The Leading Sales Metrics That Matter Most

by Apr 25, 2018Solution Selling0 comments

Leading Sales Metrics
We define leading sales metrics as measurements of key sales activities that are both predictable of the results you want to achieve and under your control to influence.  Many sales teams do not take advantage of leading sales metrics to paint a clear picture of how their sales force is performing or how their sales strategy is progressing.

Lagging Sales Metrics
We define lagging sales metrics as measurements of the results you want to achieve.  For example a revenue target of $5m is a lagging sales metric and the number of in-person client meetings is a leading sales metric.

The Top 10 Most Common Sales Metrics
The majority of sales leaders report focusing on some combination of 10 sales metrics.  Every one can be considered to be a lagging sales metric (i.e., a desired sales result) not a leading sales metric (the key predictable and influence-able activities that lead to a desired result)

  • Net New Revenue
  • Current Account Growth
  • Margin
  • Win Rate
  • Portfolio Mix
  • Deal Size
  • Sales Cycle
  • Percent of Organization Achieving Quota
  • Average Annual On Target Earnings (OTE)
  • Vertical Market Penetration

Manage What Matters
The good news is that improvements in sales technology make it much easier to measure almost anything sales related.   Solution sales leaders know that leading sales metrics, not lagging sales indicators, make all the difference if you want to change behavior and create high growth.  Why?  Because lagging sales metrics happen after the fact.  While you can learn from lagging sales results, they do not allow you to make adjustments to meet current sales targets.

Rather than pay too much attention to past sales results, why not focus on what is most predictive of sales success?

Examples of Leading Sales Metrics to Consider

  • Ability to effectively qualify leads
  • Ability to identify the critical business issues
  • Ability to link your solution to what matters most to the client
  • Ability to quantify the value of your solution
  • Ability to clearly differentiate from the competition
  • Weighted value of the pipeline
  • Timing and number of sales calls and meetings
  • Time spent selling
  • Lead response time
  • Percent of leads that match target client criteria
  • Level of buyer
  • Number and quality of client relationships
  • Number of onsite demos
  • Quality of sales presentation
  • Opportunities lost
  • Number of proposals sent
  • Compliance to sales methodology and sales process
  • Consistency, quality and frequency of sales coaching
  • Level of sales team engagement

Smart sales leaders know how their reps are spending their time and what specific sales activities have the highest correlation to success.

How to Identify Leading Sales Metrics
First, look closely at your sales process and methodology.  Then determine which vital few parts of the sales cycle matter most to achieving your lagging sales metrics in your unique situation.  For example, through interviews and data analysis one recent client determined that out of thirty-nine distinct sales steps, four (10.3%) mattered most in terms of quota and margin attainment:

  • Effectively identifying and profiling the opportunity
  • Understanding the compelling customer event
  • Identifying the competition
  • Validating the technical and business processes during the customer demo

Once you know the sales stages and steps that matter most for your lagging sales metrics, determine how you monitor the parts of them that are predictable and influence-able.  For example, for the list above, the client decided on the following leading sales metrics:

  • Percent of time the sales manager believed the opportunity was correctly identified and profiled
  • Percent of time the customer explicitly agreed with the compelling event
  • Percent of time the buyer disclosed the competition and buying criteria
  • Customer feedback scores after the demo

The Bottom Line
Most sales teams have identified lagging sales metrics to track performance.  If you want to outperform your peers, invest the time to identify the critical few leading sales metrics that are under your control and are most predicative of where you and your team want to go.

To learn more about improving sales team performance, download How to Optimize Your Sales Force in the Face of Increased Pressure

Pin It on Pinterest

Share This