Best sales metrics to prepare you for 2023
Each company must have pre-defined parameters and metrics to succeed in optimally understanding and bettering its sales process. If you can’t measure what you’re working on precisely, you can’t work on bettering it.
We now have more sales data in our hands than ever before, thanks to strong AI-based solutions—but simply having access to sales analytics isn't enough. Understanding what to measure and how to interpret the findings to hit sales and revenue targets is critical.
Although different metrics will work for different companies, a few work across all and are paramount to getting strong insights. Here is a list of a few of these.
ARR or Annual Recurring Revenue
ARR, or annual recurring revenue, is the revenue generated by your company each year. It's an important key metric to track because it tells you how much money you can expect to receive from customers in a given year. ARR can give you important insights about a company's growth and aid in forecasting when its data is leveraged historically.
Pipeline coverage tells you how many more deals your pipeline has compared to how many you wish to convert. This is the simplest yet most critical metric. It gives you an easy idea of how your future will look. A company must keep at least four times the pipeline of the deals it wishes to convert at any given time.
The percentage of deals closed within a specific period, resulting in converting potential customers, is called the conversion rate. It helps you understand how you are doing concerning the plan you charted and whether or not the pipeline coverage you have is enough to achieve that. It also gives you insight into how your sales reps perform and if any necessary coaching is required to alter their results.
Quota fulfillment refers to the number of deals a sales rep can close concerning the quota given to him. As you can see, this metric helps you understand the performance of sales reps cumulatively and individually.
If you see all underperforming, you need to change something in the system, like maybe providing more coaching or investing in a better sales tool. But if some are and some are doing well, then you need to address that by effectively taking up individual issues the reps who aren’t performing well are facing.
Deal slippage refers to the number of deals in the commit stage that do not close within the expected time frame. A slip occurs when a deal committed for Q1 is pushed to Q2 for various reasons, such as project stalling or budget freezes.
The widespread belief is that any slippage is bad. In reality, every company experiences deal slippage. What matters is that you understand your average slip rate to plan accordingly.
The number of customers who cancel or do not renew their subscriptions during a given period is called the churn rate. Customer churn is important to know whether you can hold customers back.
If you get some and lose some simultaneously, you need to change your strategy, provide reps effective coaching, or do something different (which you have to identify) to prevent this further.
Net retention refers to the number of customers who are retained. This is a great indicator of customer satisfaction. It tells you whether your relationship with your customers is healthy, if they’re happy with your product and services and whether you can keep their content.
These are a few metrics we feel are important for any sales process to form a strong base. With Clientell’s Revenue Intelligence platform, you can easily track these indicators in real time with pragmatic visual insights. To know more, check this note we wrote on Track quota attainment by rich sales data.