Most Important Metrics to Watch in Sales for Startups

All startups try different sales and marketing strategies to increase income as quickly as possible. However, it is hard to determine what is and what is not working in the absence of measurable and timely feedback. Sales metrics assist you in deciding which marketing channels are functioning well and which sources are providing high-quality leads. Once you begin consistently monitoring sales metrics, you will be able to enhance them methodically and increase your sales.

Here are some essential Sales metrics:

Lead Volume 

Lead volume refers to the number of leads obtained through various routes. This metric can be tracked weekly or monthly, and the lead volume can be compared to the preceding week or month. This will show you how much it has developed over time due to your marketing efforts. You may also divide the lead volume into leads generated by each source to determine which providers are the most effective at generating leads. It is also critical to track qualified leads rather than every lead. Qualified leads have gone above and beyond simply contacting you and have expressed an interest in purchasing your product.

Cost Per Lead 

The cost per lead is the cost of obtaining a lead. It consists of time, people, and capital costs (such as sponsorship costs for an event, salaries, benefits, etc.). You can divide the overall cost of creating quality traffic by the number of qualified leads made for each source of leads. Analyzing this for individual channels such as SEO, Social Networking sites, Direct Marketing, Email Campaigns, and so on reveal intriguing tendencies. You can check which channels have the best ROI (return on investment) and which efforts produce the best results.

Close Rate 

The proportion of leads that turn into actual sales is referred to as the close rate. You may track the average close rate throughout your entire firm to better understand its general trend. You may also categorize it by the numerous channels/sources via which you get leads. When you compare close rates across channels, you can observe how successfully each source generates quality leads. When combined with lead volume, it provides a clear picture of how each channel affects your revenue.

Average Sale Value 

The average revenue per sale is defined as the average sale value. It is the average value of a transaction in a transaction-based business such as E-commerce. Keeping track of average sale value allows you to assess the worth of each lead and tailor your marketing efforts accordingly. This statistic can be broken down by source better to evaluate the effectiveness and efficiency of different channels. This also aids in forecasting sales, inventory management, and marketing expense allocation. When combined with additional information, such as client type, product or service attributes, and so on, it can provide a more accurate picture of customer behavior.

Time to Close 

Time to close is the length of time it takes to go from acquiring the initial lead to closing the deal. It tells you how long your sales cycle is on average and what actions you need to undertake to reach that average. You can also determine the procedures performed when the time to close is low and try to repeat them or when the time to close is unusually long and quickly discover such leads. Such leads may have unique requirements that you may proactively meet early in your sales cycle to shorten the time to close the sale.

Retention Rate 

The percentage of clients who persist in using your service or product after the original sale is the retention rate. Do they provide subscription renewals or repeat sales? How long do they stay before abandoning the ship? The greater the retention rate, the better. Monitoring retention rates from multiple sources can help you determine whether the cost of generating leads is worthwhile. For example, a lead source with a lower conversion rate but a greater retention rate is preferable to one with a higher but lower retention rate. Otherwise, consumer churn will make revenue growth impossible.

Conclusion

First, you can develop a simple sales performance scorecard and share it with your team to track these KPIs. Do ensure efficient sales funnels are in place. Monitoring it on a daily/weekly basis can show you how your promotional strategies are doing compared to your sales targets. Then, as your company grows and you sense a need to track more information, you can add new metrics to it.

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