If your sales team isn’t meeting its goals, don’t be surprised. Data reveals that salespersons spend only about a third of their day actually talking to prospects.

Most of their remaining time is spent on back-end processes such as:

  • Writing emails (21%)
  • Entering data (17%)
  • Prospecting and researching leads (17%)
  • Attending internal meetings (12%)
  • Scheduling calls (12%)

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Think about it – salespersons are not exactly trained to fill up data. Their expertise lies in engaging your prospects and converting them into paying customers. By engaging them in back-end processes that support sales, you reduce productivity at both ends.

Introducing a sales operations team can thus prove to be a gamechanger, leaving your sales reps with no other function than growing customer relationships and spend more time selling. 

The Importance of Sales Operations Metrics

The primary role of sales ops is improving sale processes that directly support sales – like generating leads, setting up loyalty programs, managing sales analytics, setting up calls, etc.

Besides helping sales managers achieve their targets through supporting activities, a sales ops team also assumes several administrative and operational functions like:

  • Recruiting and training sales staff
  • Content and knowledge base management
  • Generating data-driven reports and insights for strategic planning

Naturally, your sales team’s success is also tied to the performance of the sales ops. This necessitates the use of performance metrics to make sure the framework of your sales operations is working.

In the next section, we will discuss the top 5 sales operations metrics that will help you track the performance of your sales operations model and identify the areas that need attention to fine-tune your model accordingly.

Top 5 Sales Operations Performance Metrics

Preferred sales operations performance metrics might vary across organizations. However, the performance metrics discussed in this section are most commonly used and help you track the most vital aspects of your sales operations strategy.  

1. Sales Quota Achievement Rate

Quota achievement rate refers to the percentage of deals closed by a sales rep in relation to their fixed quota for a specified period. 

You can use this metric to track your sales team’s performance and identify representatives that need more coaching or guidance to meet their targets. Additionally, tracking the percentage of sales reps meeting their quotas will tell you whether you have set realistic targets or not.

For instance, your quotas might be unrealistic if only a tiny percentage of representatives are meeting them. A low quota attainment rate might also signal the need for structural changes, like improving your compensation plan to give your sales representatives some additional motivation to sell. 

On the other hand, if over 90% of your sales reps are hitting their targets, you may need to review your quotas and set higher targets.

2. Win Rate

Your sales win rate is the ratio of won opportunities over the total number of closed opportunities (both won and lost). By analyzing your win rate, you can calculate the sales pipeline coverage you need to meet your sales targets. 

3. Deal Size

Again a primary but essential metric, the average deal size refers to the average revenue earned for each closed deal.

It is calculated by dividing the total value of closed deals over a specified period by the total number of deals. For instance, if a company closes three deals in a month, worth $10,000, $15,000, and $20,000, the average deal size for that month would be $15,000.

The average deal size helps you plan your targets better. For instance, if it is going up, it means you are going upmarket as your contracts are getting larger. However, if you are focusing on subscriptions, this number should go down, as you want the number of customers to increase. 

Calculating the average deal size also helps you in identifying the outliers. For instance, if a salesperson is working on an opportunity that’s much larger than your average deal size, the likelihood of this deal going through is much lesser, and the sales process will be much longer.

In such a case, the sales operations team must ensure that the other deals in the salesperson’s pipeline are more likely to convert so that the overall quota targets are not affected. Sales reps with extremely small average deal sizes also need attention to perform better.

4. Pipeline Value

The pipeline value is the estimated value of your sales pipeline at a specified time in the sales process. This value is quite helpful in making profit/loss forecasts.

For instance, you can measure the sales pipeline value at different stages of the sales process like lead generation, prospecting, and meetings booked.

Typically, you’d see the value declining as you move towards the end of the pipeline. However, the prospects towards the end of the pipeline are also the closest to converting and turning into paying customers. 

5. Forecast Accuracy

A sales operations team has access to a lot of data that can be used for sales forecasting. Forecast accuracy is a metric that compares the rate of error of the forecasts versus the sales team’s actual performance.

A high error margin could be due to inadequate data or certain outliers in the data. By investigating the cause of the error, it becomes possible for the sales operations team to fine-tune the forecasting models for greater accuracy in the future. 

Top 5 Sales Operations Efficiency Metrics

In addition to the sales operations performance metrics, you may also consider these key performance indicators to measure the efficiency of your sales operations strategy.

1. Length of Sales Cycle

The length of the sales cycle is the average amount of time between the first contact with a prospect and closing a deal. Ideally, this time should come down gradually if your sales operations process is working correctly.

Typically, a sales operations model aims to generate better leads, qualify them faster, and create efficient processes that leave salespersons free to focus on selling – leading to shorter sales cycles. 

