Measuring sales performance: The 16 key metrics that highly productive teams monitor

“You can’t manage what you don’t measure” may be an old cliche, but that doesn’t make it any less valid. 

Of course, you probably already know that it’s critically important to measure the right metrics, especially where sales performance is concerned. But, how do you decide which specific metrics to measure? It’s a surprisingly difficult question to answer – as we’ve talked about before, building the right metrics framework isn’t easy. And with sales, there’s more to the story than high revenue numbers.

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Needless to say, if you’re looking to measure the performance of your sales function, there are a ton of possible metrics to consider. We’re going to introduce 16 of the most common sales performance metrics that organizations use – as you read about them, think about how measuring them might impact your company. You can also frame your brainstorming around the following questions:

• What does our performance look like?
• What are our biggest challenges?
• What’s the negative impact of those challenges?
• What are our department goals?
• What are the goals and objectives for the business as a whole?

Keeping these questions in mind will help you figure out which metrics deserve a place in your framework.

What are sales metrics?

Sales metrics (also known as key performance indicators or KPIs)are data points that measure the performance of both your sales team and your individual salespeople. Sales metrics are used to set future goals, spot areas of weakness, design incentive plans, calculate commissions, calculate bonuses, and more.

Some sales metrics are lagging indicators and others are leading indicators. Lagging indicators show what your salespeople have already accomplished. Leading indicators show what your salespeople are likely to accomplish in the future based on what they’re doing now.

Lagging indicators include metrics like total revenue or sales by lead source. Leading indicators include metrics like the number of phone calls made or the number of emails sent. Leading indicators are based on what your team is doing in the present. By combining the data from leading and lagging metrics, you’re in a better position to predict the future.

Why is tracking sales metrics important?

Sales metrics help you measure the performance of your organization’s sales efforts. Whether you’re developing a new outreach campaign or trying to prove the ROI of your SDRs (sales development reps), intuition and gut feelings aren’t enough. 

Allow us to quote ourselves:

“Deciding what to measure, and then what to focus on moving, is a life or death decision for your business. Measure the wrong things, you’re toast. Measure the right things, but focus on moving them in the wrong proportion, you’re toast. “ — Matt Hammel, How to Design a Winning Metrics Framework 

What sales performance metrics should my organization track?

The best sales metrics to monitor will vary based on several factors, including your industry, performance goals, your sales team, the company itself, and the metrics framework you’re using to guide data decisions. There’s no one size fits all answer here. For example, a company that has the bulk of its revenue coming from a subscription service will follow different metrics than a company focused on manufacturing. 

Still, most sales teams share some common core goals. With this in mind, here are 16 common sales metrics that will give your team valuable data-driven insights into their sales performance. We’ve broken them up into three categories:

• Company-wide sales performance metrics
• Sales function performance metrics
• Individual and team performance metrics

In the explanations below, you’ll get a brief overview of the metric, a calculation, and a note on its metric type. 

However, keep in mind that this list is an overview of sales performance metrics that exist. They won’t all apply to every business or industry – for example, SaaS, ecommerce, and other industries all have unique performance metrics.

A quick note on metrics types

In How to Design a Winning Metrics Framework, we explained the importance of tracking a few key metric types. In this blog on sales performance metrics, we’ll categorize each metric below based on whether it’s a Growth, Quality, or Efficiency metric. We’ll also share whether each sales metric is an Outcome, Output, or Input metric.

If you aren’t familiar with the different types of metrics you can measure, be sure to take a look at the metrics framework blog linked above – it’ll teach you how to cut through the noise and make an educated decision about which metrics are important to your sales team and/or the overall company.

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💼 Company-wide sales performance metrics

Each of these metrics measures how effective the sales team is at contributing to the organization’s overall growth and profitability.

1. Total Revenue

Metric Type: Growth, Outcome

Total revenue represents the total amount of sales generated across all products and services. Here’s a simple formula used to calculate total revenue:

Total Revenue = Number of Products Sold x Price Per Product

The total revenue is a flexible metric that can be used to observe different categories of performance. You can monitor individual product revenues, revenue generated by a specific location, and revenue generated by individual representatives. Revenue is the most versatile metric.

2. Net Revenue Retention (NRR)

Metric Type: Growth/Quality, Outcome

Increasingly, sales organizations are focusing on usage, retention, and expansion of revenue.

NRR shows that there’s more to revenue than calculating the initial deal and moving on. This metric helps you understand whether your product or service is high-quality and meets customer needs and expectations.

To calculate NRR, you need a few metrics:

• Starting Monthly Recurring Revenue (MMR): Amount of monthly recurring revenue the organization expects to earn.
• Expansion MRR: Additional monthly revenue from upsells, cross-sells, and add-ons from your current customers.
• Contraction MRR: Opposite of Expansion MRR; the monthly decrease in revenue caused by current customers.
• Churn MRR: How much monthly revenue is lost because of customer cancellations.

