Guide to Understanding Must-Track Inside Sales Metrics How do you measure sales success?

Performance and productivity reviews are an important part of employee development. 

Someone once said, “If you always do what you’ve always done, you’ll always get what you’ve always got.” And, remember what German philosopher Goethe said: “Treat people as if they were what they ought to be and you help them become what they are capable of being.”

These two quotes underline what it means to be a sales manager these days—you need to be able to measure your team’s performance, provide support services whenever necessary, counsel individuals who perform below expectations, and generally push the entire team to meet and surpass the company’s targets.

Setting goals and objectives will give supervisors and employees a unified focus and targets to aim for. Having clear-cut indicators that gauge productivity provide companies with a basis for administrative and organizational decisions and helps provide a foundation for diagnosis and change.

The need to identify and measure productivity is especially important for sales teams, given the innate competitiveness of the industry today. More and more sales organizations are also shifting their focus from traditional field sales to inbound sales, which focuses more on generating opportunities and providing customized solutions to clients. In fact, a recent survey shows that approximately 46% of sales organizations have started transitioning to an inside sales model—making it even more important for sales managers to come up and develop specific inbound sales indicators to accurately measure the productivity of inside sales teams.

Setting the bar for sales representatives

Steve Martin, professor at the University of Southern California Marshall School of Business and author of the book Heavy Hitter I.T. Sales Strategy: Competitive Insights from Interviews with 1,000+ Key Information Technology Decision Makers” identified 12 must-track inside sales metrics that all sales executives need to pay attention to. Three of these metrics are especially relevant for inside sales professionals, such as:

Percentage of Organization Achieving Quota: This refers to the percentage of the entire sales organization that managed to reach quota for a specific period. Of course, rates will vary from one company to another but experts suggest that from a motivational standpoint, 60 to 70% of salespeople should reach quota, but the vast majority of companies are actually closer to 50%.

Average Annual Quota for Inside Salesperson: According to Martin’s research, “The overall average annual quota for an inside field salesperson was $985,000. Annual quota for computer hardware inside salespeople was $1.35 million, for computer software it was $1.22 million, for Cloud/SaaS inside salespeople the average was $795,000 and telecommunications was $730,000.” Measuring the average quotas of your inside sales team can help you look at individual quota achievement rates objectively and without bias.

Average New Deal Size: This refers to average sales price of all your closed-won deals. By measuring the average prices of new deals, you can take note of new opportunities that are significantly lower or higher than your average and find out why these deals either fall or surpass the average. Now, if your sales reps consistently clinch deals that fall below the average size, it might be because they’re consciously targeting smaller deals just to meet the quota—thus highlighting a performance issue that needs to be addressed.

On the other hand, specific metrics for call centre agents engaged in inbound sales must also be defined. Inbound call centers that make sales or take orders often use some or all of these metrics to manage staff performance. Some of the indicators that sales managers need to look at include the following:

Calls Made per Day per Sales Rep: This refers to the average number of calls handled per day by an individual sales representative.

Average Profit per Account: This is the average amount of profit generated per account by an individual inside sales representative over a defined period of time.

Average Call Wrap-Up Duration: This measures the average amount of time sales representatives spend on after-call work (such as inputting relevant information into the database) for each call.

Average Handle Time (AHT): Refers to the average amount of time required to handle a single incoming call, including after-call (or call wrap up) work. AHT is closely related to service level rates, which is another metric that also needs to be considered. Service level refers to x % of calls handled in y seconds, for example 80% of calls handled within 45 seconds.

Apart from these benchmarks, it might also be a good idea to look at the sales conversion rates of individual agents. Sales conversion rates refer to the percent of contact calls made that become verified sales. For example, if an agent manages to make 100 calls a day, how many of these calls are transformed into closed and won deals?

