percentage of deals you win that go into your pipeline. You need to know your overall win rate, but it's also really important to know your win rate at every stage of your sales cycle, and your win rate by rep. For instance, I might know that at a high level, we win 20% of deals. But I should also know that if I have X amount of deals in stage 2, I know I can expect Y number of them to progress to the next stage based on our win rate at that stage. Then, I can break this down on a rep level to identify performance issues, and more accurately forecast deals.

This level of insight also helps me identify issues in the Sales and Marketing funnel, and have a more productive conversation with my Marketing counterpart. For instance, I can see how many touchpoints from an activity standpoint it takes to move from one stage to another, see how long it takes to advance stages, and see where and why deals are getting stuck in that process. With that information, I can either make adjustments on the Sales side, or work with Marketing to get the content I need to improve the win rates from stage to stage.

3) Average Deal Size

I’ve got my number to hit, and in order to get there, I have to understand what my average deal size is. When I couple this along with my win rate, I can understand how long it takes to win a deal, and how much revenue I can expect each deal to contribute to my number.

4) Sales Cycle

This is the number of days it takes to close a deal. It will vary from organization to organization, typically based on average deal size -- higher price, longer sales cycle; lower price, shorter sales cycle.

The reason a scorecard for your sales cycle is so important is that it gives you a really good understanding of the deals that are in your pipeline. So if you're trying to forecast for the quarter, you need to understand how many deals in your pipeline have a chance to close this quarter based on what the average sales cycle is.

What these metrics all really boil down to is sales velocity, and what you can do to tweak these numbers in order to increase it. Knowing my baseline, how can I increase value for the prospect so as to increase my average deal size? Shorten the sales cycle? Improve my win rate from stage to stage? It takes work from Sales, Marketing, and Product to move these metrics -- but keeping a keen eye on these metrics, and creating company-wide alignment on them, will help improve your sales velocity overall.

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Topics: Sales Metrics

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