As a sales team leader, one of your main goals is to streamline processes for your team to obtain high productivity outcomes. Once you achieve this task, you will have to measure the productivity level by using some metrics. This will help you improve sales cycle efficiency, scale your growth, and improve team productivity, ultimately generating more revenue.

Unfortunately, the majority of sales teams rely on generic performance-measuring metrics. As a result, they lose the opportunity to identify certain aspects that can affect their efficiency and productivity. In this blog, the key topics discussed include the unique metrics you can use to estimate the productivity levels of your B2B sales team.

The Importance of Measuring KPIs/Sales Metrics

Key performance indicators (KPIs) are performance-measuring metrics that help leaders and managers evaluate the sales team’s performance based on sales and organizational goals. When you check the KPIs, it will inform you whether or not your sales process is effective. You will also learn if your team is prioritizing the correct activities.

Another role of KPIs is to inform you about the efficacy of the sales funnel (the customer’s journey of completing a purchase) and sales cycle length (the time it takes to finalize a deal). With this information, you can make better decisions about short-term and long-term business objectives that are streamlined with your team’s goals.

Why You Should Be Measuring KPIs/Sales Metrics

You will be unable to learn your sales team’s performance productivity if you are not measuring or inaccurately measuring KPIs. As a result, you will not know what is negatively affecting your team’s low productivity and how to help them move past it.

In this situation, the work on your potential and current leads can be delayed, thus affecting your pipeline velocity. The more time a lead stays in this position, the longer it will take for you to close it. So, you need to keep a close eye on KPIs to ensure the pipeline remains healthy.

The Most Common KPIs Used by Sales Leaders

As mentioned earlier, most sales leaders solely focus on common KPIs to measure the effectiveness of their sales team. This approach fails to cover the unique components of the job, preventing businesses from reaching business goals. In this section, you can learn what such KPIs are and why they are not an effective measure of your team’s performance.

Quota Attainment Rate 

The quota attainment rate measures a sales rep's performance based on their total sales. It also calculates the time taken by the individual to achieve their sales quota. Sales leaders use this KPI to learn how close a particular team member was to achieving their goals in a specific timeframe. As a result, you can predict how much total revenue your entire team will generate in the future.

On average, only 24.3% of sales reps overachieve from their yearly quota. You can calculate and learn how many members of your team are reaching their quota attainment rate by applying this formula: 

QAR = Actual Sales/Target Sales x 100

Despite its effectiveness, this metric has its drawbacks, especially when it is applied without due diligence. Moreover, it is not a metric that should be used by the frontline sales manager to calculate a salesperson's performance. This is because the quota attainment rate does not measure productivity based on a specific field, customer potential, and the receptiveness of the market. 

To correctly apply this metric, you have to analyze the potential of the current customer by reviewing historical trends, recent purchases, and economic factors. These same criteria should also be practiced with new customers and new products launched in the market. Otherwise, you will be poorly judging the performance of your sales team.

Customer Lifetime Value

Customer lifetime value is a KPI measurement metric that evaluates the final income amount a business can expect to profit from one customer throughout their relationship. 76% of companies consider this metric an important performance measure. The main benefit of this metric is that it can help you pinpoint the exact factors or buyer personas that can drive more revenue for the company. To calculate customer lifetime value, use this formula:

CLV = Customer Value X Average Customer Lifespan 

However, experiencing a difference in products, costs, and purchase frequencies can complicate the calculation of customer lifetime value. For example, a price increase can decrease buying behavior, voiding the estimated value of a customer. Meanwhile, customer behavior is also influenced by external factors that are out of your control. Therefore, you cannot use this metric to make long-term predictions.

Average Revenue per User

The average revenue per user measures the total amount of revenue an active customer is generating in a particular period. A high average revenue per user means that you are making profits without offering deals and discounts. The calculation formula of this metric is:

ARPU = Total Revenue of a Specific Period/Average Number of Customers in A Selected Period 

You have to combine this performance measuring metric with other ones, such as lifetime value (LTV) and customer acquisition cost (CAC), to obtain reliable results. This can be automatically achieved by having a subscription app that calculates all elements based on your subscription rates.

Sales Pipeline Velocity

Sales pipeline velocity predicts how quickly buyers move through the sales funnel and generate revenue for the company. This way, you can access how much money the company is making in a certain timeframe. Unfortunately, you cannot accurately calculate this metric if your pipeline is full of undesirable leads. 

