For good reason: selling is critical to a business growing in size. After all, what good is it to have the most amazing product or service in the world if no one knows it exists? Effective approaches to selling can help make or break a business. But there are so many data points you can look at, it’s difficult to know which are the most important.
Follow conversion rates (sometimes called win rates), quota attainment and average deal size closely. Also, monitor usage metrics as proxies for customer satisfaction.
Customer Satisfaction
‘You can’t manage what you don’t measure’ is not just an adage is, but one that rings truest where sales metrics are concerned. The number of opportunities that your team tracks over time is important, but understanding the reasons for your team’s sales losses is just as important. If there is an increase in losses, it can signal that either your product doesn’t fit its market or your messaging is off. Higher average customer lifetime value (LTV) means that your customers are actually using your products and services. LTV can be calculated utilising numerous customer satisfaction scores, from net promoter score (NPS) to net constructive response (NCR) to conversational analytics.
Customer Lifetime Value
Today, there are many sales metrics available across the different stages of a sales workflow to track individual as well as team performance. Your exact metrics will depend on your SaaS pricing strategy, go-to-market plan and structure of your sales organisation. Sales opportunities that are created and then realised in actual sales (or are signed to) are one of the top sales KPIs, so the pipeline health is quite real and the forecast is, or isn’t, accurate. But calculating it can also help to identify higher-CLV customers, and help to inform marketing strategies based on this information; after all, if you don’t know what you’re starting with, you can’t calculate this figure accurately.
Customer Satisfaction Score
Customer satisfaction is one of the cornerstones of customer loyalty and retention, and being able to capture and measure customer’s feedback through CSAT surveys or other metrics for customer experience like NPS or CES, and act upon customer feedback has become an established feature of the high performance organisations around the world. The standard NPS measures on a scale of 0-to-10 how likely it is that your customer would recommend your company to others. This index can be broken down to identify potential customers who are at risk of churning and into sections that need to be worked upon. Much like NPS, we have Customer Experience Score (CES), which measures how easily a task was accomplished between your customers and the product/brand/service that originally sparked the interaction. These key sales performance metrics are a source of valuable insight on which decisions can be made based on data. For example, say a company has a high lead-to-opportunity conversion rate and a low CSAT score. It would tell you that your marketing campaigns are doing well, but they are failing to satisfy the customers.
Customer Retention Rate
For every business, this metric tells the proportion of people/companies who continued to purchase product at the end of the given period (usually a year) – begin with customer count minus new customer acquisition at end of periodic segment. This sales KPI gives companies visibility on whether customers are satisfied or disappointed with their products or when the latter is the case, a lack of product/market fit (i.e. a mismatch between product and market) or suboptimal marketing messaging may be the underlying problem. Customer retention needs to reach a maximum of 100 per cent (ideally), while on an industry average, it sits at 70-80 per cent. Naturally, different customer segments may have different rates of retention, and this information also needs to be ascertained, as to find out why each customer segment’s clientele leave also plays an important part of having successful retention rates.
Customer Churn Rate
The customer churn rate is an important sales figure for any business that operates on a recurring income as it measures how many customers your business loses. It can also guide you in where more effort is needed. You can calculate your churn rate by first identifying at the beginning of a period (for example, a quarter) the total number of customers who are with you. Then determine the number of churned customers out of the total numbers of customers, multiply it by 100, and you have a churn rate metric – this is a fantastic leading indicator that tells you what your results are likely to look like before the fact, and when you still have the ability to affect them and deliver results.
Customer Acquisition Cost
Customer Acquisition Cost, shorthanded to CAC, is the amount of money a business spends bringing on new paying customers. That includes programme and ads costs, but also things like employee bonuses and commissions. Note your sales cycle length when you are measuring CAC costs for B2B and/or SaaS companies, otherwise it could be an inaccurate measurement, leading to wrong conclusions and therefore the wrong spending decisions. Measuring CAC over a very short period could lead to an inaccurate cost. You can use CAC to know what marketing and sales tactics draw the most new customers for your organisation.
