Top 10 must have Metrics to conduct a Sales Review

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What is a Sales Review?

The sales review compares the results of initiatives with objectives to determine how well your company achieved its sales goals.

It combines analytics and performance management processes that improve business performance and help achieve targets. The review can be done at any level, including project, business unit, or whole enterprise. Successful organizations have a tradition of regularly reviewing their business to ensure good leadership oversight and expectations at all levels.

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What’s the Purpose of Sales Review?

A sales review provides management with an accurate and clear picture of company sales performance. This includes analyzing current performance, setting realistic goals, and assessing areas for improvement.

Each business has its metrics that must be tracked to improve sales performance. This depends on its current growth cycle. For example, growing companies might want to focus on customer acquisition, whereas mature companies may emphasize profitability/margins on deals.

 

How do you track sales metrics?

A variety of sales tracking tools can help you track your sales metrics. A customer relationship management (or CRM) tool is one of the essential tools you should have. It allows you to consolidate all relevant data and insights about all your prospects and customers.

 

What metrics do you need to consider for a sales review?

When evaluating companies based on business aspects, sales metrics are crucial. Critical decisions need to be made regarding direct sales, telesales, digital/social media selling, and so on to grow a company. Key Performance Indicators (KPIs) are business metrics that aid in completing a successful business review.

There are many business metrics that can be tracked. However, your chosen metrics will depend on your industry and business goals. Business metrics are quantifiable indicators that can be used to monitor, analyze, and track the success or failures of business processes. These metrics give context to the business before we dive into the core business data.

These are the most critical business metrics to help you speed up your sales review process.

 

1- Win Rate of sale

The percentage of sales opportunities the company has won is called the sales win rate. This can be calculated for each sales rep or the entire sales team. A win rate of 25% is achieved when you have 200 sales opportunities and your sales team wins 50.

It is important to only list sales opportunities that you and not others have submitted.

 

2- Customer Retention rate

Building brand loyalty is essential in any industry. Apart from repeat sales, customer loyalty is essential. Customers will often tell others about your company’s products and services, which can lead to more sales.

You must provide high-quality services and products to increase brand loyalty. However, providing excellent customer service is essential if you wish to improve your brand’s reputation. To calculate your company’s customer retention rate, you can use the following formula:

Customer retention rate = (total number of customers at the end of a specified time frame – number of new customers acquired by the company during that period / total customers at the start of the established timeframe) * 100

 

 

3- Net Promoter Score

This is the most important business metric for your sales team. This is how likely your customers are for others to recommend your product/service (friends or family).

This metric typically shows your customers’ perceptions of your brand. This metric is also used by marketing and branding departments to improve their campaigns.

NPS can be calculated in many ways. The most popular is via a customer survey. Customer surveys ask customers how likely they will recommend your brand, product, or company to others.

 

4- Pipeline Coverage

All salespeople must know the state of their pipeline concerning their quota. This sales metric is a key indicator of quota achievement – if your pipeline doesn’t meet your quota, it won’t be easy to reach your goal.

 

5- Average customer lifetime value (LTV)

Although it’s helpful to determine a company’s customer acquisition cost, it is even more critical when compared with the customer lifetime value (CLV, customer life revenue, or CLR). This measure shows how much sales you can generate from a typical customer. Calculating the customer lifetime value of a company requires a lot of data.

There are many ways to calculate a company’s CLV. It all depends on what sales model you use. It is generally calculated by multiplying the average sale value by the retention period of a customer (in months) and the number of transactions they usually make within that timeframe.

CLV = Average Sale * Retention Time per Average Customer * Average Number of Transactions per Customer Each Month

It is important to calculate the average customer lifetime value to decide how much your company can spend on customer acquisition. Analyze customer retention issues. Find out which segments of customers are most profitable or the most difficult to convert.

 

6- Customer Acquisition Price

Many companies acquire new customers by spending a lot of money on marketing. This is also known as the cost to customer acquisition (CAC) or customer acquisition costs. The company’s customer acquisition cost can be calculated by subtracting its marketing expenses from a period and adding the number of clients it has acquired in that period.

Customer Acquisition cost = Marketing costs/Customer acquired.

 

7- Sales Revenue

One of the most important sales metrics is revenue. You can assess your company’s sales to determine how your products and services are selling in the market. It also helps you decide if your marketing efforts have been effective.

You can calculate a company’s sales revenue by adding sales income to sales and subtracting costs associated with returned or undeliverable products.

Sales revenue = Revenue from sales – Return products cost

Revenue Achievement against Targets is a related metric that contextualizes sales results. It can be calculated in the following way:

Revenue Achievement = Sales Revenue/Sales Quota during the period

 

8- Net Profit Margin

The net profit margin measures a company’s ability to make a profit relative to its total revenues. To calculate the profit, subtract all sales expenses from your monthly revenue.

Monthly revenue = sales expenses

The net profit margin is the ratio of the company’s income and the business’s cost. Also, this allows you to predict long-term growth accurately. An organization can increase its net profit margin by increasing sales or production costs.

 

9- Average Deal Size

The average time it takes for a sale to close is called a sales cycle. It can be expressed in days, weeks, or months. This will help you identify bottlenecks in your sales funnel and show you which sections need the most attention. The sales cycle can also help you identify the most important sections of your sales funnel.

Average Deal size = (Summation of all closed deals / Number deals).

These are the top business and sales metrics you need to conduct a successful business review.

 

10- Quota Attainment

Quota attainment measures whether a sales rep reached their sales goals within a specified time frame and how much they exceeded their quota. Low quota attainment rates are an essential indicator of a sales team’s capacity and coaching.

We believe that progress towards quota attainment should always be tracked in your BI dashboard so you can easily understand how sales activity metrics directly contribute to and correlate with quota attainment.

 

Conclusion

An annual sales review can help your company grow by analyzing current performance and trends in the market. Planning all future actions according to the evaluations and metrics can help you establish a strong presence in your market.

 

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