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Top 5 Sales Performance Metrics for Sales VPs & Managers

Published On: September 1, 20205.2 min readBy

When it comes to selling, you’re only as good as your numbers! In recent years, among various business activities ‘marketing’ has quickly evolved into a data-driven phenomenon. But unfortunately, sales hasn’t caught up as quickly.

When it comes to selling, you’re only as good as your numbers! In recent years, among various business activities ‘marketing’ has quickly evolved into a data-driven phenomenon. But unfortunately, sales hasn’t caught up as quickly.

Just like marketing, sales is influenced by a number of factors that directly (or indirectly) contribute to its success. Factors like as sales cycles, number deals in the pipeline and so on. But still a lot of times the performance evaluation of the sales team still heavily relies on age-old indicators like calls-per-day and quota.

While this isn’t bad, but isn’t enough either! Let me tell you why.

As a sales manager, you have many responsibilities. And one of your key responsibility is to manage and coach the performance of your reps. To do this, you’ll need to precisely identify each of the activities that your reps perform and be able to compare them against the goals. In addition, you need to measure how productive the activities are, for example, how many connects your reps have been getting? How many of those lead to demos and deals etc. This will help identify any performance deficiency and put a coaching strategy in place.

So, you see, measuring just calls-per-day and quota hardly helps with anything along the productivity lines.

And as a sales managers, it is important that you stay on top of the key performance indicators, especially since it helps measure sales activities that directly contribute to the results.

So in this post, we’re going to outline some of the key sales performance metrics that you can measure as a part of your performance tracking routine.

#1 Number of open deals per rep

Definition: It is the number of deals that are ‘open’ and are being chased by the rep to close.

Why is it important: This number tells you how many deals are there in the funnel for your rep(s) to close. If a rep is required to farm his own leads, then this number tells you how effective his farming activities have been.

#2 Sales Cycle

Definition: It’s the amount of time between the first contact with the prospect until winning the deal, measured in days. You can simply average this number across all your wins to measure the Avg. sales cycle. Here is a simple way to calculate your Avg. Sales Cycle:

Simply divide the above number by the total number of ‘Won’ deals to get the Avg. Sales Cycle (in days).

Avg. Sales Cycle = [# Combined Sales duration in days] ÷ [# of total ‘Won’ deals]

Why is it important: Knowing your Avg. Sales cycle helps predict future sales. So you’ll know how your ‘sales’ will look like in a month, quarter etc.

Furthermore, the ‘Avg. Sales cycle’ is not just a mere sales metric, it has a direct impact on revenue growth. Some of the fast-growing companies tend to have a smaller sales cycles. The idea being, the quicker you’re able to close deals, the faster the money comes in!

#3 Deals Size

Definition: It is the average ‘purchase’ value of the deal (in $ dollars). Based on your business model, you could calculate the deal size based on the overall contract value, or alternatively on a monthly or an annual basis. Most subscription businesses tend to go with contract renewal period (either monthly or annual).

Avg. Deal Size = [Sum of value ($) of all deals] ÷ [Number of deals]

Why is it important: This metric adds a lot of value to the overall business.

Helps to classify open deals.

The bigger the deal size is, the longer it takes to close them. Also, the win rates tend to differ based on the size of the deal. So this metric, out of the box, helps you classify opportunities into small or big, so you can easily work with the rep to adjust sales approach accordingly to maximize chances.

Helps identify trends

If you notice a gradual decrease in the Avg. deal value, perhaps it’s due to reps not closing big ones. Or maybe they are leaving money on the table by giving discounts to close the deals or perhaps it’s the competitive pricing that’s getting prices down. Whatever it maybe, you can quickly identify the trend by monitoring the Avg. deal size.

#4 Number of Deals Won and Win rate for each rep

Definition: Well this one is a no-brainer, it is the number of deals the rep closed – won for a given period. And the win-rate is the number deals won divided by the total deals chased.

Win rate (%) = [Number of deals closed – won by the rep] ÷ [Total number of deals chased by rep] %

Why is it important:  While other metrics helps measure the effort, this one helps measures the result. With win-rate charted out for your reps, you’ll know who is your top sales guy when it comes to closing and probably who should handle important deals.

#5 Avg. Lead Response Time

It is the Avg. time it takes to ‘follow-up’ with incoming inquiries. Inquiries can be anything from a phone call, chat request, sales contact form filled out on the website etc. Here is how to calculate:

Sum of all Response times = [Time (or Date) of the incoming request] – [Time (or Date) of the follow-up]

Avg. Lead Response Time = [Sum of all Response times] ÷ [total incoming requests]

Why is it important:  Generally, incoming inquiries are warm compared to outbound prospecting ones. And warm leads tend to progress faster compared to cold ones. By measuring the Avg. lead response time, you will know how soon your sales team is able to get in touch with inbound leads and incoming sales requests. The key is to make sure the leads are followed-up while they are still warm.

Here’s a research data worth considering,  Dr. James Oldroyd published the Lead Response Management Study, which shows company sales representatives have a short amount of time to respond before their leads become “cold.” [2]

The odds of making a successful contact with a lead are 100 times greater when a contact attempt occurs within 5 minutes, compared to 30 minutes after the lead was submitted. Similarly, the odds of the lead entering the sales process, or becoming qualified, are 21 times greater when contacted within 5 minutes versus 30 minutes after the lead was submitted.” (Oldroyd, 2007)

So there you have it, these are 5 key metrics that you need to keep close tabs on the measure and optimize your sales efforts.


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