Looking at individual sales conversion rates can help sales managers address under-performance among agents, which can lead to lower revenues for the company. After all, some of your most hardworking sales agents may excel at generating new leads and nurturing them through the entire process of the sales cycle, only to fail when it comes to actually closing the deal. By accurately measuring sales conversion rates (or opportunity win rates), you can identify sales reps who may need further training or coaching to improve their closing abilities.

In fact, research done by Accenture reveals that mediocre performance by a majority of sales representatives cost companies 3.2 percent in potential revenue. According to Accenture, identifying and enabling these average performers to emulate the best practices of high-performing sales reps, companies can improve competitiveness by driving higher quality customer interactions and more profitable sales.

Other important sales metrics that inside sales executives need to consider also include the following:

Lead response time: This refers to the average amount of time it takes for your sales reps to respond or follow-up a lead that has initiated contact with the company. This is especially important because a recent study has shown that online leads often have shockingly short lives, and the fastest lead response times often result in the most sales, as in firms that tried to contact potential customers within an hour of receiving a query were nearly seven times as likely to qualify the lead as those that tried to contact the customer even an hour later—and more than 60 times as likely as companies that waited 24 hours or longer.

Marketing usage: There often tends to be a disconnect between the marketing and the sales team, as each one considers the other to be dispensable. But did you know that ignoring this disconnect can significantly impact your team’s productivity and can lead to wasted investments? According to the American Marketing Association, 90% of marketing content goes unused by sales. At the same time investment in content marketing continues to rise and now counts for 16% of overall budget according to according to the Information Technology

Sales velocity: Simply put, sales velocity refers to the average length of time it takes for new leads and prospects to become closed deals, as well as the average amount of time it takes for a lead to pass through each part of the sales process. Why is this important? Because it allows you to identify and troubleshoot potential jams in the process, as well as allowing you to reclassify and follow-up on leads with substantially longer than average closing times.

What do the experts say?

Measuring productivity and performance is an essential part of every sales manager’s job, and developing key performance indicators and sales metrics can be a challenging task. Let’s look at how some industry experts measure performance, and which metric they think is most important:

Author and motivational speaker Jill Konrath emphasizes the need to have high-quality interaction with leads, which can help increase conversion rates. According to her “For prospecting, watch your contact to conversation ratio. If it takes you, on average 10 email/phone contacts to set up a meeting (via phone, skype, in person), your goal should be to try to reduce it to 8. To do that, you need to focus on increasing messaging effectiveness — so we’re back to quality again.”

For social selling advocate Jeff Sheehan, revenue growth was the primary thing to look at. According to him “the number one measure for sales is the amount of revenue which is generated versus that forecasted […] there is no reason to be shipping money with every sale unless there is a significant strategic reason for so doing.

Jim Keenan, founder of A Sales Guy Consulting, focused on getting results over gathering data. For him, the number one sales metric that needs to be considered is “quota attainment”.

Smooth Sale CEO Elinor Stutz advocates beginning everything with the end in mind. According to her, “professional salespeople should look at their targeted quota and bonuses available for achieving more. Reflect upon how many sales are required, the most likely candidates who will purchase, and the prospecting required to keep the pipeline filled at all times. Come to terms with the number of contacts required, and dedicate yourself to the task in order to make the ultimate sales reality.

Lori Richardson, Founder & CEO of Score More Sales, highlights the need to be organized and systematic when it comes to gauging sales performance and team productivity. “A productivity metric every salesperson should be paying attention to is the number of opportunities prospected to qualified to closure,” she says.

Being on top of key performance indicators is essential to inside sales success.

Adjusting and readjusting your tactics can hurt if you’re not basing them on real facts. How do you monitor this data in your team? Are you keeping track of these sales metrics?


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Dan Sincavage

Dan Sincavage

Dan is a Co-Founder of Tenfold and currently serves as the Chief Strategy Officer. Dan oversees the Tenfold sales organization, manages strategic partner relationships and works with key enterprise accounts to ensure their success with the Tenfold platform.

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