Sales Intelligence Blog

Sales Measurement Practices: Importance & How to Improve

Different sales metrics provide insights into the performance of different facets of the sales process. To get a holistic overview of how your sales are performing, you must measure, analyze, and cross-reference a number of different metrics.

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If you only consider a few high-level sales metrics, you’ll likely end up with a lop-sided or incomplete view. That will limit the accuracy of your conclusions and prevent you from developing deep insights into improving sales.

In this article, we’ll look at some of the most popular and effective ways teams monitor their sales performance. We’ll also look at how to improve your sales monitoring to enhance your actual sales.

How are Sales Measured?

First of all, there are different ways to monitor sales. Sales teams typically rely on metrics and benchmarks to quickly overview their sales and revenue-generating performance.

The difference between metrics and benchmarks can be nuanced. Metrics are typically based on quantifiable sales data that gives you a quick snapshot of your sales performance. Benchmarks indicate how competitors perform so that you can compare yourself against them. This helps you identify areas where you underperform so you can focus on improving them.

Sales metrics

Here are some of the most commonly used and effective sales metrics:

  1. Monthly recurring revenue (MRR): This measures how much revenue you expect to generate from monthly subscriptions or recurring clients. For example, if you have ten clients on a $100/month plan, you would expect to earn $1,000 the next month. MRR fluctuates as you gain or lose client accounts and can be used to track how your revenue grows.
  2. Annual recurring revenue: This is exactly the same as MRR but calculated over a period of 1 year.
  3. Customer churn rate: Churn measures the percentage of customers that have stopped using your product in a specific period. For example, if you have 100 customers and lose 10 in the last month, you’ve experienced a 10% monthly churn. Churn does not take into account how many customers you gain. So, instead of measuring growth, it measures how many existing customers you lose or retain.
  4. Revenue churn rate: Revenue churn (aka MRR churn) is similar to customer churn, except that you measure the percentage of revenue you’ve lost due to losing customers. You calculate revenue churn by totaling the would-be revenue of all churned customers. Then, you work out what percentage that is of your previous MRR.
  5. Customer acquisition cost (CAC): CAC measures how much it costs to acquire a single customer. In its simplest form, you can calculate CAC by dividing your total marketing cost by the number of customers you’ve received. However, the calculation may be more complex, depending on what methods you use to acquire customers.
  6. Customer lifetime value (CLV): To get your CLV, you multiply the customer value with the average customer lifespan. To get your customer value, you multiply the average number of purchases with the average purchase value.
  7. Months to recover CAC: This metric calculates how long it will take to earn back your CAC. Of course, a business always wants to recover its investment as soon as possible. The sooner you can recover your CAC, the better it is for liquidity and overall financial health.
  8. Lead velocity rate (VLR): VLR measures how fast the number of qualified leads you generate per month grows. VLR is a percentage that shows how much your qualified leads have grown month on month. So, if you obtained 100 qualified leads last month and obtained 115 this month, your VLR would be 15%. This helps to show how effective new marketing or sales tactics are compared with previous ones.

SaaS sales benchmarks

Equally important, here are some of the most commonly used sales benchmarks:

       Cold call to conversion rate: This measures the percentage of cold call outreaches that end in a sale. Depending on the industry, cold call success rates can be as low as 2%.

       Col call to appointment rate: Same as the above, except that you measure what percentage of cold calls lead to actual appointments.

       Appointment to opportunity rate: This is the rate at which your appointments lead further down the sales funnel and to an opportunity to close a deal. The deal doesn’t have to be successful.

       Opportunity to conversion rate: How many bottom-of-funnel sales prospects convert to customers? This benchmark is excellent for honing in on the effectiveness of your closing technique.

       Conversions: The most basic but also the most important benchmark determines how many of your leads or prospects end up as customers.

There are many more metrics and benchmarks, such as lead response times, average deal size, total revenue, market penetration, deals lost to competition, etc. However, these are less universally used and more situation-dependant.

How to Improve Sales Team Performance?

The end goal of tracking sales performance is to improve it in the long run. With that in mind, here are some of the most effective ways to start improving your metrics:

Build credibility with buyers

Trustworthiness, respect, and credibility are the foundation of sales. A client won’t buy from a vendor they don’t trust. From the language your marketing and sales team use to buyer enablement content to how you conduct your sales activities - everything needs to be aimed at creating trust and building a strong relationship.

Use sales tools

Whether in B2B or B2C sales, there is so much to keep track of that it’s virtually an impossible task for salespersons to do manually. Many sales tools exist today that help streamlines the sales funnel, scale sales volume, and manage customer relationships. Sales intelligence, account-based marketing (ABM), sales monitoring, and customer relationship management (CRM) solutions all have their place in the modern sales team.

Sales rep accountability

Micro-managing sales reps is unscalable, bad for morale, and promotes a factory-like approach to sales. Instead, each sales rep should be correctly incentivized to put the maximum effort into each sale. Today, there is a heavy emphasis on customer relations pre and post-sales. Whether through KPIs, commission rates, or showing appreciation, each sales rep should be incentivized to take full ownership of each lead or prospect they are responsible for.

Take a client-centric approach

Conventional wisdom dictates that you sell the benefits and features of your product. However, in today’s climate, you must show prospects why your product is helpful to them in their specific circumstances. This shifts the focus from your product to your client’s needs, pain points, and wants. Effectively adopting this approach will undoubtedly improve your sales performance.


As you can see, determining the success of your sales is not as simple as doing a straightforward profit calculation. There are many nuances to uncover that can help you align your sales performance with your overall business goals. Consistently tracking your sales metrics will help you determine the success of new marketing or sales techniques. If you want to improve your sales using any method, it starts and ends with measuring sales performance.