What are the sales metrics that matter? Don’t get caught up on sales vanity metrics. Instead, focus on the number of contact attempts per lead, call duration, cost to acquire a new customer, customer lifetime value, win/loss ratio on booked appointments, and monitor your pipeline flow.
You’re so vain. You probably think this post is about you. Don’t you? Don’t you? (If you don’t have an appreciation for classic hits of the 70s, head on over to Spotify to get hip to this musical allusion.)
Today we’re talking about vanity metrics and how they keep you off your A game. Sure, there is a time and a place for these measures, but we mess up when we become entranced by them. We forget they are merely clues about the underlying success or failure going of our sales and marketing efforts.
Before we go on, let’s define the term “vanity metrics.” Tableau defines it as follows:
“Vanity metrics are metrics that make you look good to others but do not help you understand your own performance in a way that informs future strategies. These metrics are exciting to point to if you want to appear to be improving, but they often aren’t actionable and aren’t related to anything you can control or repeat in a meaningful way.“
It’s tempting for those of us in sales to say, “oh yeah, those jokers in marketing LOVE to parade the vanity metrics around the office.” Not so fast. Salespeople have their own vanity metrics to confront, too. Today we’re digging into those pesky measures and identifying what you should be tracking instead.
5 Sales Vanity Metrics and What to Track Instead
Sales Call Activity Levels
Your sales development reps (SDRs) are tearing it up when it comes to making calls and sending emails. So many dials, so many smiles.
According to the Sales Engagement Study from the Telfer School of Management, “we found no direct statistical relationship between the number of calls and a salesperson`s performance. Interestingly, our current regression model reveals that an increase in the number of calls is associated with a decrease in the likelihood of success.”We found no direct statistical relationship between the number of calls and a salesperson`s performance. #Sales #SalesEngagement Click To Tweet
Instead of measuring the number of sales calls your team makes per day, you should focus on metrics that reveal your team’s effectiveness. The Telfer researchers recommend monitoring the following metrics that have a more direct impact on call success:
- Contact attempts per lead (more attempts per lead instead of multiple single attempts to numerous leads). More contact attempts per lead, via a well-defined sales cadence leads to higher likelihood of sales success. After all, ten percent of sales close after four follow-up contacts, while 80 percent complete after 5-12 touches. Data from the Telfer Study reveals that “the average number of contact attempts needed for a positive outcome with a lead is 5.7 for B2B companies and 5.9 for B2C companies.”
- Call duration. The Telfer researchers found that for every increase in minutes of a call’s duration, SDRs have six-times better odds of success with the lead. This finding makes sense because a higher call duration signifies a quality conversation, and a quality conversation is a key indicator for better engagement and ultimately success.
Total Customers Acquired
Doesn’t looking at this metric make you feel all warm and fuzzy? You feel secure because this number will never go down – it’s a running total of customers acquired. Again, I say, “big deal.”
You may have acquired a million customers, but that doesn’t matter. What matters are metrics that can help you improve your acquisition efforts. A better metric to keep tabs on is your cost to acquire a new customer. This measurement is something you can work with — it can alert you that your cost to acquire needs to improve. Do you see a return on your acquisition investment? What can you do to make your acquisition spend more effective and efficient?
Monthly Revenue Per Customer
Assuming your sales and customer retention is solid, these numbers are nice to look at each month. They are important, too — maybe not an outright vanity metric. However, monthly revenue per customer isn’t the most important metric when it comes to revenue.
Instead, focus on customer lifetime value (CLV). CLV is a projection of the total value of a customer to your business by factoring in the value of the relationship with a customer over time. CLV can help sales and marketing leaders make better decisions to optimize customer acquisition and retention spend and effort.
Total Appointments Booked
If appointment setting is a big part of your team’s day-to-day tasks, you may be tracking total appointments booked. I bet you know what I want to say. Let’s mix it up just a little and go with “big whoop” this time.
The better metric to emphasize is your win/loss ratio for those appointments. If your team is booking an outrageous number of appointments but the close rate is dismal, you need to tweak your sales process. This metric can prompt you to look for problems in the demo/appointment aspect, a disconnect in the appointment setting phase messaging, and other factors that keep your brand from winning more deals.If your #SalesTeam is booking an outrageous number of appointments 📆 but the close rate is dismal, you need to tweak your #SalesProcess. #AppointmentSetting Click To Tweet
Total Pipeline Value
Woo! Check out the potential revenue piling up in that sales pipeline. If you close all that business, you will meet next quarter’s sales goals.
IF you close all those leads, you’ll be in good shape. IF.
Unless you have the sales dream team of all dream teams, you will not close all that business. To revel in your total pipeline value is pointless.
Instead, you need to monitor your pipeline flow. How much of those potential sales dollars are in the final stages of the sales process? Track your leads by sales stage and measure the value of latter stages for a better idea of potential sales revenue closing soon.
So, did you discover just how vain you are when it comes to your sales metrics? It’s easy to get caught up in the numbers that sound good, but you can deceive yourself into thinking your overall sales process is better than it is. By focusing on the right data, you’ll see what activities are having a positive impact on your bottom line.