Sales leadership teams often determine the metrics they want to track in their Customer Relationship Management (CRM) tools to improve sales revenues, diagnose pitfalls in current sales processes, or identify and improve overall sales and go-to-market strategies for the company.
For larger companies, this tends to be a team effort involving employees with experience who have tracked sales metrics in the past.
When I started as a VP of Sales at a smaller company, I realized this is uncharted territory for many small and medium businesses and startups, a skill many business owners lack.
While there are many important sales metrics for small businesses and startups to track to improve their sales revenues (literally hundreds), starting with a shorter list can be much more palatable and provide a great return on using your CRM. So, here are the top 5 sales metrics I believe all businesses should be tracking in their CRM.
What Sales Metrics Should You be Tracking in Your CRM?
To get the best bang for your buck, the first 5 metrics you should begin tracking are:
Lead Source
Sales Cycle Length
Closed Won Percentages
Business-Specific Account Information
Close Dates
Lead Source
In my experience, the Lead Source is the single most important metric for your team to track in your CRM.
Simply put, the Lead Source is how a lead, or a prospect, has made contact with your company. There are many examples of lead sources for your business to track and they often vary based on company needs, however, I have listed many common examples below:
Web Lead
Pay Per Click
Sales Developed Lead
Tradeshow/Conference
Webinar
Partner Referral
Customer Referral
Purchased List
Other
Here is an example of some of the default lead sources that Salesforce can track.
By tracking Lead Sources over a substantial amount of time, your business can easily identify where prospects are finding your business. With this information, you can cut ties with sales efforts with a high acquisition cost, or you can double down in areas where your business excels.
Sales Cycle Length
CRMs allow companies to define their sales cycle steps and, more importantly, allow them to track how long it takes for leads to go from a new lead to Closed Won.
Sales planning turns into math as you acquire more information. Knowing the Sales Cycle Length, you can more accurately forecast sales over an extended timeline as new leads come in.
For example, let's say that you identified with your CRM that your average Sales Cycle Length is roughly 60 days from start to Closed Won (or signed contract/purchase). You can then begin to plan your revenue 60 days from a new lead coming in (we will hone in on this planned revenue number even closer in the next section!).
Closed Won Percentage
Something important to remember about CRMs is that the longer you use your CRM, the more valuable it will become for your business. Closed Won Percentage, the amount of deals you win vs. the amount of deals you lose, is one of those metrics that becomes much more powerful over time.
Closed Won Percentage allows your team to approximate the number of deals that will close over a period of time (by the way, this can be at a company-wide level, a team level, or an individual level).
Like I mentioned in the last section, your CRM can turn sales into math - and the Closed Won Percentage is a huge factor. By taking the Closed Won Percentage and multiplying it by the number of leads you have coming in, you can approximate the number of deals that will likely close of the next month, quarter, or even year! (ex: if my Closed Won Percentage is 30% and I had 10 leads come in last quarter, I can assume 3 deals will close next quarter).
If you are using your CRM to its fullest potential, you can take it a step further and attach the Sales Cycle Length to that number and start to forecast more accurately. If we keep the same cycle length of 60 days, we can take our 30% Close Won Percentage and plan that 30% of leads will close within 60 days of coming through the door! The dollar amount will be specific to your business, but by leveraging the numbers provided by your CRM, you can fairly accurately see what the revenue generated over the next 60 days will be at any given time.
Business Specific Account Information
This is where your CRM can become extremely customized for your business. High-quality CRMs allow you to easily add custom fields in your instance.
This is also where spending dedicated CRM planning time can have huge long-term returns.
For example, if you work in B2B selling services, you may want to add a field that tracks each account's industry (CPG, retail, Food & Beverage, etc.). Or, if you work in the healthcare space you can add a field that will track the type of hospital.
Again, this will only get more informative over time. So, as you begin to win deals (or opportunities, as they are called within CRMs), you can track what types of industries have been the most successful for your team. Conversely, you can track which deals you lose most frequently and which industries you should pull back on.
The world is your oyster when it comes to data tracking, as you can add as many custom fields as you need for your business. There are a few things to be aware of when it comes to adding fields.
If you add too many fields, your salespeople (whether it's you, a group of founders, or you have a team) may get too bogged down adding in the CRM rather than performing sales activities.
CRM data is only as good as its input, so you must be careful which fields you require inputs for. For example, industry is a good input because it is typically clear and concise. Conversely, Net Income is a more dangerous metric as it is most likely pulled from various sources and will often be inaccurate. Remember, clear and concise is best.
Data tracking in CRMs for small to medium businesses and startups can look very similar, however, remember to set aside meaningful time to plan exactly what your team needs to track for your CRM to provide maximum value for your business.
Close Dates
If you have ever been on a large sales team, you know the Close Date is a leadership team's favorite field to look at.
Close Dates provide direct insight into when the salesperson running the opportunity thinks the deal will close. This metric is the leadership's favorite to track because it encompasses every detail of each opportunity and skips over the nitty-gritty of the conversations and deal specifics.
So why would you want to track Close Dates in your business? There are a couple of reasons this is valuable.
It forces each salesperson, or whoever is running the deal, to be extremely knowledgeable of the deal, the prospect, and the prospect's buying process.
It requires thought and planning from the salespeople and their managers.
Finally, it allows leadership a second opportunity to forecast deals, but this time the forecast includes the salesperson's insight that accounts for deal-specific variables.
Why Should You Spend the Time to Track CRM Data?
Plain and simple, if you want to grow your sales team at a fast pace and create repeatable processes, using your CRM to its maximum is a MUST. There is no way around it.
The good news for businesses is that your CRM is like a fine wine - it will only get better with time. So start small, understanding that the tool will evolve!
As someone with experience here, start with a manageable number of metrics to track. Move on when you feel ready.
Remember, only choose metrics that are clear and concise, work diligently to be accurate with your data, and stick with it. A good CRM can help take a business, whether a start-up, a small to medium business, or a larger enterprise organization to the next level and drive extremely profitable returns (plus boost your sales revenue to new heights!).
Need Additional Sales Help?
If you want to learn more about Spurr Sales and how we help businesses implement profitable sales processes, reach out to our team and let us know what brought you to us. Our passion is helping startups and small and medium businesses grow by transforming sales teams!
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