Sales metrics: When, how, and why to track them

Your team generates thousands of data points each month, but which sales metrics actually matter? With 84% of reps missing quota last year and enterprise deals now taking 1-2 quarters to close, tracking the right sales performance metrics isn't optional.

The challenge isn't gathering data; it's knowing which metrics predict outcomes and which waste time. This guide covers the most important sales metrics to track, from sales pipeline metrics that forecast deal health to activity benchmarks that separate top performers from the rest.

What are sales metrics?

Sales metrics are quantifiable data that measure specific parts of your sales process. Revenue teams use sales metrics to improve their progress and performance. Without the right metrics, sales teams waste time, resources, and revenue on processes that don’t contribute to their success.

Metrics act as significant indicators of a sales team’s health and overall effectiveness; so using them properly can help boost rep productivity, efficiency, and execution. They can shed light on the parts of your sales process that should be adjusted, eliminated, or repeated, helping you maintain a competitive edge.

It’s important to note that sales metrics are only truly valuable if your team is consistently collecting high-quality data. This is challenging (if not impossible) if your team still uses outdated, manual data collection methods, like spreadsheets or disparate tools.

To get the most out of your data, you need intelligent sales analytics software that transforms your metrics into actionable insights. Powerful sales engagement platforms, for example, equip your team with real-time metrics and intuitive dashboards that increase visibility across the entire sales process.

With tools that centralize and standardize all your key data in a single place, reps save the time otherwise spent on manual data entry. Sales teams always have a comprehensive, up-to-date understanding of the end-to-end sales process, so they’re empowered to make data-driven decisions that improve their outcomes.

Sales metrics vs KPIs

While the terms “sales metrics” and “sales key performance indicators (KPIs)” are sometimes used interchangeably, there are actually some key distinctions between the two. Sales metrics can simply refer to data that measure a specific part of your process, but sales KPIs require a particular target or objective against which they’re measured.

While metrics come in a wide array of values to your organization, KPIs are always valuable because they’re intentionally set with a goal, timeline, and business outcome in mind. For example, your team might track the number of emails opened by prospects as part of their sales process. 

But adjusting their strategy and establishing outcomes that are tied to broader initiatives around that number is likely a fruitless endeavor, so ‘opened emails’ probably isn’t worthy of KPI status. 

Your team might otherwise find great value in measuring the buyers’ intent behind opening those emails, which would further illuminate the effectiveness of their messaging. In this case, buyer sentiment, a feature of Outreach Engage, might be the more relevant KPI, as it more thoroughly assesses and classifies specific responses into several categories, like:

• Positive
• Objection
• Referral
• Unsubscribe
• Other

Intelligent sales engagement tools make it easy to turn your vanity metrics, like clicks, opens, and reply rates, into actionable KPIs that drive better outcomes. They use buyer sentiment analysis to help sales teams identify buyer intent, tweak their engagement strategy based on real-time data, and drive better results than metrics alone.

The most important sales metrics

The sales metrics that will provide the most value to your organization will vary depending on factors such as your goals, use case, team structure, and more. Once you hammer down these details, you should choose the metrics that help illustrate the story you’re looking to tell or investigate.

Below, we’ve compiled a thorough list of the most important metrics for modern sales teams and categorized them into several relevant buckets. But before you dive in, here’s everything at a glance:

The table above gives you the complete picture at a glance. Before you get overwhelmed, we'll dive deeper into each category so you know what to track, when to track it, and how to use these metrics to drive better outcomes.

1. Sales activity metrics

Sales activity metrics reflect the progress of your team’s behavior. They’re vital for understanding how individual efforts contribute to the team’s overall success.

• Number of Leads Created
• Number of Emails Sent
• Number of Calls Made
• Number of Follow Ups
• Number of Meetings Scheduled

2. Sales pipeline metrics

Keeping your pipeline as healthy as possible requires a deep understanding of how deals are progressing and any issues that might be holding things up. 

Number of qualified leads

Filling your sales pipeline with under-qualified leads won’t do your team much good: In fact, it’ll muddy the waters and negatively impact reps’ close rates. Tracking the number of qualified leads (based on your team’s specific criteria) in your pipeline over a given period of time can help you better optimize your prospecting process.

Win rate

Deal win rate is calculated by dividing the number of closed, won deals in a particular time period by the number of opportunities created during that same period. It’s a great way to determine how effective your team is at getting deals across the finish line and onboarding new clients.

Average deal size

Typically, smaller deals take a shorter amount of time to close than larger, enterprise-level deals, which generally require more decision-makers. Average deal size helps your team fine-tune their sales strategy, target accounts that will likely close in a desired amount of time, and increase pipeline velocity. Calculate the average deal size by adding the value of all your closed deals, then dividing it by the total number of deals.

