Research: What are the Most Important Metrics to Sales?

Although in the big data era all data are considered important, some data are more important than others. I’m not saying that just because it’s fun to use the correct plural of “data” to construct sentences that seem weird at first read – I’m saying it because it’s true. And we have some numbers to back it up.the most important metrics to sales We polled sales professionals and asked them to rank the sales metrics they valued most. Number one – with the most first-place votes and the aggregate highest score – was lead volume, followed not so closely in first-place votes (but closely in final voting) by lead quality. This reflects a pattern we saw in the 2015 Sales & Marketing Sentiment Survey, where quantity holds a narrow lead over quality in what sales valued most. These are traditionally important metrics – but they don’t really deal with sales performance. They’re about what marketing gives sales. Say what you want about the marketing department, sales folks, but you are clearly concerned with marketing’s effectiveness and see how it links to your success. Several high-ranking metrics on the list are about sales behaviors and how they correlate to success. In third place is conversion rate – still touching a little on lead quality, but also dependent on sales talent for closing the deal. In fourth was average transaction value – how big are the deals sales is delivering? Seventh was discount impact in deal time, an interesting metric for understanding the balance between margin protection and sales acceleration. Pure margin protection wasn’t as important a metric to consider; percentage of list price achieved by product finished tenth on the list. Sixth place was a metric clearly impacted by CPQ: quote to close ratio. Unfortunately, our one-question poll could not ascertain which respondents were using CPQ and which ones were not; the use of CPQ could have dramatic effects on the number of quotes issued (it’s easier to generate them in response to customer feedback), but they could also help sales reps get them right the first time. Languishing in eighth place was incentive spend to quota achieved. This is a little surprising; this metric helps managers understand how well their investments in their sales reps are translating into results. Again, it would be fascinating to see how the use or failure to use a compensation management application impacted these respondents. Two product-oriented metrics took the fifth and ninth spots. In fifth was win/loss rate by product, a metric that can help sales as well as product managers and product marketers. In ninth was product mix compared to sales plan, a measurement of forecasting effectiveness at a granular level. Here are the final results, by aggregate score and with first-place votes in parentheses:

  1. Lead Volume (46)
  2. Lead Quality (25)
  3. Conversion Rate (15)
  4. Average Transaction Value (13)
  5. Win/loss Rate by Product (6)
  6. Quote-to-Close Ratio (11)
  7. Discount Impact on Deal Time (0)
  8. Incentive Spend to Quota Achieved (1)
  9. Product Mix Compared to Sales Plan (6)
  10. Percentage of List Price Achieved by Product (1)

How well do these metrics mesh with the way you examine your business? Are there metrics you depend on that didn’t make the list? If there are, tell us about them in the comments section!  

By Chris Bucholtz | July 7th, 2015 | Other

About the Author: Chris Bucholtz

Chris Bucholtz

Chris Bucholtz is the content marketing director at CallidusCloud and writes on a host of topics, including sales, marketing and customer experience. The former editor of InsideCRM, his weekly column has run in CRM Buyer since 2009. When he's not pondering ways to acquire and keep customers, Chris is also an avid builder of scale model airplanes.