Top 3 Sales Metrics Every Business Should Measure

Sales Metrics: What are your strategic metrics for sales?

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It’s very easy for business managers and sales managers to get overloaded with technology, tools and applications available today. It happens to everyone. Today, managers can measure many different metrics and KPIs and that is great. However, without planning what to measure managers can lose track of what is really critical for their success.

There are two types of metrics in sales:

  1. Sales metrics that are strategic and immediately reveal how successful the organization is when it comes to sales
  2. Various sales metrics which are operational and specific and are used for analysis and understanding why the strategic sales metrics are at a certain level

Think about how and why. The strategic sales metrics will tell you how your company is performing while the tactical or operational sales metrics will help you understand why is that.

When it comes to strategic sales metrics they will certainly vary from one industry to another and even from one organization to another because different companies have different goals and targets. However there are certain sales metrics that should be used by any organization regardless of industry, size, location, strategy, etc.

Here are the top 3 sales metrics you should use to effectively manage your sales and always stay on top of your sales performances:

1. Sales by product

This metric measures how each of your products or services performs in the marketplace. There are always going to be top and bottom products but this metrics will help you develop your sales strategies for example, what are the products you want to grow in the future, why some products are not performing well, plan development of new products or improve existing products, understand margins for each product, etc.

2. Sales by market

Every organization targets different market segments based on customer profile and products offers to the market.

There are some segments that are more profitable and there are market segments that need additional resources because there is an opportunity there for sales growth. Sales by market is a critical and strategic sales metric and you should definitely use it.

3. Sales by location

Unless you manage a small local business chances are that your organization sells in different locations, regions and geographies. Many organizations grow by simply entering new regions and selling its existing products and services to the same target market.

This is very effective because your company already has the sales and product knowledge and has a profitable business model in place. When you look at the sales by location metric you can easily compare sales in different regions and develop future sales strategies how to grow your sales depending on how attractive and easy to enter certain locations are.

In addition, you can use these same three sales metrics to focus on evaluating new business development. How do you measure the success of growing a business? New business can come in different forms and different ways however by using these same three metrics you can evaluate the new business growth effectively.

First, the sales by product can be used here as a sales by new product metric. Sales by new product will measure the sales of each new product as well as the total sales generated by all of your new products and services. How do you define a new product?

For some company new products are products developed in the last 12 months while for others this time can vary depending on the business. You need to define your timeline based on what makes sense for you.

Second, the sales by market metric can be used for evaluating new business growth by measuring sales growth in new market segments. Again how do you define new market segment depends on your business.

Finally, the third sales metric, sales by location can be used as measuring sales by new location, region, country, geography…

As a conclusion, these top 3 sales metrics are strategic and critical for every successful organization and every business or sales manager should include these 3 metrics in his or her reporting. Specific, tactical or operational sales metrics that are mostly driven by everyday operational activities can be used further to understand the performance of your top sales metrics.


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