Sales Metrics
Frameworks for measuring and forecasting sales performance.
Leading vs Lagging Indicators
Leading Indicators (Predictive)
| Metric | Definition | Target Setting | |--------|------------|----------------| | MQLs | Marketing qualified leads | Based on conversion rates | | SQLs | Sales qualified leads | MQL x MQL-to-SQL rate | | Opportunities | Discovery completed | SQL × qualification rate | | Pipeline | Weighted opportunity value | 3-4x quota coverage | | Meetings Booked | First meetings scheduled | Based on rep capacity | | Proposals Sent | Active evaluations | Based on demo-to-proposal rate |
Lagging Indicators (Results)
| Metric | Definition | B2B SaaS Benchmark | |--------|------------|-------------------| | Win Rate | Won ÷ (Won + Lost) | 20-30% | | Sales Cycle | Qualified to Close | 30-90 days (SMB), 90-180 days (Enterprise) | | ACV | Average contract value | Varies | | CAC | Total S&M ÷ New customers | < 1/3 LTV | | LTV:CAC | Customer lifetime value ÷ CAC | > 3:1 | | CAC Payback | Months to recover CAC | < 12 months |
Conversion Rate Benchmarks
| Stage | Benchmark Range | |-------|-----------------| | Visitor to Lead | 1-5% | | Lead to MQL | 10-30% | | MQL to SQL | 15-30% | | SQL to Opportunity | 40-60% | | Opportunity to Win | 20-30% |
Overall Funnel:
- Top of funnel to customer: 0.5-2%
- Outbound response rate: 1-5%
- Cold email reply rate: 3-10%
- Cold call connection rate: 10-20%
Sales Capacity Model
Target Revenue: $X
÷ ACV: $Y
= Deals Needed: N
Deals Needed ÷ Win Rate (25%) = Opportunities Needed
Opportunities ÷ SQL→Opp Rate (50%) = SQLs Needed
SQLs ÷ MQL→SQL Rate (20%) = MQLs Needed
For Rep Planning:
Quota/Rep = $X (typically 4-5x OTE)
Target Revenue ÷ Quota = Reps Needed
Ramp time = 3-6 months to productivity
Activity Metrics (by Role)
SDR Metrics
| Metric | Daily | Weekly | Monthly | |--------|-------|--------|---------| | Emails sent | 50-100 | 250-500 | 1,000-2,000 | | Calls made | 40-80 | 200-400 | 800-1,600 | | LinkedIn touches | 20-40 | 100-200 | 400-800 | | Meetings booked | 0.5-1 | 3-5 | 15-20 |
AE Metrics
| Metric | Weekly | Monthly | Quarterly | |--------|--------|---------|-----------| | Discovery calls | 8-12 | 35-50 | 100-150 | | Demos | 5-8 | 20-30 | 60-90 | | Proposals | 3-5 | 12-20 | 35-60 | | Closes | 1-2 | 4-8 | 12-24 |
Pipeline Health Metrics
| Metric | Formula | Target | |--------|---------|--------| | Coverage | Pipeline ÷ Quota | 3-4x | | Velocity | (Opps × Win Rate × ACV) ÷ Cycle | Trending up | | Age | Days in stage | Below threshold | | Progression | Opps moving forward | 20%+ weekly |
Pipeline Hygiene Rules:
- Close dead opps within 2x average cycle
- Update stage within 48 hours of change
- No opportunities without next step scheduled
Forecasting Framework
| Category | Definition | Weighting | |----------|------------|-----------| | Closed | Signed contract | 100% | | Commit | Verbal yes, paperwork in flight | 90% | | Best Case | Strong signal, proposal accepted | 50% | | Pipeline | Active, qualified opportunity | 25% | | Upside | Early stage, unqualified | 10% |
Forecast Formula:
Forecast = Σ(Opportunity Value × Stage Probability)
Revenue Metrics
| Metric | Formula | Why It Matters | |--------|---------|----------------| | MRR | Monthly recurring revenue | Base health | | ARR | MRR × 12 | Annual run rate | | Net New ARR | New + Expansion - Churn | True growth | | NRR | (Start + Expansion - Churn) ÷ Start | Customer health | | Gross Margin | (Revenue - COGS) ÷ Revenue | Unit economics |
Sales Efficiency Metrics
| Metric | Formula | Good | |--------|---------|------| | Magic Number | Net New ARR ÷ Prior S&M Spend | > 0.75 | | CAC Payback | CAC ÷ (ACV × Gross Margin) | < 12 mo | | Revenue/Rep | ARR ÷ Quota-carrying reps | > $500K | | Pipeline/Rep | Pipeline ÷ Reps | > 3x quota |