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10 Sales Metrics You Should Know About

“What gets measured gets managed.”

Thanks to these famous words from management consultant and OKRs muse Peter Drucker, businesses have been using data to lead process management for decades — and within an organisation, few depend on data more than sales teams.

Data drives business growth by providing insights and guiding strategy. Sales leaders rely on metrics to help them meet revenue targets. This article will share 10 useful sales metrics to help you write effective OKRs.

10 key sales metrics examples for success

The world of analytics can be confusing, so we’ve compiled 10 examples of sales metrics to help you get started.

1. Monthly Recurring Revenue (MRR)

In sales, Monthly Recurring Revenue (MRR) reveals the revenue a company is estimated to generate from customers for its products or services each month.

Why it matters

MRR is a crucial metric because it tracks your predicted monthly revenue, which you can use for annual forecasting. With historical MRR data, you can also predict company growth and forecast sales.

2. Average Revenue Per User (ARPU)

Average Revenue Per User (ARPU) is how much money a business makes per individual customer. Calculate ARPU by dividing revenue by the number of customers in a period.

Why it matters

A rising ARPU indicates that your revenue is holding its value. This insight will help you meet sales targets without needing last-minute deals. Your highest ARPU customer segments may also determine your best product-market fit.

3. Win rate

Win rate measures a sales representative's overall performance. It is the number of deals won divided by the number of closed opportunities. 

Why it matters

Use win rates to predict how many leads you will need to reach your revenue targets. Sales performance has improved when win rates increase but lead counts remain the same.

4. Average profit margin

Average profit margin measures the difference between sales revenue and overall profits including expenses. Calculate this metric by dividing your company's net income by net sales.

Why it matters

You can understand your business's financial health by looking at the profit margin. If your average profit margin is low, there may be issues in your sales approach. Remember — investors like businesses with good profit margins.

5. Sales cycle length

Sales cycle length is a metric that tracks how long, on average, it takes to close a deal after the first contact. Calculate sales cycle length by dividing the number of closed deals by the average closing time in days.

Why it matters

Sales cycle length is an important metric to track because it can tell you how efficient your sales process is and makes your forecasting more accurate. Teams can also use sales cycle length to check for cold leads.

6. Customer Lifetime Value to Customer Acquisition Cost (LTV:CAC)

The Customer Lifetime Value to Customer Acquisition Cost (LTV:CAC) ratio measures a customer's lifetime value versus acquisition cost.

Why it matters

LTV:CAC tells you if a customer's lifetime value is more or less than the sales spend to acquire them. You might not have a product-market fit if you have a lower ratio. You could invest more in sales and marketing if you have a higher ratio. If you have a ratio of less than one, you're losing revenue.

7. MQL-to-SQL conversion rate

MQL-to-SQL is a percentage that measures how many marketing leads become sales qualified. The leads most likely to become customers are known as Sales Qualified Leads (SQLs).

Why it matters

This metric reveals how well sales and marketing are communicating. Low conversion rates are a chance to work with the marketing team to define SQLs better and optimise how they move through sales funnels.

8. Pipeline deals

Pipeline deals is a metric that reveals the number of active deals in the sales pipeline.

Why it matters

Sales teams can use this metric to gauge their pipeline's health and forecast sales more accurately. This information can help reps re-strategise to ensure they meet their targets.

9. Quota attainment

Quota attainment is the percentage of deals a sales representative, or rep, closes versus their set monthly, quarterly or yearly quota.

Why it matters

Monitoring this metric to see how deals are closing — and how often — is crucial. Low quota attainment across sales teams may indicate a need to switch strategies. This metric also allows you to see which reps may need more guidance on a more personal scale.

10. Average deal size

Average deal size reveals the average dollar value of your deals. It’s found by comparing the total value of closed deals with the total number of closed deals.

Why it matters

Average deal size, first and foremost, is a forecasting tool. Rising deal sizes can indicate growing sales revenue. It also measures a sales representative’s ability to land larger deals and identifies low performers. 

How to improve sales performance metrics using OKRs

Sales metrics are useful for one key reason — to help you identify gaps in your strategy. In order to improve, you first need to understand what’s not working. That’s where Objectives and Key Results (OKRs) come into play. 

Goal-setting methodologies like OKRs encourage companies to identify and overcome challenges. OKRs is the strategy Google, LinkedIn, and Airbnb use to set goals. Even if your business is yet to reach multi-billion-dollar status, using metrics to define your objectives is a step in the right direction.

The following guides will help you set your first OKRs.

Achieve your sales goals with Tability

Tability is an OKRs platform that helps teams achieve their data-driven goals. With Tability, you can build empowered teams to help you achieve your objectives.

Whether you need to increase your average deal size or improve your profit margins, Tability can help you reach your objectives. Try it for free today!

Pair your

Sales

Metrics with OKRs

Check out our OKRs for

Sales

guide, and connect your favorite Success Metrics to objectives you can execute on.

Browse OKRs Examples →

Pair your Success Metrics to OKRs

Check outour OKRs Examples and connect your favorite Success Metrics to an objective you can execute on.

Browse OKRs Examples →

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