067: Tracking Success

Hey, 👋 Scott from The Sales Mastermind here.

Today’s edition only takes 3 minutes.

To actively grow, you need to know three things:

Where you are
Where you want to get to
A rough plan to bridge the two

Too many founders who sell have:

A limited view of where they are (beyond $$ in the bank)
No clarity on the desired outcome
No plan to bridge the gap

Today, we'll cover:

Key Business Metrics
Bare Minimum Sales Metrics
Where to start

I work as a fractional sales leader for businesses before they need someone full-time. Primarily with self-funded businesses where the founder believes net new sales are underperforming.

Most of the time, this belief is a gut feeling - because the founder has no data to back it up.

They tell me:

"I'm not trained in sales. I know someone else could be doing a better job." Or
"We hired this guy/gal, and they're closing, but I expect more." And sometimes
"We aren't growing fast enough. I need more."

Many founders don't know that my formal training is actually in management accounting. I am just as comfortable talking about KPIs and unit economics as discovery call scripts and deal strategy.

Therefore, early in my customer's journey, we always establish bare minimum sales metrics to back up the founder's gut feeling.

Key Business Metrics

Before sales metrics, let's start with two basic numbers. Around 60-80% of your gains will come from nailing the basics.

Two key business metrics to track (if you aren't already):

Revenue (monthly or annually)

This is the amount of new cash coming in the door monthly or annually.

Monthly is called MRR - Monthly Recurring Revenue. Annually, it is called ARR - Annual Run Rate.

If you aren't already - pick one and start tracking it. Better yet, track both.

Number of Customers

This is the number of unique paying customers. Each unique customer pays independently.

For example, assume Amazon USA and Amazon Australia buy from you. If you combine their purchasing into one invoice/payment, it's one customer. If each department/geography/location gets a different invoice/payment, it's two customers.

Bare Minimum Sales Metrics

With the basics sorted, it's time for Sales Metrics.

You'll also notice the metrics cascade down like your pipeline or funnel.

In this newsletter, I provide both theory (metric) and practical (rule of thumb) by recommending benchmarks per seller. Some assumptions for these benchmarks:

A sales cycle of less than 2 months
For subscription businesses, Average Contract Value (ACV) between $10,000-40,000 per year
For services businesses, Average Order Value (AOV) between $20,000-80,000 per deal

Suspects (Outbound Only)

This is the number of contacts you will target with your outbound efforts.

Why track it: This metric ensures you have enough contacts for the team to book outbound meetings consistently.

Rule of Thumb: Add ~300 suspects per rep per month

Leads (a.k.a Marketing Qualified Leads)

This is the number of people who have shown interest. They are pre-qualification. For outbound, Leads usually book a meeting. For inbound, Leads typically ask to be contacted.

Why Track it: Leads are the first time you interact positively with a potential buyer. Tracking this number provides a leading indicator for new revenue.

Rule of Thumb: ~70-80 per rep per month

Deals Created (a.k.a Sales Qualified Leads)

This is the number of new deals/opportunities added to the pipeline. The seller must qualify the Lead before creating a Deal.

Why Track it: A percentage of Deals eventually become revenue. Tracking this number is a leading indicator of new revenue in the short term (1 sales cycle).

Rule of Thumb: ~30-40 per rep per month

Final Stage Deals

This is the number of deals about to close.

Why Track it: Final stage deals are a lagging indicator that your sales process is working and a leading indicator that a seller is getting the right outcome for growth.

Rule of Thumb: 3-5 deals at any time per rep

Deals Won (month/quarter/year)

This is the number of deals that became new customers (usually defined by either contract signature, invoice paid, onboarding handover, or onboarding completed).

Why Track it: New customers is an excellent proxy for a growing business.

Rule of Thumb: 6-8 deals per month per rep

Value of Deals Won (month/quarter/year)

This is the collective revenue for all deals closed won in a given period.

Why Track it: This is the most vital metric to track on a lagging basis. It tells you if your sellers contribute relative to their cost in absolute dollar terms. It is also the key metric for revenue growth.

Rule of Thumb: ~45-90% of your reps annual OTE per month

Where to Start

Remember, to grow, we have to know where we are, where we want to get to, and a plan to bridge the gap.

The above metrics tell us where we are.

We then need to decide where we want to get to.

And finally, the metrics often indicate where in the process to focus on bridging the gap (i.e., do we need more Leads or more revenue per Deal closed-won?).

Now that you know, go start tracking what matters.

Are there any key metrics you track beyond the above? Why do you track it?

Until next week,
Scott Cowley

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Hi! It's The Sales Mastermind

067: Tracking Success

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073: Next Step Selling

072: Commanding Questions