3 Popular Sales Metrics That Are Totally Overrated

The big data and analytics market is projected to reach $187 billion by 2019. That’s a huge number, but with so much buzz about uncovering insights and making data-driven decisions, it shouldn’t come as a surprise.

However, what might surprise you is that, while being a data-driven sales leader is certainly worth the time and effort, there are a few popular numbers that you may be wasting your time crunching. Let’s take a look at 3 overrated sales metrics and discuss the approach you can take to get the information you need to make smarter, more strategic decisions.

#1 Total Revenue

“But wait,” you may be thinking, “isn’t this the most important sales metric?? After all, what are we trying to do here?” Sorry to burst your sales bubble, but total revenue may actually be one of the least helpful metrics of all time. Here’s why: whether you’ve made $2 or $2 million, there is nothing about simply knowing this number that can help you make more.

Rather than focusing on your end result (revenue), you should be helping your team identify the processes, resources and activities that lead to revenue. One of the best ways to do this is by using the Sales Formula, which enables you to measure conversion rates at each stage of your sales pipeline. By segmenting deals by various dimensions like sales rep or company industry, and then running them through your Sales Formula, you can uncover actionable insights around how to improve performance.

For example, maybe a certain rep is getting hung up in a particular pipeline stage, or leads from one marketing source close at a higher rate than another. For a detailed breakdown of how this process works and step-by-step instructions to create your own Sales Formula, download this free eBook.

#2 Sales Forecast

Inside your forecast are the answers to questions like whether you should be making those additional hires or providing marketing with extra budget. And for public companies or those that are looking for funding, predictable revenue can be key to investor confidence and receiving backing. So, of course your forecast is important; the question is, who finds it important?

Sales guru and author Jason Jordan put it best when he said, “The deeper in the organization you go, the less people care about the forecast. By the time you get to a frontline sales person, they really would rather not have to forecast at all. I’ve never heard a sales person say, ‘If I didn’t forecast I would never make my quota.’ No forecast has ever changed the actual forecast.”

So, rather than asking your team to spend time predicting their future performance, ask them to focus on the areas and activities that you have identified as driving revenue. Funny enough, this will inherently result in more accurate and reliable forecasts. For a breakdown of how this “phenomenon” occurs, check out this free guide.

#3 Number of Activities

When used correctly, there is no doubt that activity metrics can be among the most useful and impactful sales data available. Where the problem starts is when managers and reps get caught up in hitting call and email quotas and lose sight of what should be their ultimate goal: closing business. While hitting these numbers may make your team feel busy, the truth is that simply making a certain number of dials doesn’t mean that they were productive or successful.

In reality, the most meaningful activity metrics look at the outcomes rather than the number of activities that reps complete. Only when you understand the outcomes of activities can you begin to comprehend the impact that they make and the steps that you can take to improve.

For instance, if you’re noticing that an excessively large percentage of your phone calls is being bucketed under “not interested,” it could be in your best interest to provide the sales team with a prospecting script. Or, if a large percentage of calls are being marked “future interest,” your reps may need some coaching around how to convey urgency to prospects.

If you’re interested in learning more about how you can define and track the sales activities that matter most to your business, this blog post should help.

Choosing the Right Metrics

There are a million sales metrics to choose from, so while being data-driven isn’t easy, half the battle is determining which metrics are most important for your team. While minimizing focus on the three overrated metrics covered in this post is a good place to start, being a scientific sales leader requires time, effort and dedication.

Our Sales Science Boot Camp provides all the materials and instruction you need to become a certified Sales Scientist. For a limited time, register using the code SALESMETRICSBLOG to receive 75% off the regular course price!

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