Once you have those metrics, use this formula to calculate NRR:

Net Revenue Retention = (Starting MRR – Contraction MRR – Churn MRR + Expansion MRR) ÷ (Starting MRR x 100)

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3. Repeat Customer Rate

Metric Type: Quality, Output

Repeat customer rate shows how satisfied customers were with initial contact and consumption of your brand. It’s a more concise metric than customer retention because it shows you how many of the customers you obtained are still bringing in revenue. 

If new customers bring in a higher percentage of revenue than existing customers, it might mean the company is growing at a rapid pace. It could also mean there’s a high customer turnover rate.

Here’s how to calculate your repeat customer rate:

Repeat Customer Rate % = (Number of Customers Who've Purchased Before ÷ Total Number of Customers) × 100

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4. Average Customer Lifetime Value (LTV)

Metric Type: Growth, Outcome

Average customer lifetime value refers to the average revenue generated for your company by a customer throughout the time they are in contact with you and consuming your product or service. This is a useful metric that can help your sales team develop strategies and campaigns to increase LTV – after all, it’s much less expensive to keep an existing customer than to find a new one.

The formula for calculating the average lifetime value is:

Customer Lifetime Value = Average Purchase Value x Average Purchase Frequency x Average Customer Lifespan

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🛍️ Sales function performance metrics

These metrics help measure the performance of your organization’s sales department/function.

5. Conversion Rate

Metric Type: Growth/Efficiency, Output

Conversion rates measure how effective your sales team is at converting new leads into new customers. It’s an important metric that has value to both sales and marketing, and both functions often use it to assess their strategies and the quality of leads coming in.

Here’s a basic formula you can use to calculate conversion rates:

Conversion Rate = (Number of Leads Converted Into Sales ÷ Total Number of Leads) x 100

You can also get more granular with conversion rates via segmentation – segment by campaign type, program, acquisition channel, geography, and other factors to analyze specific conversion rates. 

6. Lead Conversion Rate

Metric Type: Growth/Efficiency, Output

As you work to improve how well your website and other digital marketing campaigns perform, here are some of the questions that may come up:

• Which leads are working for the sales team and which aren’t? 
• Do our best leads come from social media? 
• Are we getting fewer than expected leads from our website? 
• If leads are purchased from lead generation companies, are they meeting our standards?

The formula below will help answer these questions:

This is the percentage of people who visit your website and get captured as leads. It is calculated by:

Lead Conversion Rate = Number of Captured Leads ÷ Total Visitors

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7. Lead to Opportunity Conversion Rate 

Metric Type: Growth/Efficiency, Output

Lead to Opportunity Conversion Rate helps you determine whether leads are being converted into opportunities (and eventually paying customers) in a timely, efficient manner. 

There are two important disclaimers to consider to determine whether this metric deserves a place in your organization’s framework:

• If you have an SDR team, this metric is an important one – it’s usually what their success is measured on.
• In a product-led growth (PLG) company, the product and marketing team would have their lead to opportunity conversion rates measured.

In Salesforce, leads move through five stages: Unqualified → New → Working → Nurturing → Converted. Once a lead is Converted, it becomes an Opportunity that’s officially making its way through your sales funnel. Opportunities can be broken down further based on their stage: Qualification, Need Analysis, Proposal, Negotiation, and Closed.

The calculation is a simple one:

Lead to Opportunity Conversion Rate = Number of Leads Converted to Opportunities ÷ Number of Total Leads

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8. Market Penetration Rate

Metric Type: Growth, Outcome

Market penetration rate measures how effective your sales strategy is in communicating to the relevant audience. 

When you consistently address the right people, you’re able to find customers who are most likely to stick to your brand, consume it regularly, and share it within their circles. Market penetration rates are also useful for territory planning and refreshing. Use it to ensure that  sales rep efforts don’t overlap within specific geographic locations/regions or segments, which could cause internal friction.

Here’s the formula for calculating the market penetration rate: 

Market Penetration Rate = (Existing Customers ÷ All Possible Customers) x 100

However, there’s a big caveat to this metric – market penetration rate is primarily a vanity metric. It’s incredibly difficult to accurately measure your total addressable market. Plus, it’s very subjective: the whole concept “all possible customers” is an opinion. Additionally, this metric isn’t useful or important for all industries. 

Market penetration rate is a great example of the whole “just because you can measure it, that doesn’t mean you should measure it” concept, though. While it’s an interesting data point, that doesn’t mean it deserves a place in your sale’s team’s metrics framework.

9. Sales Cycle Length

Metric Type: Efficiency, Output

How long is it taking your sales team or salespersons to turn leads into customers? In general, the shorter your sales cycle length, the better (however it’s important to remember that sales cycle lengths will vary by product and customer types.)

