You’ve developed a strategy and set goals, but how do you know if you’re on course to meet those goals? You have a feeling for what works or what doesn’t, but how do you verify your gut feeling? The answer is by looking at the data and tracking the right metrics. You probably already gather a lot of data, though, and there are a lot of things you could be measuring. How do you know you’re measuring the right things? There’s more to it than can be covered in a brief blog post, but this article will help get you thinking about the relationship between goals and metrics: how your goals determine which metrics to pay attention to, and how to interpret data to make decisions.

The Difference Between Metrics and KPIs

Key Performance Indicators do exactly what they say on the tin: they measure your performance toward achieving your strategic goals. When you set SMART goals, your goals have specific, measurable (the S and M in SMART) targets attached. KPIs are what let you know if you’re succeeding or not.

Metrics, on the other hand, are useful for making decisions or troubleshooting. Applied to sales performance, the right metrics provide insight into your sales enablement strategy and the sales cycle that can be used to refine strategy. They’ll let you troubleshoot parts of the sales process so you can do more of what works and less of what doesn’t. 

Goodhart’s Law tells us why it’s important to draw the distinction between KPIs and metrics: “When a measure becomes a target, it ceases to be a good measure.” For example, if you’re trying to increase the number of meetings your sales team has with qualified leads through an email marketing campaign, and you decide open rate is a KPI, your team will create emails that get opened (perhaps through attention-getting subject lines), not necessarily emails that get the right kind of leads to request a meeting with a salesperson. That doesn’t mean open rate is a useless metric: if your email campaign has not been successful, a low open rate (or a high open rate and low click-through rate) can help you figure out exactly where the problem lies.

What is the decision-making process for choosing the right KPIs? See this article for more.

Typical Metrics and What They’re Good For

Lead Generation: If you’re looking to improve the number of leads your marketing and sales teams bring in, or are wondering why your leads aren’t converting, look at MQL to SQL, or the percentage of marketing qualified leads that become sales qualified leads. If the rates are low, you might have a disconnect between what marketing thinks a good lead looks like and what sales thinks a good lead looks like. If your MQL to SQL rate is good, but leads aren’t converting, marketing might be bringing in the right kinds of leads, but sales isn’t communicating with them in the most effective way.

Sales Cycle Speed: A faster sales cycle generates more revenue in a shorter period of time. Know the average sales cycle for your industry and look for ways to close deals faster. Develop ideal customer profiles to get to know the kind of customer you want, create customer journeys, and provide the right content to the right leads at the right point in their journey, tailored to their needs, to improve sales cycle speed.

Sales Team Efficiency: This measures time spent on selling activities, win rate, average deal size, and customer acquisition cost. Can the sales team be more efficient with their time? Are they focusing on the things that help close deals? Measuring sales team efficiency helps answer these questions.

Customer Lifetime Value and Customer Acquisition Cost: Measuring your customer acquisition cost can help you understand the kinds of leads you are bringing in. If your current customers cost too much to acquire, and you can tie CAC to other metrics, such as sales cycle length and churn rate, you might decide to revamp your sales and marketing strategies to court a different kind of customer. On the other hand, if those customers are generating high customer lifetime value, the high CAC might be worth it. Focusing on customer satisfaction and the needs of your customers after you make the sale can help increase CLV.

What exactly is customer lifetime value (CLV)? Get answers here.

Sales Are Not Just the Sales Department’s Responsibility

You may have noticed that some of these metrics have as much to do with marketing as with sales. Selling is the work of both marketers and salespeople, and the two departments should be working together to meet the same goals. When sales and marketing are aligned, as you’ll discover in this article, both teams will create clearer, focused, and personalized messaging that converts more leads.

A Smart CRM Makes Tracking Metrics Easy

The best use of data involves a smart CRM that can import metrics from disparate sources, creating a single source of truth for your sales team. Bringing insights from different sources and different departments together in a CRM gets your whole team on the same page, working toward the same goals. Setting goals requires a way to measure progress toward those goals. A CRM is your tool for getting the most out of the data you’re already collecting and pulling out what really matters.