Your issue as a sales manager or leader is unlikely to be a lack of data. It’s an excessive amount of information. After all, we can measure anything with today’s instruments, even performance marketing, and we do.
There’s a seemingly limitless variety of KPIs, reports, and data points, ranging from the proportion of reps utilizing your CRM and cohort retention rate to the average time to hire and sales velocity.
Let’s face it: it’s exhausting. And when you’re overwhelmed, it’s difficult to analyze, comprehend, and make informed decisions.
So, what’s the answer? Increasing the focus of your attention. Instead of keeping track of everything, keep track of the most significant things. You’ll be able to understand the trends and their relevance more easily, and you’ll be able to complete your research more quickly.
What Are The Many Types Of Performance Metrics?
The tasks and activities of a company or its workers are measured using performance metrics for performance marketing. They can be measured across days, weeks, months, or years and are frequently quantitative. To determine ideal performance, several metrics are tracked and ranges are chosen.
Performance metrics are used by businesses to see if their results in performance marketing are in line with their objectives. When a performance metric falls outside of the set range, it shows underperformance. And if an outcome falls within or above the range, the company is on track to accomplish or surpass its objectives.
Related: What is sales training?
What Is The Significance Of Metrics?
Metrics are significant because they assist organizations in evaluating performance and informing their decision-making based on the metrics’ analysis through performance marketing. For example, if a company’s revenue is dropping month after month, they should look into their activities to figure out what’s causing the problem and how to fix it.
Your sales organization, industry, and firm determine the “correct” metrics in performance marketing. These five KPIs, on the other hand, are typically crucial for sales leaders across the board.
The most significant sales performance measures for your sales staff to track are listed below.
Metrics For Sales Performance
1.Percentage of salespeople that meet their quota
2.Deal size on average
3.Win rate/conversion rate
5.Leakage in the sales funnel
1. Percentage Of Salespeople That Meet Their Quota
The percentage of salespeople in performance marketing meetings or exceeding quota, or quota attainment, tells you whether your quotas are too high or too low. If less than 60% of your quotas are being met, your quotas are probably unrealistic. It’s also possible that you’ll need to hire better salesmen and/or fire those who aren’t performing well. The last possible perpetrator? Your compensation strategy for salespeople. Examine your compensation plan to evaluate if you’re pulling the right strings to entice salespeople to sell.
On the other hand, if 90% to 100% of your salesmen meet their quota, they’re probably coasting. Examine your quota-setting procedures; you might want to raise your targets.
2. Deal Size On Average
Divide the total number of deals by the total dollar amount of those deals to get your average deal size.
When you look at this metric on a monthly or quarterly basis, you can see if your contracts are growing, shrinking, or staying the same. You want the average deal size to increase if you’re aiming to move upmarket. If you want to attract more SMB consumers, you want this figure to decrease (and your overall revenue and number of customers to go up).
The average deal size in performance marketing might also assist you in identifying potentially dangerous transactions. Let’s imagine one of your salespeople adds a four-times-larger-than-normal opportunity to the CRM. Not only would there be a lesser chance of closing, but the sales process will also take longer. You should double-check that the other agreements in this rep’s pipeline are almost certain bets, and that they aren’t betting all of their quota eggs in one basket.
Additionally, keep an eye out for any salesperson whose average transaction size is much lower than the team’s. This could indicate that they’re focusing on low-hanging fruit and need to work more to get more competitive or larger consumers. Alternatively, they could be overlooking too much danger.
Related: Lead Generation: Can It Be Useful For Your Products?
3.Conversion Rate, Also Known As Win Rate, Is The Percentage Of People Who Convert Into Customers
Your conversion rate, also known as your win rate, is the percentage of leads who become customers. Your conversion rate is 10% if you receive 500 leads each month and 50 of them buy your product on average.
This number might assist you in determining how many leads you’ll need to meet your revenue goals through performance marketing. Your salespeople must close 800 deals if your monthly team quota is $800,000 and your average deal size is $1,000. If 10% of your leads turn
into clients, you’ll need 8,000 leads per month.
Historical conversion rates can also be used to determine whether or not your salespeople are getting more effective. If your average win rate is rising — and you’re closing the same or better than before —
Something is probably wrong with your process, team, and/or lead generation efforts if your win rate is lowering — while your quantity of deals is flat or decreasing.
Keep in mind that as you approach upmarket, your win rate will most likely decrease. When a company moves from SMB to mid-market or from mid-market to enterprise, closure rates drop temporarily.
Related: What Is Lead Nurturing And What Are The Right Tactics?
Revenue is, at the end of the day, the most essential KPI. But, while gross income appears to be a straightforward statistic (it’s simply how much money you made in a certain period of time, including discounts and returned merchandise/products), it’s not without nuance.
If you run a subscription business, you presumably measure income in terms of monthly recurring revenue (MRR), which is the total amount of predictable revenue you get each month, and annual recurring revenue (ARR), which is the total amount of predictable revenue you get each year.
Your MRR is $150 and your ARR is $1,800 (or $150 x 12) if you have 30 customers and the average monthly payment is $50.
Break down your resentment:
New business percentage (customers who have never bought anything from your company before)
Upsell/cross-sell/expansion percentage (existing customers who are buying another product or upgrading to a higher tier or package)
Renewal rate (percentage of consumers who renew their contract for another month, six months, year, etc.)r
Growing a specified percentage will be significant depending on your business goals. Perhaps the majority of your customers leave after six months; while you worked to enhance customer retention, you hoped to see your renewal % rise.
Perhaps you’re attempting to increase your cross-sell rates. The second % is the one you should aim for.
It’s also critical to go over your numbers again. When one percentage increases, the others naturally decrease, but this does not imply that your new business revenue, for example, is decreasing.
5. Leakage In The Sales Funnel
Measuring sales funnel leakage in performance marketing identifies the points in your funnel where the most leads exit.
Track stage-by-stage conversion rates to find your leaky spots. For example, let’s say 40% of new leads agree to a discovery call. Only half of them advance to the demo stage. Only 5% of people make a purchase. Your salespeople are most likely A) not qualifying sufficiently, B) offering unsatisfactory demos, and/or C) negotiating poorly in performance marketing, based on the steep drop-off. Knowing about these potential problems in performance marketing allows you to examine them more deeply in order to find the genuine culprit.
Related: What is a sales funnel?