Customer acquisition cost

Your customer acquisition cost (CAC) is the amount it costs your sales and marketing teams to land a new client. If your CAC is high, your team can re-evaluate the efficiency of their spend, identify areas of unnecessary spend, and more accurately assess their growth capabilities. CAC is calculated by dividing the sum of your marketing and sales costs by the number of closed deals during a particular period of time.

Average sales cycle length

The length of your sales cycle, or the time it takes for an initial lead to become an actual buying customer, helps teams evaluate the efficiency and effectiveness of their strategy.

Pipeline coverage

Sales pipeline coverage refers to the ratio between the dollar value of your sales funnel and your revenue targets. If, for instance, you have a pipeline coverage ratio of five, it means your total pipeline is five times your quota. Thus, you need to close 20% of the pipeline’s value in order to meet your sales goal.

Deal slippage

If a deal doesn’t close within the intended or committed timeline, it’s considered “slippage.” Calculate your deal slippage rate by taking the number of deals that failed to close within their committed time period and dividing it by the total number of committed deals for that same period. This information is vital for identifying which deals should be prioritized in the upcoming period.

3. Sales lead generation metrics

Lead generation metrics help improve sales and marketing alignment to ensure both teams are working toward the same goals.

Cost per lead

Cost per lead refers to the average amount of money your team spends to acquire a new lead. You can calculate this metric by dividing the amount you’ve spent by the total number of new leads you’ve acquired.

MQL to SQL

Your MQL to SQL is the rate at which marketing qualified leads (MQLs) are converted into sales qualified leads (SQLs). This metric helps sales teams better target their intended audience and is calculated by dividing the total number of SQLs generated by the total number of MQLs generated over a given time period, then multiplying that number by 100.

Conversion rate

Your team’s conversion rate is the number of qualified leads that result in closed-won deals. By consistently tracking this metric over time, you can better understand how efficiently your team turns new leads into paying customers. Calculate your conversion rate by dividing the number of leads converted into sales by the total number of qualified leads over a specific time period.

Average lead response time

Your average lead response time measures the amount of time between new lead creation and when your team sends an initial response. It’s a metric that’s essential for evaluating lead follow-up and determining how that follow-up impacts conversion, both on an individual and team level. 

To calculate lead response time, take the total amount of time between lead creation and initial response (for each lead assigned to a specific rep), and divide that by the number of leads responded to.

4. Sales productivity metrics

It’s crucial to track (and improve!) the efficiency and productivity of your reps. Sales productivity metrics help you understand where your reps are spending the majority of their time so you can reduce any superfluous, time-intensive activities that hinder their success.

Time spent on selling activities

Most reps spend only a third of their time actually selling. By measuring the average time each rep (and your team as a whole) spends on selling activities, you can identify areas in the sales process that hinder their productivity to better maximize their time.

AI agents can reclaim hours of selling time by automating account research, meeting preparation, and post-call follow-ups that traditionally consume 15-20 minutes per prospect.

Time spent on manual data entry

Manual data entry is a productivity-killing task for most sales teams. If your team still relies on manual data collection collections, you’ll likely be surprised at how many hours reps spend entering, transferring, and syncing information throughout the week. Use this metric to determine whether or not automation can add more value to your team’s days.

Modern revenue platforms automatically capture emails, calls, and meeting notes, eliminating manual CRM updates and ensuring data accuracy without rep effort.

Average number of sales tools used daily

If your reps need to toggle between apps and platforms throughout the day to complete their sales tasks, they’re likely wasting precious time. Take stock of the technologies your team relies on and decide if software consolidation would help your reps focus on what they do best: Selling.

Unified platforms reduce context-switching by consolidating 4-6 point solutions into a single system, letting reps access engagement data, conversation insights, and deal intelligence without leaving their workflow.Sales KPIs

It’s important to consistently track your sales metrics: But if one metric in particular is clearly driving or hindering performance, it may be time to bump that metric up to a KPI. Here are some valuable sales KPIs to get you started:

5. Sales KPIs

It’s important to consistently track your sales metrics, but if one metric in particular is clearly driving or hindering performance, it may be time to bump that metric up to a KPI. Here are some valuable sales KPIs to get you started:

Annual recurring revenue

Annual recurring revenue (ARR) refers to your organization’s overall predictable revenue across the entire year. It’s essential because it demonstrates your company’s growth and helps you forecast future revenue moving forward. To calculate ARR, simply add up the monthly revenue your team brings in from each customer and multiply that total by 12.

Average revenue per user

Your business’s average revenue per user (ARPU) is the mean of revenue from each individual account or customer. It’s typically calculated per month or year, depending on your sales or business model (e.g., if your company offers monthly contracts, calculate ARPU on a monthly basis; if you offer only annual contracts, calculate ARPU on a yearly basis). To calculate ARPU, divide your total revenue over a particular time period by your total number of users.