2. Selling Time

Selling time can be defined as the time spent by your sales representatives in speaking with a prospect as opposed to doing administrative tasks like filling data. Generally, organizations rarely keep track of this metric, but it is pretty helpful in gauging your sales operations’ efficiency. 

An efficient sales organization divides the sales process into two parts:

  • The back-end, which is dealt with by sales operations to support the front-end.
  • The sales representatives, who actually sell a product.

If your sales operations team is working, then selling time should be exceptionally high because sales ops handle all the admin tasks. 

One of the simplest ways of tracking this metric is asking your salespeople about the administrative work they are doing. If they feel they’re hardly doing any admin tasks, it implies your sales operations model is working. You may even track the number of calls made by your sales team to determine how much time they spend on hardcore selling. 

3. Lead Response Time

Lead response time is a critical metric affecting your conversion rate. It refers to the time it takes for your sales team to contact the leads passed on by the marketing team. 

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In the image above, you can see the results of a survey conducted by Prof. James B. Oldroyd at MIT. Clearly, the lesser the lead response time, the greater is the chance of qualifying the lead.

According to this survey, waiting for even an hour reduced the chances of qualifying a lead significantly. Additionally, the chances of qualifying a lead were found to be 21 times better if the lead was called within five minutes. 

4. Number of Prospecting Meetings Per Period

The number of prospecting meetings per period measures the prospecting activity or the number of meetings set by individual sales personnel in a given period. This is also one of the most arduous tasks to track, as prospecting is considered the most challenging aspect of sales, according to 40% of sales reps.

If your sales operations team faces this problem, it is perhaps time to shift to video prospecting or using videos for sales

For instance, we mentioned at the beginning of the post that sales reps spend about 21% of their time writing emails. But what if you could add a pre-recorded video to an email instead of typing out a long email? A video prospecting software helps you in the messaging phase and improves follow-up by giving you real-time analytics data.

Hippo Video is a sales video tool that lets you record sales videos on the fly, attach pre-recorded videos to emails, and notifies you as soon as your prospects have watched your videos. Acting upon this data, you can follow up with your prospects when they are most engaged and likely to respond to your pitch better.  

5. Pipeline Efficiency

Pipeline efficiency measures how effective is your sales operations team at managing the sales pipeline. 

A sales pipeline can be understood as a visual representation of where your prospects are in the sales process. It shows you the number of deals that the sales team must close in a specified period to achieve their sales quota.

For example, if you have a sales pipeline worth $50,000 in value and your conversion rate is 5%, you can expect to close $2,500 worth of business. But if your sales target is $5,000, you’d need to convert twice as many leads. This is where pipeline efficiency comes in.

If your pipeline efficiency is low, you must analyze it closely to identify the improvements within your pipeline that will help you move prospects to the subsequent stages without dropping out. Tracking these sales pipeline metrics and periodically reviewing your sales pipeline will help you iron out the creases. 

Frequently Asked Questions (FAQs)

1. Do I really need a separate sales operations team?

Ideally, yes. Your salespersons spend a lot of time on admin tasks that are meant to support sales instead of actually getting on the phone to sell your product or service to clients. A more viable sales model divides the sales process into two parts – sales operations and sales.

Having a separate sales operations team streamlines your sales by acting as the back-end that takes care of data, lead qualification, and other such tasks before passing on a fully qualified lead to your sales team to work their magic.

2. How do I know if my sales operation model is working?

The aim of your sales operations model is to improve the productivity of your sales reps. If you find the selling time increasing, it is an indication that the sales ops team is doing its job so that your salespersons can spend more time converting prospects into paying customers.

3. Are the sales performance metrics different from sales operations performance metrics?

Performance metrics are KPIs used to track the performance of various teams. While sales performance metrics track the efficiency of your sales team, sales ops performance metrics are used to track the performance of your sales operation team or strategy.

Metrics like the length of the sales cycle, the number of prospecting meetings, selling time, pipeline efficiency, etc., give you a glimpse into your sales model and identify areas of concern. This way, you can fine-tune the process accordingly to meet your sales goals.

The Wrap

You cannot improve what you do not measure. Therefore, to optimize your sales operations, it is vital to track sales operations performance metrics that align with your organizational goals.

Of course, it isn’t possible for organizations to track every metric, and you must carefully select which ones to prioritize to analyze your performance and achieve your sales goals.

Ayush Singh writes on tech, marketing, and SAAS, which, considering where you’re reading this, makes perfect sense.

Having worked in SAAS marketing for enterprises and startups for more than 9 years, Ayush enjoys exchanging ideas and lessons learned with other practitioners.

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