Why Sales Metrics Are Important

For sales managers, sales metrics are a crucial strategic tool. They point out weak spots and potential growth areas, so you can better direct and train your sales team. When you understand the importance of metrics in sales planning, it is easier to develop the most effective strategy for your company and industry.

A strong sales strategy is a responsive strategy, one that adjusts quickly to changing market conditions, customer demand, and other external factors. Sales metrics provide a quantitative way to assess sales performance and make changes on the fly. They allow you to check in on how the sales team is doing at any point. With well-developed metrics, you can identify poorly performing team members and spot weak areas in the team as a whole. As a result, it is easier to develop individualized trainings that help build a strong sales team and drive the business forward. Metrics also help you identify unresponsive or promising market segments or products, so you can tweak the sales strategy and see the effects in real time. If a certain product in the lineup is not doing well in a sales-by-product metric, you can focus your efforts on products that are selling well. Sales metrics act as a compass, both in the short and long term. Without them, a sales manager is essentially flying blind.

In the sales process, the human element is key. Unfortunately, humans are fallible. Sales metrics counteract human shortcomings by creating an objective performance analysis. They help keep you grounded in reality during the sales management process. Instead of relying on your intuition or perceptions, you can use the cold, hard data from each metric to gauge the success or failure of a particular sales strategy. If, for example, you have a feeling that a certain lead source will boost business, a simple "sales by lead source" metric can either verify or nullify your belief. Though intuition is often crucial for sales managers, metrics help keep it in check.

When it comes to sales metrics, it is entirely possible to have too much of a good thing. Too much data can be overwhelming, making it difficult to make sense of the information on hand. Add to that the considerable amount of time it takes to collect data, analyze it, correct course and measure the effectiveness of each change, and your company will soon be wasting valuable resources. Instead, Inc. magazine recommends that you track only the factors over which you have influence. In a study by Vantage Point and the Sales Education Foundation, 83 percent of the metrics tracked by common sales and CRM software were outside of management's ability to control. By focusing on the metrics that you can influence, you'll make the most efficient use of your time and boost sales performance.

Whether you work in a new company or an established corporation, it's never too late to start using sales metrics. When used correctly, metrics help develop a constantly evolving sales management framework that increases profits and ensures long-term success.

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