The calculation formula of sales pipeline velocity is:

SPV = Number of Opportunities in Pipeline X Monetary Value of an Average Deal Size X Win Rate / Average Sales Cycle

Drawback of These KPIs

The reason the above-mentioned KPIs (productivity measure metrics) are not reliable is that they only focus on task completion rates based on planned activities. In comparison, the quality metrics provide you with performance data based on numbers and percentages.

Unique Metrics to Measure KPIs

In addition to productivity measures, use these unique metrics to evaluate your sales team’s performance.

Meeting Acceptance Rate

The meeting acceptance rate is the percentage of meeting requests that are accepted by a person at a given conference. The high appointment acceptance rate signifies exceptional sales reps, as they can create a great sense of urgency with prospects

As most prospects stop responding to meeting requests after a while, this metric will show that your team members are effectively making the prospects prioritize the company’s product. 

This metric can also help you measure the effectiveness of sales training, especially for handling objections, and reps' sales acumen (the knowledge of how to approach a prospect). You can also calculate the number of emails sent and emails received, as well as the effectiveness of your social media outreach. It is essential to focus on your social media image, as 78% of businesses with social media selling platforms earn more than those without.

In addition, the meeting acceptance rate is responsible for informing the meeting and live demos delivered every quarter. As 50% of sales leaders believe that presentations and demos are an excellent measure to track productivity, you need to use them in your performance evaluation report. It will also help you forecast the pipeline by checking how many demos one rep is scheduling on average.

Positive Vs. Negative Reply Rates

Positive vs negative reply rate shows the frequency of negative and positive responses a sales rep receives from prospects. When working on this metric, make sure to consider replies from all the channels used for contacting prospects. It will help you identify flaws and strong points in your sales process.

Average Lead Response Time

Average lead response time is the amount of time it takes for a sales rep to follow up with a potential client after first contact. A good number is almost 47 hours. If it increases, your chances of securing a client and boosting your conversion rates drop automatically. So, you can use this metric to learn the benchmark response time of each team member and encourage them to improve their performance.

Average Follow-Up Attempts

Average follow-up attempts refer to the attempts your sales rep makes to successfully close a lead, regardless of whether or not the lead converts into a customer. You can use this KPI measuring metric to get insights into your team’s productivity and bandwidth.

System Touches

System touches help you analyze the average amount of touchpoints your sales reps make to efficiently close a new deal. You can consult with your top-performing sales rep, and encourage them to share their strategies and techniques with other members of the team. Then streamline your team’s sales cycle accordingly.

Monthly Calls (Or Emails) Per Sales Rep

41% of sales leaders use call tracking and 37% of them keep an eye on email activity to figure out their team productivity levels. This is because you can see how many sales reps are focusing on their task and meeting their monthly quota by staying in touch with leads and prospects.

Pipeline Generation

Pipeline-generated leads refer to the number of potential buyers interested in buying your products or services. Knowing this will help you maintain good health of your sales pipeline, as you learn if there are sufficient leads available for sales reps to meet their quota. So, you can also use this metric to nurture and upgrade current leads, which converts more leads into profitable customers.

Average Age of Leads in Pipeline

The average age of leads in the pipeline shows how long a lead stays in the pipeline before turning into a customer. Therefore, you can eliminate the leads that are taking too long or seems impossible to close. You can calculate this metric with the formula mentioned below: 

Average Age of Leads in Pipeline = Total Age of All Active Leads per Rep/ Number of Active Leads

Average Rep Ramp Time

The average rep ramp time is the total time a salesperson takes in training and reaching their full productivity. A good ramp time for a sales rep is around 3.2 months. By measuring this metric, you can learn how effective your training is and which tools and initiatives can be taken to improve your training program. This will also help you find out whether or not you have hired a qualified and productive team for the sales rep job. You can calculate this metric by using this formula:

Average Rep Ramp Time = Total Days for Reps to Outreach First Prospect/Total Number of New Reps

How Do These Metrics Work?

By analyzing the metrics mentioned above, you can identify the weak points of your team. Then, create an action plan to help your team members overcome them. Moreover, you can combine the basic metrics with unique ones to further maximize the ROI and boost long-term revenue generation.

Wrapping Up

Sales team leaders need to track their team’s performance to ensure they are meeting their goals and the company’s objectives. However, most basic metrics are unable to provide the information that can help you evaluate your sales team’s productivity and identify their weak points to coach them accordingly. As a result, you cannot create measures to eliminate the issues, which will damage your entire team’s efficiency. So, make sure to use the performance measuring metrics to learn about your team and meet your objectives.