Success in B2B sales isn’t just about closing deals, but also about understanding the key performance indicators (KPIs) that lead to victory.
In our comprehensive blog post, we will unveil the most crucial and insightful metrics that will help you hone your B2B sales process, identify areas of improvement, and ultimately, secure a winning position in the market, among other businesses.
Importance of measuring success in B2B sales teams
Once upon a time, in a highly competitive market, there was a B2B sales team that struggled to keep up with its rivals.
The team’s leader, Mary, realized the urgent need to reevaluate their strategy and find a way to surge ahead. Mary understood that to truly transform her team, they needed a clear vision of success.
Does it sound like your company, your struggles, and your everyday challenges with B2B buyers?
If so, you’re not alone.
Like Mary, many leaders grapple with the complexities of measuring success in B2B sales operations.
But having embraced the power of a new gold – data – Mary was able to guide her sales and marketing teams towards a brighter future of B2B sales. As they diligently tracked their performance, the sales team gained valuable insights, refined their tactics, and celebrated hard-earned milestones with new, potential solutions for sales enablement.
Through this B2B sales journey, Mary’s team transformed from underdogs to trailblazers, all because they understood the importance of measuring success. And just like Mary, you too can lead your team towards new horizons by recognizing the power of tracking progress and celebrating every victory along the way.
Overview of key B2B sales metrics
Selling to B2B buyers is significantly different compared to B2C sales. This reflects in many things, but primarily in the wide range of metrics you should track across the B2B sales cycle.
#1 Revenue Metrics
Revenue metrics are important for sales managers who, simply, want to know how much their companies are making – and what to do to increase it over time.
#1.1 Total Revenue
Total Revenue is the cumulative income generated from the sales of products or services during a specific time period.
Why is it important to track total revenue?
Tracking total revenue helps B2B sales measure their overall financial performance, set goals, and identify areas for improvement – but it also comes with other benefits, like determining the effectiveness of marketing efforts and evaluating individual performance.
How to calculate Total Revenue?
Total revenue = (average price per units/services sold) x (number of units/services sold)
B2B Sales Real-life example
A company sold 100 packages of services for $10k each. Their total revenue for that period was $1 million.
#1.2 Revenue Growth
Revenue Growth is the percentage increase or decrease in a company’s revenue over a specific time period, compared to a previous period.
Why is it important to track Revenue Growth?
Monitoring revenue growth allows teams to gauge the effectiveness of their sales strategies, identify trends, and make data-driven decisions for future growth. It also helps in understanding market conditions and evaluating the success of marketing campaigns with B2B buyers.
How to calculate Revenue Growth?
Revenue Growth = (Current Period Revenue – Previous Period Revenue) / Previous Period Revenue
Real-life example
A SaaS company’s revenue increased from $800,000 in Q1 to $1 million in Q2. Their revenue growth from Q1 to Q2 was 25%.
#1.3 Average Deal Size
Average Deal Size is the average value of each closed sale, calculated by dividing the total revenue by the number of deals closed during a specific time period.
Why is it important to track Average Deal Size?
Tracking average deal size helps sales teams understand the value of their offerings, identify potential upselling or cross-selling opportunities, and optimize sales efforts to focus on deals with higher potential returns.
How to calculate the Average Deal Size?
Average Deal Size = Total Revenue / Number of Closed Deals
B2B Sales Real-life example
A B2B company closed 50 deals worth a total of $500,000 during a quarter. The average deal size for that quarter was $10,000.
#2 Conversion Metrics
This might depend on how your sales funnel is built – whether you need to obey to longer sales cycles, use inbound marketing, or align sales with market research. In principle, though, conversion metrics are the ones that might matter the most for the B2B sales process.
#2.1 Lead Conversion Rate
Lead Conversion Rate is the percentage of leads that convert into opportunities or customers over a specific time period.
Why is it important to track Lead Conversion Rate?
Tracking the lead conversion rate helps sales teams assess the effectiveness of their lead generation and qualification processes, identify bottlenecks, and optimize sales and marketing for higher conversions.
How to calculate the Lead Conversion Rate?
Lead Conversion Rate = (Number of Converted Leads / Total Number of Leads) x 100%
B2B Sales Real-life example
A B2B company generated 1,000 leads in a month, out of which 200 converted into opportunities. Their lead conversion rate for that month was 20%.
#2.2 Opportunity Conversion Rate
Opportunity Conversion Rate is the percentage of sales opportunities that result in a closed deal within a specific time period.
Why is it important to track Opportunity Conversion Rate?
