Whether you are currently working a software sales job or interviewing for a new one, there are 7 software sales metrics you should know. These will help you spot areas for improvement, prove your good performance to managers and interviewers, and hit your software sales goals. Let’s go over them.
1. Calls Made Per Day
Track how many calls you make per day. This is an especially important metric if you are a sales or business development representative. Much of your work is making cold calls, so you need to track how many of those calls on average. That way you can prove to your team that you are putting in the work and also, more importantly, you can hold yourself accountable.
Also, cold calling is somewhat of a numbers game. If you ask 100 people to check out your software, at least two will probably say yes. So, if you aren’t hitting quota, take a look at your calls per day. Then, depending on where you stand, consider raising it. While it depends on your sales strategy and customer, we recommend that lead-generating reps make at least 40 cold calls a day.
2. Cold Email Reply Rate
If you are sending out 100 emails a day and only one person responds, you are going to struggle to hit quota. Sometimes reps are surprisingly unaware of their emails’ ineffectiveness.
So, instead of just hoping you are doing well, it’s better to measure the success rate of your cold email campaigns as your software sales metrics. We’ll call success a reply. At least then you have opened the doors to conversation.
So, start tracking your cold email reply rate. If you find that the number is too low, you can test your cold email templates against another one with a different subject line, body copy, or call-to-action. You can continue this process of measurement and iteration until you reach an optimal cold email.
If it’s good, this is also a cool metric to whip out during a sales interview as well. If you can boast a good email reply rate with decision-makers, it demonstrates your knack for sales messaging and copywriting, which are essential in most SaaS sales roles.
3. Opportunities Created
For many software sales reps, the ultimate goal is to create opportunities for the Account Executives. Opportunities are usually defined as meetings with a qualified lead. When you track this number you can easily prove your performance to your superiors. You can also tell if you are on the right track.
When sharing the number with an interviewer, be sure to provide some context to the number. For instance, “I booked 40 meetings” is not as intriguing or informative as “I booked 40 meetings a month and my quota was 30”.
4. Revenue Closed/Won
The ultimate goal of an Account Executive is to close revenue for the company. The revenue closed/won metric reflects how much they have closed in a certain timeframe (usually a month or quarter).
As a sales rep, you should keep these software sales metrics in your dashboard, or in plain view, as it serves as a constant reminder of where you stand in your march toward your sales target.
On the other hand, when interviewing, this will come in handy for proving your ability to meet and surpass quota. As always, give context to the number in an interview. Was it a certain percentage greater than quota? Was it the most revenue won on the team? Answers to these questions will help you stand out as a top software sales performer.
5. Average Deal Size
Average deal size is your total revenue divided by the number of deals closed/won. It gives you insight into the size of your average closed deal.
This can help you figure out ways to improve your efficiency. Perhaps you find that you have been spreading yourself too thin across a ton of small deals and that you should instead start focusing on bigger deals, for those will help you get closer to your quota more quickly.
These software sales metrics can also help you spot trends. Looking at your average deal value on a monthly basis helps you see whether your accounts are getting larger, smaller, or staying the same.
If it’s shrinking, take a look in the mirror and ask yourself if you’re just going for the easy, low-hanging fruit deals and not pushing yourself to embody Captain Ahab and spear some whales. Or, perhaps you find you are discounting too significantly this month — a nasty habit.
6. Win Rate (Opportunity to Close)
Your win rate measures the percentage of your opportunities that turn into closed deals. How you define an opportunity depends. In software sales, it usually means a qualified lead with whom you have booked a meeting.
Here’s an example of calculating it. If you receive approximately 20 opps per month, and on average 4 buy your product, your conversion rate is 20%.
Primarily, this metric helps you calculate how many opportunities you need to create or receive in order to hit your revenue targets. For example, if your monthly quota is $40,000 and your average deal size is $10,000, you need to close at least 4 deals. And if your consistent win rate is 20%, you need to generate at least 20 opportunities to hit that $40,000.
Looking over the history of your win rates, you can discern whether you are improving your sales skills or not. If your win rate is consistently trending upwards and the amount of revenue you close is increasing or staying the same, you are becoming a better seller. If your win rate is increasing but total revenue is declining, even though you might be improving at closing, you probably aren’t generating enough opportunities.
It’s important to remember that when you move upmarket your win rate will probably decrease. It’s harder to close enterprise deals than mid-sized ones.
7. Average Sales Cycle Length
Average sales cycle length is the average number of days it takes you to turn an opportunity into a closed deal. To calculate it, add up the number of days it took you to close every sale, then divide by the number of deals.
For instance, if you closed 3 deals and their respective numbers were 10 days, 30 days, and 20 days, your average sales cycle length would be 20 days (60/3).
Tracking this number and its changes over time can help you figure out if there are holdups in your sales process that are slowing you down. If you make a change and find that it stretches the length of time it takes you to close deals, you might want to revert back to the old ways.
This number also enables you to forecast how long it will take you to close a deal. This can be helpful when you are trying to beat the clock to quota.
You can also compare this number to those of your team members. If you find that your deals (equal in revenue) always take longer to close, study their process and figure out ways you can increase your sales productivity.
Knowledge Is Power
When you know your software sales metrics you have power. You can hold yourself accountable, provide evidence of your performance, and spot ways to improve. Further, it can be quite motivating to watch your numbers improve as you grow as a SaaS sales professional.