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How to Build a Personalized Sales Metrics Strategy (in Just 6 Steps)

sales metrics strategy image
AmbitionChoicePartnerSales Management

If you want to compete in the modern sales world, your team and your strategy must track the sales metrics that drive success for your organization. Power your team with data, and you’ll bring instant alignment to the sales floor — because everyone will know exactly where they stand and what’s expected of them.

Plus, you’ll be able to set the right goals, hold people accountable to their numbers, and know how and when to course-correct if your team is headed off track.

That level of transparency is a crazy-effective motivator. In fact, according to our State of Sales Performance Report, 32% of reps said that visibility into numbers gets them more fired up to sell than anything else (including awards programs!).

Which makes it all the more puzzling that — according to the same survey — over 30% of reps don’t get visibility into their performance on a daily basis. Yikes! That’s a whole lot of people who are working in the dark, hoping that all of the calls and meetings are somehow moving the needle.

Sales Metrics vs Sales KPIs

You might be saying to yourself, That’s not me! I’ve built a metric-driven team!

And perhaps that’s true. Maybe you’re tracking activities and working toward a number — but are they the right activities? Is it the right number?

We often hear sales teams talk about metrics and key performance indicators (KPIs) interchangeably, and that’s no surprise given how even a quick Google search reveals conflicting definitions of the two.

And therein lies the problem…

Sales metrics are important, but it’s up to you to determine which ones are true measures of performance — i.e., which numbers, as they change, are ultimately tied to more deals closed, and more revenue won?

Those are your sales KPIs — the numbers that actually move the needle for you. And if you truly want to be a metric-driven team, those are the metrics that you must build your entire sales strategy around.

Not sure where to start? We’ve got you covered. Here are 6 steps to ensuring you’ve got a successful sales metrics strategy in place — built around the sales KPIs that matter most — so your whole team can hit (or exceed!) your ultimate revenue target.

6 Steps to Develop Your Sales Metrics Strategy

  1. Understand the sales metrics you need to track
  2. Identify your sales KPIs
  3. Set the right goals
  4. Build your scorecard
  5. Stay accountable
  6. Coach your team to success

1. Understand What Types of Sales Metrics You Should Be Tracking

There are three types of performance metrics you should be working toward: Activity metrics, Objective metrics, and Moneyball (effectiveness) metrics. Now, let’s take a look at each.

Activity sales metrics are where the hustle lives. This is the daily grind that your sales reps live and breathe every day, whether it’s picking up the phone, meeting with clients, or messaging prospects on LinkedIn. Typically, you need to measure the quantity of these activities:

  • How many calls are they making in a week?
  • How many calls are they making in a month?

Objective sales metrics are the longer-term outcomes that all of those activities help create. These are metrics like…

  • Revenue
  • Profit
  • Leads converted
  • Closed/won deals

… which all add up to your overall priority metrics (or North Star number — more on that in a bit).

Moneyball sales metrics add critical value for sales coaches and GMs looking to assess, align, and optimize their teams as efficiently as possible. This measures the effectiveness and efficiency of the various activities your reps are performing; think of them as conversion points.

  • How many calls turned into conversations?
  • How many of those conversations turned into scheduled meetings?
  • Focusing on the conversion rate helps your sales reps see where their skill and strategy come into play and how that impacts their bottom line.

Examples of Key Sales Metrics to Track

Most sales teams track the number of scheduled meetings or calls, but that’s just the start. What you really want to know is: Did the meeting result in the next step in the sales process?

Here are four metrics you may not be tracking, but you should:

Conversations – Dials are incredibly important — but are those calls effective? How often are your team members connecting, and many conversations are they having?

Talk Time – Optimizing each conversation length can help you see where things are going well and where they might go awry. Understanding a typical conversation length for a given type of conversation can give you another indication of the quality and skill of your sales reps.

Positive Disposition Calls – Of those conversations, how did the prospect react? It’s extremely useful to know what percentage of conversations had positive or negative sentiment. Did the prospect schedule a next step?

If a rep is having a lot of conversations that stop short by a prospect responding, “I’m not the one to make this decision,” or “I’m not interested,” it might be time to re-evaluate your qualification process. Sentiment gives us some detail on how effective the person’s skills are around running a product demo or qualification call.

Rate of Progress – A sales rep can only schedule so many meetings per week or per month. How fast can they move those prospects into a positive next step? Rather than focusing on having ten meetings in a week, focus on the conversion rate to the next opportunity stage.

