Sales Growth Metrics
Sales growth metrics: While many businesses don’t pay much attention to their sales metrics, it is important to remember that you can only manage what you can measure. And when it comes to sales growth, it is crucial to keep track of these metrics to ensure the highest return.
Without proper metric-based strategy making, the risks of failed sales attempts are bound to be higher. Hence, these are some of the sales growth metrics that you need to focus on:
Sales Target
Sales Target is an extreme measure of sales growth. Companies need to plan their estimated target of sales revenue and, at the end of each accounting period, compile a sales report to ascertain whether the targets have been met.
By studying the data against the forecasted sales, one can determine trends, outliers or inconsistencies for promoting growth.
Sales Cycle
The sales cycle consists of the different stages involved in completing a sale. Every business has its own pattern of the sales cycle, which acts as a standard.
Any stagnancy or plummet in the sales can be an indicator that any one or more of the stages in the sale cycle have issues to address. In that case, the sales team needs to identify the inconsistencies that may have led to such downfalls.
Customer Acquisition Cost
Customer Acquisition cost calculates the total amount of expenses that go into the acquisition of a new customer.
This can include all kind of marketing expenses that the company has incurred for converting them into a customer. Businesses need to keep this metric as minimum as possible to get the most efficient returns.
Customer Lifetime Value
Customer Lifetimes Value (CLV) basically shows the amount of return you can expect from each customer through repeat purchases. The higher your customer lifetime value is, the better you are at retaining a profitable relationship with your customers.
If you have low CLV, you might need to spend more time and resources in serving your current customers. Businesses need to coordinate their CLV with their cost of customer acquisition to better understand where to invest their resources for extracting returns from customers.
Lead Conversion Rate
This measures the number of leads that are converted into paying clients. It can be an indicator of the performance of your sales team.
Every industry has its own standard conversion rate that every business should pursue. A low conversion rate calls for re-evaluating the areas that can enhance the customer experience.
Sales Pipeline Coverage
Sales Pipeline Coverage (SPC) provides an estimate of the number of opportunities you have to meet your sales target. It plants a value on your sales pipeline to maintain for the best practices. In general, this standard value is 5:1.
Revenue Per Sales Rep
This measures the amount of revenue received by the dint of each sales representative’s efforts. The sales force of a business is vital for accomplishing high conversion rates, high sales revenue as well as for meeting sales targets.
So, revenue per sales rep helps to set goals to meet in terms of sales, which, in turn, helps the company to forecast future sales based on their performance.
Sales growth metrics are incredibly essential for achieving your sales goals.
But not all metrics can practically help you understand what areas to correct or prioritize for higher sales. So, this article should act as guidelines to help you analyze your sales progress and align your activities to reach your targets better.