Churn rate

Your churn rate refers to the percentage of your customers who cancel their recurring subscriptions or jump ship when it’s time to renew. Since boosting your retention rates by just 5% can increase your profits by 25% to 95%, understanding and ameliorating churn is paramount to your company’s success. Calculate your churn rate by dividing the number of customers lost over a specific time period by the total number of customers at the beginning of that period.

Customer lifetime value (LTV)

Customer lifetime value measures the total revenue you expect to generate from a customer over their entire relationship with your company. Calculate LTV by multiplying your average revenue per account by your gross margin percentage and the average customer lifespan. The optimal LTV:CAC ratio is 3:1. If it costs $1,000 to acquire a customer, they should generate $3,000 over their lifetime.

Monthly recurring revenue (MRR)

Monthly recurring revenue tracks the total predictable revenue your company expects to generate each month from subscriptions. Calculate MRR by multiplying your average revenue per account by your total number of accounts that month. Break it into three components: new MRR (revenue from new customers), expansion MRR (revenue from upsells and cross-sells), and churn MRR (revenue lost from cancellations).

Net revenue retention (NRR)

Net revenue retention measures the percentage of recurring revenue retained from existing customers, including expansions, upsells, downgrades, and churn. Calculate NRR by taking your starting MRR, adding expansion MRR, subtracting churned MRR and downgrade MRR, then dividing by starting MRR and multiplying by 100. NRR above 100% means you're growing revenue from existing customers faster than you're losing it.

Net promoter score

Your net promoter score (NPS) helps you measure customer loyalty. To calculate NPS, ask your customers to rate how likely they are to refer your company to others on a scale of 1 to 10. It’s a great KPI for identifying detractive or passive customers, enabling you to follow up and assess why they’re not promoting your company.

Buyer sentiment

Buyer sentiment is crucial because it allows your team to measure a buyer’s emotional reaction to an engagement. It can help you shorten your sales cycle, break buyer silence, and indicate where your team should invest its efforts.

Sales KPI templates and dashboards

Tracking, measuring, and analyzing all of your team’s most essential metrics and KPIs can seem like an enormous, time-consuming undertaking — especially if you don’t have the proper tools for support.

With tons of metrics to track across activity, pipeline, productivity, and KPIs, the question isn't what to measure; it's how to make sense of it all. Sales dashboards consolidate these metrics into visual formats that reveal patterns, surface risks, and guide decision-making.

Luckily, premade KPI templates and dashboards take a lot of the legwork out of the equation. Platforms like Outreach offer easy-to-use, intuitive AI-powered dashboards that pull all the activity metrics from your CRM, plus additional customer engagement metrics. This gives your team the most comprehensive view of your deals' health, enabling them to intervene before it’s too late. The result is a more effective, efficient team backed by real-time data to improve business outcomes.

Your sales dashboards will vary depending on the tools you use, your specific objectives, and how up-to-date your data is. 

Here are some examples of KPI dashboards that sales leaders commonly use on the Outreach platform:

Sales cycle over time

With the sales cycle over time metric, leaders can see how their cycle evolves on a month-to-month basis. The dashboard illustrates each sales stage in a different color in the chart. For each month, the chart shows deals that were closed and won within that given month, regardless of when they were created. The stacked bar representing that month shows the average days they spent in each stage.

Weekly productivity

Using scorecards, managers can more accurately analyze their reps’ productivity by combining and tracking any number of variables from week to week. They can set multiple goals across those different variables and assign a weight to each goal. Once the weight has been set, the platform automatically generates a productivity score, represented here by the red, yellow, and green stoplight scorecard.

Closed loss reason

With this metric, sales teams can break down the various lost reasons within their CRM and easily analyze where things are going wrong and what the average value of those deals is. Each closed loss reason is displayed in the table on the right side, keyed by color. For each average, the platform looks at all of your team's closed loss deals within the last 12 months.

Leading and lagging indicators in sales

Sales look to leading and lagging indicators to make predictions and evaluate their results.

• Leading indicators help you predict the results of your team’s performance. They offer insights into where your team is headed while there’s still time to course-correct, if needed. This might include the number of new opportunities created, the number of new quotes, or the average opportunity size.
• Lagging indicators, on the other hand, are unchangeable and reflect your team’s results. This can include revenue generated, the number of closed won opportunities, or quota attainment over a given time period. Sales teams use lagging indicators to adjust their sales plans for better outcomes moving forward.

Turning metrics into action with sales dashboards

Your team’s ability to make meaningful, insights-driven improvements that boost performance and support a more predictable revenue cycle relies on the metrics they use and how they use them. Simply capturing massive amounts of data won’t cut it, and neither will measuring and analyzing vanity metrics that don’t provide any real value to your business.

Outreach makes it easy to access comprehensive information about your end-to-end sales process, all in one single pane of glass. The platform helps sales teams build beautiful, extensive dashboards that offer full transparency into their most valuable data, updated in real-time.