Monitoring opportunity conversion rates allows sales teams to evaluate the effectiveness of their sales process, identify areas for improvement, and optimize their sales strategies to close more deals.
How to calculate the Opportunity Conversion Rate?
Opportunity Conversion Rate = (Number of Closed Deals / Total Number of Sales Opportunities) x 100%
B2B Sales Real-life example
A company had 100 sales opportunities in a quarter and closed 25 deals. Their opportunity conversion rate for that quarter was 25%.
#2.3 Sales Cycle Length
Sales Cycle Length is the average time it takes for a lead to move through the entire sales process, from initial contact to closing the deal.
Why is it important to track Sales Cycle Length?
Understanding sales cycle length helps sales teams identify inefficiencies in their sales process, optimize their sales performance, and forecast revenue more accurately. It’s crucial to understand who in your B2B customers makes the purchasing decisions and why the sales cycle is getting dragged out.
How to calculate the Sales Cycles Length?
Sales Cycle Length = Total Days to Close All Deals / Number of Closed Deals or by measuring the time between each stage in the sales pipeline
B2B sales Real-life example
A B2B company closed 10 deals in a month, with a total of 200 days spent on doing so. Their average sales cycle length for that month was 20 days.
#3 Pipeline Metrics
In B2B sales strategy, what really matters is not only the outcome but also “how to get there”. This is where pipelines come into play for account-based sales and business-to-consumer sales as well since the sales process can be therefore extended.
#3.1 Number of Qualified Leads
The number of Qualified Leads is the total count of leads that meet specific criteria, making them likely to convert into customers.
Why is it important to track the Number of Qualified Leads?
Tracking the number of qualified B2B leads helps sales reps focus on high-potential prospects, allocate resources to the B2B sales process effectively, and improve overall sales techniques.
How to calculate the Number of Qualified Leads?
Number of Qualified Leads = Total count of leads that meet predefined qualification criteria
B2B Sales Real-life example
A B2B company generated 500 leads in a month, out of which 150 met their qualification criteria. The number of qualified leads for that month was 150.
#3.2 Pipeline Velocity
Pipeline Velocity is a measure of how quickly leads move through the sales pipeline and convert into paying customers.
Why is it important to track Pipeline Velocity?
Tracking pipeline velocity helps sales teams identify bottlenecks in the sales process, optimize sales strategies, and forecast revenue more accurately.
This is extremely important in e.g., long sales cycles with multiple decision makers involved when further research should be applied.
How to calculate Pipeline Velocity?
Pipeline Velocity = (Number of Qualified Leads x Conversion Rate x Average Deal Size) / Sales Cycles Length
B2B Sales Real-life example
A company has 200 qualified leads, a 0.25 (i.e., 25%) conversion rate, an average deal size of $10,000, and an average sales cycle length of 25 days. Their pipeline velocity is 200.
#3.3 Sales Forecast Accuracy
Sales Forecast Accuracy is the percentage difference between the actual sales revenue and the forecasted sales revenue within a specific time period.
Why is it important to track Sales Forecast Accuracy?
Monitoring sales forecast accuracy helps sales professional teams assess the effectiveness of their forecasting methods, improve future buyer journeys, and make informed business decisions.
How to calculate the Sales Forecast Accuracy?
Sales Forecast Accuracy = (1 – Absolute difference between Actual Sales Revenue and Forecasted Sales Revenue / Actual Sales Revenue) x 100%
Real-life example
A B2B company forecasted $900,000 in sales for a quarter but actually achieved $1 million, i.e., a $100,000 difference. Their sales forecast accuracy for that quarter was 90%. In effective financial management, precise sales forecasting is crucial. Accurate predictions empower businesses to allocate resources efficiently, optimize budgeting, and ensure robust financial health. Many businesses opt for financial management software to automate and assign tasks, enabling accurate forecasting. There are even industry-specific solutions available for different niches, such as financial services accounting software.
#4 Customer Relationship Metrics
Sales processes often also entail building strong relations with your target buyers, prospect’s business, and other key people who make the purchase decision.
#4.1 Customer Acquisition Cost (CAC)
Customer Acquisition Cost (CAC) is the average amount of money spent on acquiring a new customer, including marketing, sales, and other related expenses.
Why is it important to track CAC?
Tracking CAC helps sales teams evaluate the cost-effectiveness of their customer acquisition efforts, optimize marketing and sales strategies, and allocate resources efficiently.
How to calculate CAC?
CAC = Total Marketing and Sales Expenses / Number of New Customers Acquired
Real-life example
A B2B company spent $100,000 on marketing, cold calling, direct mail, a company blog, and sales pitch efforts while acquiring 50 new customers. Their CAC for that period was $2,000.