Once you see how a group of 4, 8, or 50 salespeople move leads through the sales process, you can determine where and how to coach them when they get stuck.

Related: Sales Metrics 101: How to Find and Fix Those Dangerous Cracks in Your Sales Funnel

2. Identify Your Team KPIs

Most reps and sales leaders think top sales KPIs are Revenue Generated, Pipeline Generated, and Opportunities Created, according to our State of Sales Performance Survey.

But this doesn’t tell the full story, because if you’re only paying attention to your end goal, you won’t find out whether you hit it until it’s too late. You must have a full understanding (and keep track of) the daily activities that lead up to that final objective.

To identify your team KPIs:

Step 1: Start With Your North Star Number(s)

How do you make sure you’ve got the right sales KPIs on your radar? Determine where you’ve got to get, which is, for most sales teams, the ultimate revenue goal for the sales organization. This is the number your team is trying to hit as a unit, and it can be a quarterly or annual number.

Step 2: Work Backwards to Define Opportunity Stages

Once you know your North Star Number(s), work backward to define the opportunity stages that align with your revenue goal. This is the only way to figure out what actions will get you to the raw dollar number that is your Revenue North Star.

Working backward allows you to identify the lagging indicators that are directly (or indirectly) tied to getting closed/won deals.

Step 3: Calculate Your Conversion Rates Between Stages

From there, continue to break down each opportunity stage to define the activities that drive conversion between the stages (hint: these are your Moneyball metrics).

Using historical numbers, figure out the average conversion rate between stages in the pipeline and see where you’re doing well or could improve. The biggest thing to remember? Don’t let historical conversion rates or achievement limit your ambition.

Step 4: Define the Activities That Drive Conversion

What gives someone the right nudge to move forward in the sales process? Your next step is to learn which activities help deals progress through each stage of your sales funnel. These are the activities you should measure and reinforce for reps.

Understanding how each activity converts is critical. Many sales leaders track dials because they’re supposed to — but in some markets, that may not be the most effective activity.

So do some light math:

  • What percentage of calls lead to the next step in the process?
  • How does that compare to the percentage of emails that lead to the next step?

Getting scientific makes it easy to focus on the right behaviors — no guesswork required! — and keeps you from spending time on the ones that actually aren’t doing a whole lot for your team.

A key facet of sales to remember: You can only manage what you can control. And activity and effort are two things that are fully under your control. Which brings us to…

3. Set the Right Goals

Set goals — based on the relevant activities you determined in Step 2 — to achieve the sales metrics and KPIs you’ve set for yourself. This will create a system of consistency and accountability that will make your reps successful.

Of course, meeting a goal is always easier said than done. But a good goal should require a little bit of hustle — no one ever said that sales was easy.

Sales goals should always be S.M.A.R.T. By that, I mean:

  • Specific
  • Measurable
  • Achievable
  • Relevant
  • Time-Bound

The S.M.A.R.T. framework helps you convert your key activity and conversion sales metrics (from step two above) into sales KPIs.

Here’s how to set your S.M.A.R.T goals:

First, work backward from “the Number” for the quarter or year. If you’re looking at $5 million in new sales, break that into more digestible chunks with shorter timelines. If your average sale is $100,000, then you need to close 50 sales in a year to reach $5 million. And if you win 25% of the time, then that means you need 200 opportunities in your pipeline.

From there, determine which activities you need to do to move your pipeline forward. How many positive conversations does it take to create an opportunity?

Once you look at the whole process from the ultimate end result and you know how to get there…

Set a specific, distinct number as the S.M.A.R.T goal for each rep and for each team. For example, a S.M.A.R.T. goal to set for each sales rep might be 50 outbound dials per day. That particular metric works because it’s:

  • Specific (50 outbound dials)
  • Measurable (easily tracked through CRM)
  • Achievable (about one dial every 10 minutes in an 8-hour workday)
  • Relevant (this is a key activity to start moving prospects through the pipeline)
  • Time-bound (per day)

You’ll know you’ve chosen the right S.M.A.R.T goals if they are challenging but achievable, and most importantly, keep the team accountable and aligned to the greater sales strategy.

Related: The Scientific Approach to Setting Sales Goals for Your SDR Team [Template Included]

4. Build Your Scorecard

Once you know which metrics matter and you’ve chosen the right goals, it’s imperative that you reflect all of this in an individual sales scorecard for every rep on your team. Scorecards should be clear, structured, and easily accessible so that your reps always know where they stand, how they’re performing, and where they need to improve.

