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    02/20/2024 |

    The Top 10 Sales Metrics You Must Be Tracking in 2024 (Part 2 of 2)

    Last week, we published a blog article with five of the top 10 sales metrics you must be tracking in 2024. This week, we’ll continue the conversation with the remaining five metrics that make hitting your sales targets much easier.

    If you missed the first part of this article, here’s a link to part 1. As a refresher, the first five metrics included sales cycle in days, the conversion rate of sales-qualified leads (SQLs) to sales opportunities, the conversion rate for sales opportunities to proposals submitted, the close rate on proposals/agreements submitted and average revenue per new customer.

    In this article, we’re going to look at some more advanced metrics and a mix of traditional metrics to round out your top 10 sales metrics that will help you exceed quota this year.

    6. Revenue Goal Attainment

    This one is easy it’s a layup, and it’s the number almost every single sales organization is good at tracking, but it still begs to be mentioned.

    Every sales rep, sales territory and sales organization has a quota or sales target. These are typically set at the beginning of the year and distributed through the sales organization. Sometimes each level adds a little to the quota to give them a buffer when rolling back up the numbers. This isn’t a great practice, but it happens.

    If your total company sales goal is $10 million and you have four territories with four reps in each territory, that’s 16 reps. Assuming the target is shared equally, that’s $625,000 per rep and $2.5 million per territory.

    But because the regions or territories want to exceed their goal, they set an annual target of $2.7 million, and then each territory manager gives their reps annual targets of $700,000, just to be safe.

    If you roll these up, the company is not technically working on a quota of $11.2 million. You should make a conscious decision about whether this roll-up and roll-down approach makes sense.

    Regardless, revenue goal attainment every month is critical to sales success and growth.

    7. Pipeline Velocity

    Let’s get a little fancier now. Pipeline velocity is defined as the speed by which leads move through your pipeline, whether won or lost. What’s interesting about the pipeline velocity metric is that you should care more about the changes in the number over time than you should about the actual number.

    In other words, pipeline velocity data is only relevant when compared to the velocity over time.

    Tracking pipeline velocity is a lot like tracking regular velocity, which is to say you divide a change in position by the change in time.

    In the case of a pipeline, the equation is the number of sales-qualified leads in your pipeline times the overall win rate percentage of your sales team times the average deal size (in dollars) divided by your current sales cycle in days.

    Using this formula, your result will be the estimated revenue you have coming through the pipeline every day. The higher that number, the better your pipeline velocity.

    To learn more about pipeline velocity and to see a few visual examples of this number over three months, check out this article on pipeline velocity.

    8. Customer Lifetime Value

    Again, it’s shocking how few CEOs know this number, but it’s one you should have easy access to and be tracking every month. This is simple to calculate just multiply what the average customer spends with you each month by the number of months an average customer stays with your business.

    If the average customer spends $10,000 a month for 15 months, then the average lifetime value of the customer is $150,000. Every new client signed is potentially worth $150,000, and you should be working to drive up the average monthly billing and the time customers stay with your company.

    By keeping them for just two more months, you increase revenue per client by 13%. If you can get the average monthly billing from $10,000 to $12,000 and extend the life of the customer to 17 months, you would go from $150,000 to $204,000, or a 36% improvement in revenue.

    Knowing this number helps you make big moves like this.

    9. Cost of Acquisition

    A company’s CAC (customer acquisition cost) is the total sales and marketing cost required to earn a new customer over a specific period.

    As a blog from HubSpot explains, “The total sales and marketing cost includes all program and marketing spend, salaries, commissions, bonuses and overhead associated with attracting new leads and converting them into customers.

    “Successful companies are aiming to constantly reduce the cost of customer acquisition not just to recoup revenue, but because it's a sign of the health or efficiency of your sales, marketing and customer service programs.

    For example, let's say your company spends $500K on sales and $300K on marketing. Additionally, your company generated 800 new customers during the last fiscal quarter. Therefore, if we were to calculate the CAC for your business, the cost to acquire a customer for that quarter would be $1,000 ($500K + $300K / 800= $1,000).”

    If your customer acquisition strategy is heavily sales-focused and driven by expensive demand generation marketing activities, it’s going to cost you more to acquire a new customer. If you can grow with fewer and more effective sales reps, and you have a heavily inbound lead generation effort, you’ll have a lower CAC.

    You should know this number and be tracking it monthly or quarterly at a minimum.

    10. Prospect Email Open Rate and Prospect Email Click Rate

    Finally, the last set of metrics for successful sales companies is related to the emails sales reps are sending to their prospects.

    Every sales organization should have a library of prospect emails aligned with each stage of the prospect buyer journey and each stage of your documented sales process (you have that, right?).

    These emails should be templates and be loaded into your CRM (you have that too, right?). These emails should be easy to access, easy to personalize and easy to send.

    But what we’re talking about here is the performance of those emails. Are they working? Are they getting opened? Are they getting clicked? Are they working to move prospects from one step in their buyer journey to the next? Are they working to move your prospects through your sales process?

    You have to know.

    We do a lot of email support for sales teams and have found that these one-to-one sales emails generally perform at a high clip. Open rates typically come in around 40% and click-through rates are in the upper 20% range across all our clients.

    For comparison’s sake, general email open rates are around 20% on a good day, while click-through rates can be between 3% and 5% in general. It shouldn’t be surprising that an email from a sales rep to a sales prospect is outperforming any general air-cover email marketing.

    But you should know the exact open rates and click-through rates on all your sales emails, and you should be looking at the emails that are underperforming. A monthly review of the emails and a regular update to those that are not working as well is good practice for ongoing marketing program optimization work.

    Look at the subject line this is everything when it comes to open rates. Then look at the email copy. Is it short and to the point? Is there a clear action you want the recipient to take? Make small changes and then put the template back into circulation. Then review its performance again in a few weeks.

    This ongoing approach is how you continually drive program improvement, but it has to be owned by someone, the changes have to be based on experience and the metrics have to be documented.

    This is going to represent a major improvement for the sales team if you can get these cycles running at your company. With these metrics and the metrics from part 1 of this article, you’re empowered to see how sales is performing and where to focus improvements.

    Mike Lieberman, CEO and Chief Revenue Scientist headshot
    CEO and Chief Revenue Scientist

    Mike Lieberman, CEO and Chief Revenue Scientist

    Mike is the CEO and Chief Revenue Scientist at Square 2. He is passionate about helping people turn their ordinary businesses into businesses people talk about. For more than 25 years, Mike has been working hand-in-hand with CEOs and marketing and sales executives to help them create strategic revenue growth plans, compelling marketing strategies and remarkable sales processes that shorten the sales cycle and increase close rates.

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