#4.2 Customer Lifetime Value (CLTV)
Customer Lifetime Value (CLTV) is the total revenue a company can expect to generate from a customer during the entire duration of their relationship.
Why is it important to track CLTV?
Understanding CLTV helps companies identify the value of retaining customers, prioritize customer segments, and focus on strategies that foster long-term relationships.
How to calculate CLTV?
CLTV = Average Revenue per Customer x Average Customer Lifetime
B2B sales Real-life example
A company generates an average of $5,000 in revenue per customer and their average customer lifetime is 3 years, so the average CLTV is $15,000.
#4.3 Churn Rate
Churn Rate is the percentage of customers who cancel or do not renew their subscription within a specific time period.
Why is it important to track Churn Rate?
Monitoring churn rate helps sales teams identify issues with customer retention, improve customer satisfaction, and maintain a healthy recurring revenue stream.
How to calculate the Churn Rate?
Churn Rate = (Number of Customers Lost in a Period / Total Customers at the Beginning of the Period) x 100%
B2B Sales Real-life example
A SaaS company started the month with 500 customers but lost 30 by the end of the month with only 20 new ones joining. Their churn rate for that month was 2%.
#5 Sales Team Performance Metrics
Sales team performance metrics are essential tools for measuring the effectiveness and progress of your sales force. They can also be a good starting point for a SWOT analysis in your own sales department.
#5.1 Quota Attainment Rate
Quota Attainment Rate is the percentage of sales representatives who achieve or exceed their sales targets within a specific time period.
Why is it important to track Quota Attainment Rates?
Tracking quota attainment rates helps sales managers evaluate individual and team performance, identify coaching opportunities, and set realistic sales goals.
How to calculate the Quota Attainment Rate?
Quota Attainment Rate = (Number of Sales Reps Achieving or Exceeding Quota / Total Number of Sales Reps) x 100%
B2B Sales real-life example
Out of 20 sales professionals, “only” 15 of them achieved or exceeded their sales targets. The company’s quota attainment rate for that period was 75%.
#5.2 Sales Rep Productivity
Sales Representative Productivity is the average revenue generated by each sales representative within a specific time period.
Why is it important to track Sales Rep Productivity?
Monitoring sales representative productivity helps salespeople identify high and low performers, optimize B2B sales processes, and make a better impression on decision-makers.
For this purpose, managers can leverage the performance management software and understand each sales representative’s strengths and weaknesses.
How to calculate Sales Representative Productivity?
Sales Rep Productivity = Total Revenue Generated / Number of Sales Reps
B2B Sales Real-life example
A sales crew generated $1 million in revenue from 20 sales reps during a quarter. Their average sales representative productivity for that quarter was $50,000.
#5.3 Time Spent Selling
Time Spent Selling is the percentage of a sales rep’s time dedicated to selling activities, such as prospecting, meetings, and closing deals.
Why is it important to track Time Spent Selling?
Tracking time spent selling helps teams identify inefficiencies, minimize non-selling activities, and improve overall sales effectiveness.
How to calculate the Time Spent Selling?
Time Spent Selling = (Time Spent on Selling Activities / Total Working Time) x 100%
B2B Sales Real-life example
A sales representative spends 30 hours a week on selling activities and works a total of 40 hours a week. Their time spent selling is 75%.
Benefits of Tracking B2B Sales Metrics
Benefit 1: Improved Decision-Making
Insights received from B2B sales metrics enable sales leaders to:
- Optimize sales strategies
- Conducting better and own research
- Identify high-potential target segments
- Set realistic goals and objectives
Monitoring B2B sales metrics reveals the driving forces behind sales success and pinpoints aspects that need enhancement. This information enables businesses to grasp customer preferences that translate into better sales processes.
Benefit 2: Enhanced Sales Team Performance
Tracking B2B sales metrics allows salespeople to:
- Assess individual and team performance
- Provide targeted coaching and training
- Foster healthy competition among sales reps
- Improve B2B sales process and methodologies
- Recognize and reward top performers
B2B sales metrics can be therefore used for recognizing spectacular B2B salespeople for all parties involved.
It also applies to marketing. Determining the efficacy of marketing initiatives and channels is vital for honing spending and generating more leads. B2B sales process metrics enable businesses to recognize the most impactful marketing strategies, facilitating efficient resource allocation and boosting marketing ROI.
Benefit 3: Better Customer Retention
Focusing on customer relationship metrics can lead to:
- Improved customer satisfaction
- Increased customer loyalty
- Higher CLTV and recurring revenue
- Lower churn rates
- Enhanced brand reputation
Shortening sales cycles and accelerating pipeline velocity are critical objectives for the B2B sales process in many organizations.
