Few people start a venture with an understanding of sales metrics for small businesses. They usually do it because they believe in their product or service. But it’s these sales metrics that can decide the fate of the business.

The problem is compounded if you have no experience in finance. But that doesn’t mean that small business sales metrics are difficult to understand. By focusing on the right metrics, you’ll have a better idea of the financial health of your business.

What do we mean by ‘sales metrics’?

Sales metrics reveal the effectiveness of your sales strategies and tactics. In other words, small business sales metrics measure your sales. With the help of these metrics, you can increase sales and maximise profits.

An analysis of sales metrics will reveal areas you may not have addressed before. By studying the sales pipeline, you’ll have a better understanding of what needs to be improved and what can be sidelined.

Improving your performance with sales analytics

Do you know how long it takes for you to generate leads? Or the number of qualified leads in your sales pipeline? Or whether your team is meeting a viable target of prospects every month or quarter? Sales metrics will help you analyse these.

The findings will tell you where your business has to focus. Maybe you have to improve your outreach or maybe your follow-up calls or emails have to be more convincing. Or maybe you’re focusing on the wrong targets.

Sales metrics for small businesses will help you optimise your sales process by giving data in real-time. Now you will know where you have problems, where you have opportunities, and how you can get more out of every sales conversation.

Types of sales metrics

Pipeline or sales funnel

These show how many prospects are moving through your sales funnel. These include open rates, win rates, close rates, opportunity to win rate, average deal size, deal close rates, annual contract value and the total value of sales among others.

Sales activity

Everything from the number of calls to scheduled meetings and attended events is measured under this. It would also track the number of proposals your team have sent and the number of meetings that have happened because of calls.

Conversion

How good are you at closing deals? Conversion metrics will show you that. It will reveal the number of orders you get in a month and the average revenue from each order. You’ll also know your total revenue from a customer or deal through these metrics.

Lead generation

Is your marketing generating enough leads for your sales teams to chase? Analyse that with lead generation metrics and you’ll know whether you have to tweak your marketing tactics.

KPIs

Every small business needs to set benchmarks for its sales teams. By using a KPI or key performance indicator, you will know whether your team is meeting these targets.

What are the ‘right’ sales metrics to track?

Depending on the business you’re in, the following sales metrics should be of interest to you.

Average close rate: If you’re in the B2B sector, this will show you how many deals you close, based on the overall number of leads that come your way.
Average sale price: An indicator of the quality of your deals, this metric tells you the average price you get per deal.
Customer acquisition cost: Divide the number of customers you get by the total marketing budget to arrive at your customer acquisition cost, which will reveal the effectiveness of your marketing strategy.
Profit margin: To succeed, small businesses need a good profit margin. Divide your gross profit by revenue and express it as a per cent to find your profit margin.
Customer retention rate: Hugely important for both B2B and B2C, this metric shows the percentage of customers who stay with a business at the end of a specific period.

In sales metrics, start small

If it’s your first time tracking small business sales metrics, things can become overwhelming. The solution is to start small and slow. Pick one or two metrics that are relevant to your category, business and stage of growth.

Measure that data consistently and start improving on those areas. Slowly, you can start incorporating other sales metrics for small businesses.

Chalkboard: Build customer relationships with your business number

If you want to improve your customer retention rate and increase your average sales price, you need to engage better with your customers. One of the best second phone number apps, Chalkboard has been designed for better communication and automated marketing. Chalkboard’s advanced chat feature lets you talk to your customers like friends.

Download Chalkboard today and start your free trial. It’s the most cost-effective way to improve sales metrics for small businesses.