The Three Most Important Metrics to Measure

Copyright (c) 2014 Mr. Inside Sales

What are your three most important metrics you measure to track and predict revenue?

That was the question I asked my LinkedIn "Inside Sales Management Group," and the answers I received were quite interesting. Whether you're a business owner, sales manager or even a sales rep, you know that metrics are a crucial way to measure your performance, predict revenue, and evaluate progress made. But which metrics are the most important? Before I give you my answer, let me share some of the answers I received:

One answer was:
1) Opportunities created,
2) # of times contacted, and
3) conversions, deals closed.

I thought that was an interesting answer, especially the "# of times contacted." While I understand the opportunities created and conversion or deals closed, I don't know that I'd include # of times contacted as one of the three most important metrics to measure. Obviously it's important to know how much time a sales rep is spending chasing a sale, and also how effectively they are closing on each call, but I think there is a more important metric that I'll share later on.

Another answer was:
1) Opportunities created,
2) Calls made on the accounts, and
3) Quality of the call.

This was obviously in relation to account management calls, and once again opportunities created was listed number one. The thing that I found interesting with this answer was quality of the call. As you'll see later in the article, quality of the call, and, more specifically, how that quality is measured, is one of my top three metrics.

The most interesting answer came from VP of Sales, DJ Farnworth. Here was his answer:

1) # of open deals (times)
2) Historical win rate (times)
3) Historical ave. deal size = Pipeline. DJ said:

"One metric I've found very effective is: (# open deals) X (historical win rate) X (historical avg. deal size) = Pipeline. This takes some of the moving variables out of measuring just the numbers that are in the existing open deals and is based on past performance which should better indicate likelihood than a probability entered by the sales person."

What I liked about this answer is that it seemed to most accurately predict the upcoming pipeline. I've sat in a lot of pipeline meetings, some worldwide even, and almost everyone in the room knows there is a lot of 'wood' that isn't going to close. Getting an accurate account of what is truly likely to come in seems hard. This formula seems easy. You should try it.

O.K., now for my answer:

1) # of opportunities,
2) Close percentage
3) Script grading adherence evaluation per closing call.

#3 (Script grading adherence) is based on recording each call and grading adherence to your best practice script and scripted rebuttals. The reason is if a rep is winging it, they won't get better and you can't coach them. The manager's job is to teach the best practice approach and then coach to it. Then you measure who is adhering to it and who isn't. Every other metric (number of calls, number of contacts, trending to revenue for the month), etc., flows from that direct metric.

I always like to talk metrics with managers to see if they are measuring this very important component. Bottom line is if your reps aren't using the best approach and handling objections and sales situations effectively, then the other metrics won't improve much. If you ask them to make more calls, all you will get is more bad calls.

I'd love to hear about some of your favorite metrics, so visit our site and submit some. In the meantime, begin listening to how your reps are performing during their call, and begin improving their delivery and technique. That's how you automatically improve all the other metrics.


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Mike Brooks is founder and principle of Mr. Inside Sales, a North Caroliina based inside sales consulting and training firm, and author of the award winning books on inside sales: "The Real Secrets of the Top 20%," and his new book, "The Ultimate Book of Phone Scripts." http://www.mrinsidesales.com