A good sales scorecard has two sections:

  • Activities: these are the day-to-day activities that lead to closed deals, like emails or calls.
  • Objectives: these are the results achieved over a certain period of time (month/quarter), such as won opportunities or revenue.

Both sections should include a way to record:

  • Metrics: the individual actions that are being measured
  • Benchmarks: the target or goal for each type of metric
  • Weights: the established value or importance of each benchmark

In the example below, you can see every Activity Metric — appointments set, emails, calls, etc. — has its own benchmark or target, which is weighted according to its importance. In this example, “new opportunities” carry the most value toward revenue and are therefore weighted heaviest, at 15 points per unit.

activity sales metrics image

Similarly, the Objective Metrics are benchmarked and weighted according to their importance. Notice that “new opportunities” is a metric in this section as well, but it’s weighted heavier in the Activity Score section than it is here.

That’s because, while new opportunities are an indicator that a lead is moving down the funnel, it’s not as indicative of long-term success (i.e., over a month or quarter) as are “won opportunities” or “revenue.”

objective sales metrics image

5. Stay Accountable with Visibility and Excitement

For sales reps, reaching (and exceeding) the goals you’ve set starts with understanding how daily behavior and KPI accountability aligns to the organizational goals.

The most important way you can motivate your team is to give them this understanding.

Mentally, your team members want to be part of something bigger, not just some cog in the “sales machine.” Knowing what they’re contributing — and what that means on a daily and weekly basis to succeed — will help your whole team hit the goal together.

The key?

Make sure these goals are visible. The more you talk about your metrics, the more your sales reps can internalize how they are performing and where that fits into the team’s progress as a whole.

It can be as simple as a dashboard that everyone can access. Tracking and publicizing progress creates both positive reinforcement and feedback loops for your team.

Of course, “real time” is key here. No one appreciates finding out they aren’t going to hit their numbers with only a few weeks left in the quarter. If those insights aren’t delivered on a continual basis, they’re far less useful — because there’s no room left to double down on what’s working or course-correct as needed.

You’re all moving together toward the same goal. To really perform, individual reps need to understand how they’re progressing toward their goals, how they compare to their peers, and then how they’re delivering value to the company.

6. Coach Your Team to Success

KPIs and coaching go hand-in-hand. The most important thing as a manager is to have empathy for each individual member of the team.

It’s not about coaching them up because it’s what you need or what the business needs. They’re working for you because they want to accomplish something. Being a great leader means understanding what that is— whether it’s a monetary goal, eye on a promotion, or something else — and using sales metrics to guide them to that goal.

When you identified the right sales metrics and KPIs, you create consistency and focus for your team, and you level the playing field so you all move together.

If there are gaps in performance, it’s your job as a leader to say, “How do I help?”

You may need to pair a rep with another, more successful rep who can serve as a mentor or work with them 1:1 with role-playing.

Maybe there’s another impediment you don’t know about. You need to search for those things — and ask your team what they need. Whatever the case may be, make sure you’re on the same side of the table, working together.

KPIs help you tell the story of what’s going on and what happened. When it comes to your 1:1s, performance should never come as a surprise. And your KPIs should not just be a random number that has no context.

Every conversation should be grounded in the sales metrics you’ve prioritized, the sales KPIs you’re targeting, and the activities that drive those numbers. Then, you can focus on what needs to be improved or what’s going well.

For example, say you have a sales rep who is doing a great job on number of calls and their target connect rate, but they’re setting up fewer meetings after those conversations than you would expect based on their peers.

That’s when it’s up to you to understand how those conversations are going, as we discussed in step one.

You can start to test and experiment, changing the pitch or the slides, for the next week or next ten conversations, and see if that moves the needle in a positive way. If it doesn’t, you can try something else.

The point is you can easily figure out where you need to optimize your performance and tweak from there so the goal stays achievable and within reach.

Bottom Line

Ultimately, a well-articulated and fully transparent sales metrics strategy can help your whole team work better together.

And by following the 6-step process outlined above, you can find the right metrics and KPIs — and start moving the needle for your team today.

This is a sponsored guest post from a Sales Hacker partner.

Brian Trautschold

Brian Trautschold is the co-founder and COO at Ambition, the acclaimed sales performance management platform built for data-driven and millennial-fueled sales organizations. Connect with Brian on Twitter and LinkedIn and start a conversation about some of his favorite topics: sales, startups, marketing, and NBA trade rumors.