Pinpointing bottlenecks and refining processes highlights areas of inefficiency and offers data-driven opportunities for growth toward customer retention.
Implementing Metrics in Your Sales Strategy
Choosing the Right Metrics For Business to Business Sales
Selecting the most relevant and actionable metrics for your business is essential for driving sales success. Consider the following factors when choosing the right metrics:
- Align with business goals and objectives
- Focus on metrics with a direct impact on revenue generation
- Consider industry benchmarks and best practices
- Balance both short-term and long-term metrics
By knowing what your prospective customers and buyers spend their resources on, your company sells more and sells better.
Setting Up a Tracking System in Marketing Teams
Establishing a robust tracking system ensures consistent and accurate data collection. Here are some key steps to setting up a tracking system:
- Utilize a CRM like Capsule CRM or sales analytics tool to automate data collection
- Define clear processes for data entry and updates
- Train sales and marketing teams on the importance of maintaining accurate data
- Establish a standardized reporting format to facilitate analysis
Multiple stakeholders from your target audience can extend the buying journey and take their sweet time to become your qualified lead.
Regularly Reviewing and Adjusting Metrics
Continuously reviewing and adjusting your sales metrics is crucial to maintain their relevance and effectiveness. Implement a regular review process that includes:
- Monthly or quarterly performance evaluations
- Annual sales strategy reviews
- Assessing the impact of changes in the market or industry
- Identifying new trends and opportunities for growth
Over to you, salespeople
Sounds scary? We feel ya.
And the biggest mistake you can make here is to start tracking all metrics at the same time. Instead of doing that – and instead of us just summing it all up – we’re leaving you with a handy checklist of seven B2B Sales Metrics that, in our opinion, you might want to follow.
- Lead conversion rate
- Average deal size
- Win rate
- Quota attainment
- Revenue growth
- Pipeline coverage
- Customer retention rate
And to help you out in improving many of these, you can use email deliverability services that Bouncer offers!
B2B Sales FAQ
What is B2B sales?
B2B sales, or business-to-business sales, involve transactions between businesses rather than between a business and an individual customer. It typically includes aligning sales and offering products or services to other companies or more customers.
What is the long sales cycle in B2B sales?
The sales cycles in the B2B sales process refer to the process that starts from identifying potential customers, nurturing leads, and ultimately closing deals, often with a sales tool. It usually involves multiple decision-makers and a longer buying process and buyer journey.
What are the key differences between B2B and B2C sales?
In B2B sales, transactions occur between businesses, have a longer sales cycle, have higher price points, and involve relationship building. B2C sales target individual customers and often have shorter sales cycles.
How can I improve my B2B sales strategy?
To improve your B2B sales strategy, identify your ideal customers, focus on their pain points, and align sales with marketing efforts. Use sales enablement tools, social selling, and email marketing to generate quality leads. Not quite sure about email marketing? Check out the reasons why you should try it.
What is a sales funnel in B2B sales?
A sales funnel is a visual representation of the buyer’s journey, showing the stages a prospect goes through from initial awareness to making a buying decision. It helps companies manage and optimize the sales process.
How can I identify decision-makers in B2B sales?
Identify decision-makers by researching target companies, using LinkedIn, Google search, company websites, and industry publications. Engage with prospects using social selling and direct outreach to build relationships and gather insights from other businesses.
What is the role of a sales manager in B2B sales?
A sales manager oversees the sales team, sets goals, impacts higher price points, and monitors performance. They coach sales professionals, refine sales strategies, and ensure the team focuses on qualified leads and target accounts.
What are the most effective B2B sales techniques?
Effective B2B sales methods include relationship building, value proposition articulation, consultative selling, social selling, and leveraging customer relationship management (CRM) tools for better prospect management.
How can I shorten the sales cycles in B2B sales?
Shorten the sales cycles by targeting the right audience, identifying pain points, providing valuable content, addressing objections early, and maintaining consistent communication with buying decision-makers throughout the buying process.
How can I generate more leads for B2B sales?
Generate more leads by optimizing your company’s online presence, using SEO, paid ads, content marketing, email marketing, and social selling. Participate in industry events and leverage your network to connect with potential customers.
How can I segment an email marketing list for B2B sales?
Segmenting an email marketing list helps target specific audiences effectively. Group your email address list based on factors like company size, industry, location, or job roles. Use tools to filter your business email address database, ensuring your campaigns match each segment’s needs and interests.