What is a Sales Metric & Why is it Important?
The global Education Technology market was valued at $89.5 billion at the end of 2020, and the growth is not going to stop. EdTech is expected to achieve a 19.9% compound annual growth rate between 2021-2028.
If you work in the EdTech business, you are surely hoping to see similar increases within your company performance. However, to truly know how your business is performing, it is essential to track specific sales metrics to understand how much your company is growing compared to 1) how much you want to see it grow and 2) how quickly the market itself is increasing. Additionally, tracking important sales metrics will help your company to identify where you need to adjust spending and energy to reduce the risk that you waste crucial assets.
The following article identifies six sales metric areas to watch: commercial sales metrics, activity metrics, lead generation metrics, productivity metrics, indicators of leading and lagging, and tracking tools.
1. Commercial Sales Metrics
Commercial sales metrics can be the most important sales metrics that your company should monitor.
A. Total Revenue
One of the most important sales metrics to track is total company revenue. Without a proper understanding of overall revenue, making business decisions is extremely difficult. Tracking revenue can happen on a monthly, quarterly, or yearly basis.
B. Average Revenue Per Product, Good, or Service
This metric applies to products, services, and other goods offered by your company. The average revenue per product measures how much money is made off of a particular product, good, or service during your selected time frame.
C. Win Rate
Win rate is the ratio of closed deals compared to the total number of leads brought in by your company. For example, perhaps your sales team contacted 50 people this week and closed 25 of those deals; your win rate would be 50%. This metric is important to track as it helps to realize how well your sales team performs compared to how well your sales team could perform.
Other important sales metrics to track include market penetration, year-over-year growth, ratio of revenue between existing and new customers, the lifetime value of a customer, net promoter score, pipeline coverage, quota attainment, and sales expense ratio.
2. Activity Metrics
Activity metrics for sales show what daily tasks your sales team is performing. As you might imagine, your sales team’s daily activities directly impact your general sales metrics and the overall success of your company. Tracking these metrics will help you know how your team can be more productive with its time.
Below is a list of the daily tasks your sales team is most likely participating in. Analyzing these metrics will help you know which of these helps or hinders the company’s overall efforts to sell its products and services.
- Conversations in office
- Social media interaction
- Referral requests
3. Lead Generation Metrics
To have a successful business, a company must be able to locate relevant leads for its business. Without leads, a company is left without customers, therefore making it unprofitable. Tracking your company’s lead generation increases awareness about how well your sales and marketing teams are pulling in pursuable leads.
If your team is struggling to find leads, chances are those departments are not performing as successfully as necessary. If leads are generated frequently, chances are your sales and marketing teams are successfully utilizing the following metrics.
- Amount of new opportunities
- Customer per acquisition cost (CAC)
- Response time of a lead
- Qualified leads
- Dropped leads
- Ratio of lead follow-up
4. Productivity Metrics
Productivity metrics allow you to track how efficient your sales team is at using its time. Where activity metrics track the specific things your sales team is doing every day, productivity metrics track how closely your sales team is meeting its sales goals for the month, quarter, or year.
The faster a sales representative is at closing a sale, the more productive they are at utilizing time. Productivity metrics include items from the following list.
- Amount of time selling
- Amount of time developing content
- Amount of time entering data
- Amount of sales tools used
- Ratio of following up with high-quality leads
5. Indicators of Leading and Lagging
Leading and lagging indicators directly indicate how successful your sales team is. Leading indicators demonstrate early on how your sales team is performing. These indicators actually lead to the results your team is looking for as by demonstrating how well your team is achieving its goals. Leading indicators, which help determine revenue, include how many emails or calls each of your sales representatives is reaching per hour. The higher that number, the more likely your company is to make increased revenue.
Lagging indicators often take a long time to demonstrate results. Lagging indicators include gross revenue, the number of units sold, the number of deals won and lost, and even how many different products are sold. Lagging indicators point to weaknesses in your sales funnel to help you find the best way to address each issue.
6. Best Tracking Tools for Sales
Now more than ever, utilizing sales tracking tools will lead to increased success. Utilizing a customer relationship management tool (CRM) enables your sales team to be as successful as possible as it automates the process for tracking much of your sales success.
The following are some of the most highly rated CRM softwares to use for your sales team.
- Hubspot Sales Hub
- Revenue Grid
- Zendesk Sell
- PipeDrive CRM
- OnContact CRM
- Netsuite CRM
- Maximizer CRM
- Zoho CRM
Find the Best Talent for Your Organization
Measuring, monitoring, and evaluating the right metrics is critical to a company’s success. The Renaissance Network (TRN) has focused on the fact that hitting impact, revenue, and other metric goals are the outcome of a high-performing Education industry team. TRN understands that each organization has its own unique business model. As a partner, TRN works with you to provide a customized recruitment strategy to yield the best talent.
To learn more about TRN’s process and find out how we help organizations quickly meet hiring needs by providing a pool of skilled candidates, contact us today!