22 Must-Have Sales Operations Metrics

22 Must-Have Sales Operations Metrics

Role of Sales Operations

Every sales operations professional knows that data matters. The problem is, you’re not sure which data matter or who they matter to. We share 22 sales operations metrics for your to track. You will find them broken out into 4 easy categories: Sales Pipeline, Sales Process, Sales Resource, and Finacial.

Most of the time, your sales ops team is running around with their hair on fire. It is one ad-hoc report after another. Some are for sales leadership, some are for finance, but few are directly supporting your sales reps. The fundamental role of sales operations, however, is to improve the sales process, which is in direct support of your sales reps.

Kramer's Hair on Fire
Kramer’s Hair on Fire

To improve the sales process you need to:

  1. Measure existing sales process
  2. Identify inefficiencies
  3. Eliminate friction
  4. Measure the result
  5. Repeat

It is time for sales ops professionals to take ownership of the sales process. Your job is to improve sales efficiency and effectiveness. Let the fires burn and shift your focus instead to preventing future fires.

Measure Metrics Through Time

Once you determine which metrics are most important to your organization (suggestions below), you need to start measuring. More importantly, you have to start record these metrics through time. By comparing through time, you can measure improvement and identify areas that need more attention. You will have a performance benchmark and will quickly pick up business changes through trend analysis.

To measure through time requires you to create a repeatable measurement process. If your metrics take a week (or a day) to pull together you’ll have to get the hose back out and start putting out fires again. You need to automate the measurement process. It should take minutes, not days, to update and record your sales metrics. By automating these measurements, you can spend your time identifying inefficiencies and eliminating the frictions in your sales process.

Be Able to Filter Metrics

All the metrics you track should be filterable. This means you should be able to look at these metrics for any subset of the data. If win rate is one of the metrics you track, you should be able to look at win rate by region, sales position, product, month, or down to the individual sales rep. Do you currently have a way to look at data this way?

While many of us use Excel spreadsheets, they are not easily repeatable and are prone to error. To do this right you need to use a database or a third-party analytics platform. This creates an easy and repeatable process to answer ad-hoc requests. Which, again, frees up your time to improve sales efficiency and effectiveness.

Sales Operations Metrics

metrics_for_sales_ops

Sales Pipeline Metrics

  1. Pipeline Forecast – Do you know the expected value of your sales pipeline this quarter? This forecast should be made each quarter and updated at least once per week.
  2. Open Opportunities – Your open opportunities represent all of your sales team’s swings.
  3. Win Rate – While we hope all swings are hits, your win rate is like your batting average. You need to track it by both count and dollar value.
  4. Average Won Amount – This is the average dollar value of all won opportunities. When combined with the open opportunities and win rate you can do some back of the envelope math to determine gross pipeline value.

Sales Process Metrics

  1. Days to Won vs Days to Lost – It seems to me that Days to Won should be more than Days to Lost, but that is rarely the case. There is little incentive for a sales rep to update an opportunity as Closed Lost. Days to won are usually defined as Closed Won Date minus Qualified Date.
  2. Sales Stages Used – How complex is your sales process? If you have 10 stages, that might be too many. This metric is used to understand which stages are being used, and which are not. Reducing your stages is a great way to reduce friction in your sales process.
  3. Sales Time vs Overhead Time – Do you know what proportion of your sales rep’s time is actually selling? You should compare that amount of time to the time they spend on admin tasks and in internal meetings.
  4. Marketing Leads vs Sales Originated Leads – What proportion of all leads come from marketing and what portion are sales originated? Sales ops can play a critical role here by ensuring a good handoff from marketing to sales.
  5. Lead Response Time – How long does it take your sales team to respond to leads that marketing passes to them? The shorter the better. Make sure you have the process and technology in place to support a fast handoff, especially if there is an inbound SDR team.
  6. Close Date Accuracy – You should measure how good your sales reps are at predicting an accurate close date. Usually, reps put the last day of the quarter as the expected close date. Is this true in your organization?
  7. Amount Accuracy – Similar to Close Date Accuracy, do your sales reps do a good job estimating an opportunity’s amount? Typically, this value is overestimated, or it is $0.

Sales Resource Metrics

  1. Resource Forecast – This forecast is based on your assigned quotas, the tenure of your sales team, and their sales efficiencies. It represents how much value you expect to be delivered from your sales team independent from the pipeline forecast. While this is independent, it should be always be compared to the pipeline forecast.
  2. Sales Efficiency – What proportion of quota do you expect your sales team to attain? You should know this by sales position and territory.
  3. New Hire Ramp Rate – When you hire a new sales rep they will take a little while to get up to speed. In technology companies, this could be as long as 18 months. The tenure of your sales reps plays a critical role in understanding their Sales Efficiency.
  4. Quota Assigned – The amount of assigned quota can be used in conjunction with Sales Efficiency to determine your resource forecast.
  5. Sales Rep Turnover – Sales rep turnover is one of the most costly impacts to your business. Typically, turnover is 10% – 20%. You should plan for this and have a strategy in place to hire for these positions before they become vacant.
  6. Addressable Market – You should know how much addressable market exists for your sales team. Is it a nascent market, or are you trying to displace competitors? You should know whether to be up-selling your customer base or hunting more net-new opportunities.
  7. Territory Assignments – For a sales guy there is nothing better than having a sweet patch. As the sales ops leader, you should weary of this. As you go through territory planning you should you understand the addressable marketing in each territory and make sure there are equitable territory assignments.

Financial Metrics

  1. Customer Acquisition Cost (CAC) – Do you know the all-in cost of acquiring a new customer? This includes all sales and marketing cost plus any additional overhead.
  2. Lifetime Value (LTV) – As its name implies, this metric is the total value of a customer over all time. This should be compared to CAC.
  3. Customer Churn Rate – This will tell you the proportion of customers who renew with you. Another way to look at it is by value. You will lose some customers, but upsell others. If you consider churn rate by value, you might find you have positive churn.
  4. Average Term Length – When you sell things “as-a-service” it is important to know how long they initially agree to that service. There is no right answer for ideal Term Length, it is highly dependent on your business. For all businesses, however, it is important to understand how this metric changes through time.

Conclusion

It is time to get your sales metrics in check. Automate the calculation and track them through time. You will not have to do as many ad-hoc reports because the data will already be ready for consumption. This will free up your teams time to focus on improving the sales process. At ORM Technologies we are experts in sales and marketing analytics. Let us know how we can help you – info@orm-tech.com.