This is how to determine the time it takes to convert an unqualified lead to a customer:

Sales Cycle Length = Total Number of Days for All Deals ÷ Total Number of Deals

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10. Average Annual Contract Value (ACV)

Metric Type: Growth, Outcome

Average annual contract value, sometimes also called average contract value, measures the average value of customer contracts by averaging them over a one-year period. It’s a metric that’s generally used by subscription-based SaaS companies who sell a product with yearly or multi-year contracts. 

Larger deal sizes help measure the performance of the entire sales function and individual salespeople, but it’s also an indicator of product development positioning. When you have an average ACG that increases over time, it’s a good indicator of up-market product penetration and increasing product maturity.

Average Annual Contract Value = Total Contract Value ÷ Total Years in Contract

Average total contract value (TCV) is a complementary metric that measures revenue across an entire contract. Unlike average ACV, average TCV considers both one-time and recurring charges, including deal length and other related costs.

11. Year-Over-Year (YOY) Growth 

Metric Type: Growth, Outcome

Year-over-year (YOY) growth is a sales metric that compares growth in one period against the comparable period twelve months before the previous year. 

YOY growth helps teams visualize performance without the impact of seasonality, short-term unpredictability, unique monthly events, and other factors. It helps answer the question, “Has the organization been growing at a faster pace than the previous year, or has our growth slowed down?

The formula for YOY growth rate is: 

YOY Growth = [ (Current Period Value ÷ Previous Period Value) - 1] x 100

For example, if a company’s revenue has grown from $12 million to $17 million, then the formula for its YoY growth rate is: YoY Growth = [(17÷ 12) – 1] x 100 = 41.7%.

12. Sales Expense Ratio

Metric Type: Growth/Efficiency, Input

To calculate this ratio, divide the operating expenses of your sales team by net sales, then multiply by 100. This lets you know the cost of making a sale. Costs are important, but you don’t want to cut the costs per sale to an extent that revenues drop more than the cost per sale. This metric helps you see this.

In general, sales expenses shouldn’t exceed net sales unless you are in the initial stages of your business.

To calculate your sales expense ratio, use this formula:

Sales Expense Ratio = (Operating Expenses ÷ Net Sales) x 100

⚡️ Individual and team performance metrics for sales

The following metrics can be used to measure both individual and whole team performance.

13. Pipeline Coverage

Metric Type: Growth, Input

How do total sales opportunities compare to your quotas? Pipeline coverage is the multiple of sales opportunities (the pipeline) to the sales goals set.

Having 3 - 4 times as much in the pipeline as the quotas for a time period is a good practice to get into. This shows how secure your sales pipeline is and whether or not it is healthy enough for you to achieve your sales quotas.

Here’s the formula for calculating pipeline coverage:

Pipeline Coverage = Number of Opportunities in Pipeline in a Period ÷ Quota for That Period

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14. Win Rate

Metric Type: Growth/Efficiency, Output

The win rate is a measure of how well a sales rep can conclude negotiations and make a sale. 

This may sound like the same thing as the conversion rate, but it isn’t. Win rate considers the number of sales opportunities against the number of successful deals closed. It doesn’t consider a time frame like conversion rate does.

The formula for calculating win rate is:

Win Rate = Deals Closed x Total Deals Made

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15. Deal Slip Rate

Metric Type: Growth/Efficiency, Output

This is the percentage of deals that are not closed in a sales cycle. Deal slip rate is the other side of the conversion rate. By looking at this sales performance metric, you’ll know if you need to change your sales pitches, outreach tactics, and other strategies.

If you see the deal slip rate rising while your market penetration is decreasing, you’ll need to look at what your competitors are doing and make adjustments.

To calculate deal slip rate, use this formula:

Deal Slip Rate = Number of Unclosed Deals ÷ Number of Forecasted Sales

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16. Quota Attainment

Metric Type: Growth, Output

Quota attainment refers to how well your sales representatives achieve the goals set for them. It helps sales teams determine if they need to make adjustments to enhance sales performance. It also informs you on what your expectations should be. 

A low score here can lead to many questions: You may have set quotas too high. If so, your sales forecast was off. Why was your sales forecast off? Exploring this question might lead you to look at market penetration and deal slippage rate. Quota attainment can also help managers spot underperforming salespersons who may need additional training or coaching.

Here’s the formula to calculate quota attainment:

Quota Attainment = Total Sales ÷ Sales Quota

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Measure sales performance with a modern data stack

There are a variety of ways to track sales metrics, including simple spreadsheets, SaaS tools, and CRM solutions. 

To get the most out of your sales data, consider implementing a modern data stack in your organization. It’s one of the most powerful and efficient ways to facilitate data analysis. 

With the guidance of an effective metrics framework and the right data infrastructure, your sales team can be agile enough to stay ahead of the game and maximize their sales performance.

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