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Sales Metrics, Foundation for Building and Scaling a World-Class Sales Force.

What gets measured gets done! Data is the key to making informed decisions and achieving success. Without analyzing these indicators, it can be challenging to identify areas for improvement. That's why successful companies focus on measuring every aspect of their go-to-market model, sales strategy, and sales team. But focus on the core and expand when your company matures. Here is an overview of common sales metrics.

Sales metrics are key performance indicators (KPIs) used to measure the effectiveness of a sales team and the overall sales performance of a business. The specific sales metrics that are important will vary depending on the industry, business model, and goals of the organization. However, here are some common sales metrics that businesses use to track their performance:

  1. Sales revenue: The total revenue generated by the sales team over a given period of time.

  2. Sales growth: The percentage increase or decrease in sales revenue over a given period of time.

  3. Sales cycle length: The amount of time it takes for a sales team to convert a lead into a paying customer.

  4. Conversion rate: The percentage of leads that are converted into paying customers.

  5. Customer acquisition cost (CAC): The amount of money it costs to acquire a new customer.

  6. Customer lifetime value (CLV): The total amount of revenue that a customer is expected to generate over their lifetime as a customer.

  7. Average order value (AOV): The average amount of revenue generated by each customer order.

  8. Sales pipeline: The total value of deals that are currently in the sales process but have not yet closed.

  9. Lead response time: The amount of time it takes for a sales team to respond to a new lead.

  10. Win rate: The percentage of deals that a sales team successfully closes.

These metrics can help businesses identify areas where they are performing well, as well as areas where they need to improve. By tracking and analyzing these metrics on an ongoing basis, businesses can make data-driven decisions to optimize their sales process and drive growth. During my Gartner tenure we focused the sales force on two very important metrics: Contract value (CV) per sales executive and more importantly Net Contract Value Increase (NCVI). In the day-to-day management the only metric that mattered was NCVI. When a sales executive lost CV because a client did not renew business the rep had to off set the loss with more NCVI. A very simple and effective way to focus on revenue growth. The result? 30+% year on year growth. With the expansion of the sales force and implementation of CRM and other tools more metrics were introduced to optimize sales territories, processes, product portfolios and marketing.

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