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The Center for Sales Strategy Blog

5 Metrics that Should Matter Most to Sales Managers

metrics that should matter to sales managersEditor's Note: This post was originally published in Sales & Marketing Management.

As a sales manager, you spend serious time and care setting clear expectations; this is how you help your salespeople approach their work with purpose. But to see real improvement, you need a system in place that measures how those expectations are being met.

Unfortunately, this is easier said than done. You’ve got so much on your plate—there are so many threads and tangents crisscrossing your managerial path every day—that you risk spending all your time pulling reports and never being able to actually dive into the data you’ve collected.

Worse, metrics these days are like pop songs: They’re catchy for a while until a new one comes along and grabs everyone’s attention. A sales manager I once knew was in love with a particular metric: the number of calls each seller made in a day. While call volume certainly contributed to sales success, it shouldn’t have been this manager’s sole focus. What he ended up creating was a team that blustered through calls without making meaningful progress with sales.

Measurement can be a wonderful thing that helps make course corrections and improves performance in a rational way, but its benefits are only evident by focusing on the core metrics that are meaningful to a company’s success.
 

To personally find focus as you help your salespeople find theirs, here are measurable, tried-and-true metrics to catalyze positive progress:

1. The Number of Quality Appointments Each Sales Rep Attends Per Week

Appointments are an obvious metric tied to success, but they’re rarely tracked. To improve sales, your reps must make more quality appointments (i.e., appointments that have a higher chance of success). Start by defining what “quality” means for your company: Is it meeting a customer with a particular need? Is it an opportunity to present your solution in a certain way?

Here’s how to measure: Once a definition is firmly established, it’s easy to measure quality appointments. You can either plug them into your customer relationship management system or, if you don’t have CRM, print your calendar and color-code the appointments that meet your criteria. Then, with a simple glance, you can discern how much time each rep is spending at quality appointments.

2. The Size and Quality of Your Talent Bank

As a sales manager, you should be in constant recruitment mode, always looking for potential salespeople to join your organization (or for ways to enhance your existing talent level). But most managers are so focused on sales metrics that they forget to measure how strong their team is.

Here’s how to measure: Set up an ongoing record of your talent bank, and review and update it at least once a month. You can discover whether your team is becoming more diverse and successful. Additionally, you can discern whether you’re filling it with fresh energy or letting inactive members drag down results.

3. The Quality of Leads Coming into the Sales Department

This is the star metric to live by if you want to see improvement in sales revenue, but the measures for judging lead quality can be numerous and intertwining. The first step to conquer this: Create space in your organization for lead managing and sales managing. Dedicate talent and time to the top of the sales funnel.

Here’s how to measure: Your “lead flow” is the number of new leads coming into the sales department each month. Get specific in tracking both the total number of leads and where each came from. Once you’ve made leads visible in this way, you can start measuring patterns—where winning leads are coming from will tell you where to focus your efforts.

4. The Number of ‘No Surprise’ Proposals Presented Each Week

Proposals are a critical measurement. If salespeople aren’t presenting proposals, they’re certainly not closing deals. But simply tracking the number of proposals leaving your office will be misleading. Not all proposals were created equal. The ones you want to watch are the “no surprise” proposals—the ones that are created alongside clients with their collaboration. These pitches have a high probability of closing.

Here’s how to measure: Much like quality appointments, “no surprise” proposals can be measured by inputting proposals into CRM or a spreadsheet. By color coding according to quality and outcome, you can increase the numbers of those particular proposals versus shot-in-the-dark proposals that may waste your team’s time.

5. Closing Ratio and Budget Achievement

To track overall success while using the above metrics, measure how often salespeople are able to close and how closely budgets can be attained. The two metrics go hand in hand, but while budget achievement looks at what has occurred, closing ratio gives you a vision for the future. Closing ratios help discern a salesperson’s quality, understanding of client needs, and future performance.

Here’s how to measure budget achievement: Record your starting budget and your team’s final spend. From there, you can spot overspending and underspending and connect these patterns to your other key metrics. To measure closing ratio, divide the number of sales by the number of outgoing proposals or quotes (whatever unit you’re working with).

As a sales manager, you’ve got metrics coming out of your ears. You could focus on any one of them, and sometimes you’re expected to focus on all of them at once. By keeping your compass firmly set on these five crucial measurements, you’ll be able to consistently carve out success.

Talent Insight

Topics: sales management metrics