Mastering Sales Performance: Essential Metrics for Distributors

Tracking sales performance metrics is critical for distributors aiming for robust revenue growth. These metrics can help you better understand your sales funnel and monthly recurring revenue if applicable, as well as your customer acquisition costs and customer lifetime value.

(See how a CRM for distributors with built-in business intelligence makes it easier to track sales performance.)

However, there’s a huge roadblock: The majority of sales leaders lack the ability to track sales metrics in real time.

The metrics that measure sales performance are often siloed into two systems. Product and purchase data live in an enterprise resource planning (ERP) system, while your sales pipeline and sales productivity metrics live in a customer relationship management (CRM) system. This makes it difficult to get a holistic view of sales performance across all channels, and to readily understand which products are most profitable, which sales reps came closest to achieving their sales goals, and which customers have low sales.

Connecting the dots between systems can increase sales productivity while boosting customer lifetime value. Here’s how your distribution sales team can zero in on the most essential metrics so you can master sales performance.

Understanding Sales Performance Metrics

Tracking overall revenue growth is a no-brainer for any distributor. But does your sales team track other meaningful metrics that lead to sustainable year-over-year growth?

Knowing your key sales performance metrics paves the way. Sales teams can uncover important business activity that leads to a better bottom line. For example, by pinpointing stalled sales, your sales reps can improve customer retention rate. Additionally, key metrics can help sales teams identify slow-moving inventory that could be dragging down revenue.

To spot these opportunities and more, here are four sales performance metrics to track.

1. Overall Sales and Profitability

When your sales and purchasing data live across disparate systems, it’s not always easy to see a holistic view of sales and profit performance across all channels for a given month. You might track online sales and profitability in one system, orders generated through inside sales/customer service in your ERP, and outside sales using a CRM or some other database.

Ideally, you should be able to easily see a global breakdown of sales and profit across all channels from a single dashboard, without having to log into multiple systems.

2. Total sales vs. goal

Are your reps hitting their sales targets? The easiest way to know is by looking at their total sales compared to their goal. Total sales is a snapshot of current sales captured over a specific period of time. A goal takes that historical sales data plus the current pending sales pipeline to create sales forecasts. These forecasts are measured monthly, quarterly or annually, and are key performance indicators of whether your company is meeting revenue targets.

(White Cup’s dashboard shows total sales compared to the goal, giving sales leaders a better idea of win rate when tracking sales metrics.)

3. Sales performance for each rep

Some organizations focus on sales activity metrics, such as the number of sales calls and emails, while others look more at outcome metrics, such as total bookings and quota attainment.

While having visibility into sales productivity metrics can be helpful, it shouldn’t be the main focus for a sales manager. Sales leaders should look at the bigger picture when it comes to performance, focusing on the ultimate outcome and identifying coaching opportunities. Sales professionals don’t want to be micromanaged, and if they believe your investment in a CRM is primarily about monitoring sales activities, they’re going to resist using it.

Of course, individual sales productivity data is still important. These activity-based metrics are leading indicators of monthly revenue, and they can help you make adjustments as needed — such as prioritizing existing customers or providing additional training to a sales team member. Having visibility into sales activities also affects future hand-offs to new team members. If a sales rep suddenly leaves, having their full activity history will ease the transition for new team members.

(White Cup’s sales rep scorecard shows sales for each rep compared to the goal, a good indicator of total monthly revenue.)

4. New customer conversions

Looking at new customers you’ve gained over the past month will give your team a better idea of whether your sales and marketing efforts are effective and your expenses and customer acquisition cost (CAC) is reasonable. It also gives you insight into average deal size and win rate when you consider how many new accounts your team targeted over the past month and how many deals actually closed.

Understanding your largest new customers helps your team prioritize as well so you can turn those customers into loyal brand ambassadors.

5. Profit percentage from top customers

Sales leaders who are aware of the most profitable customers can empower their reps to refine sales processes, boosting customer lifetime value (CLV). This is another one of the key sales metrics your entire team should be able to see at a glance — ideally in a dashboard.

6. Customers with the largest override profit loss

Even with effective sales processes and strong customer retention, your company could be losing money if your sales team is giving too many discounts to existing customers. That’s why a list of customers with the largest profit loss from pricing overrides is valuable as you track sales metrics.

7. Online vs. offline sales

To increase overall sales revenue, it’s important to differentiate between offline and online sales with an eCommerce/CRM integration. Without this seamless integration, you’ll miss opportunities such as following up online abandoned carts with personalized guidance from a sales rep to close complex purchases. When you know the balance of online compared to offline sales, you can tailor your sales strategies appropriately.

See what other sales analytics you should be tracking in this key metrics guide.

Technologies for Tracking Sales Performance

Now that you know which sales metrics to track, how should your team track them?

Many distributors rely on ERP systems to operate, and some of these have built-in solutions for business intelligence (BI) and sales performance. But BI tools like Epicor P21 and Microsoft’s PowerBI have limitations. They’re complex to use, may have performance issues with large data sets, and have limited customization. They also don’t offer enough detail for measuring sales performance.

A CRM with built-in business intelligence and integration with your ERP is one of the most effective solutions for sales teams to make data-driven decisions.

Because it pulls in all the data you need in a format that’s easy for your team to understand, your team will spend a lot less time compiling custom reports and more time acting on the data.

BI Dashboards: Your Window to Tracking Revenue

Real-time BI dashboards give full visibility into your most important sales metrics and performance. This allows sales professionals to see and track sales data with simple dashboards rather than spreadsheets. Each chart or graph can help you spot trends and make key business decisions. A good BI tool will show key sales performance metrics at a glance, such as percent of sales below company goals, open orders and late orders, top 10 customers, customers with low sales in the last month, the sales budget, and more.

How a CRM for Distributors Enhances Sales Performance

CRM software acts as a centralized, transparent hub for tracking and improving sales performance in many ways. Through comprehensive customer scorecards, sales reps can track individual customer interactions, preferences, and transaction history. This allows them to anticipate customer needs, leading to enhanced customer satisfaction and retention.

With a complete picture of each customer and insight into purchasing trends, sales reps can be proactive. They can anticipate upsells to related products, prepare for new client conversations, and reach out to current customers with open orders or late shipments. It would be a full-time job to manually collate this data every day. A CRM frees up a sales rep’s productivity to focus on what they do best: sell.

The best CRM software also simplifies sales performance measurement so sales leaders can focus on identifying new sales opportunities and improving win rate, rather than trying to evaluate effectiveness from a long list of sales activities.

Closing deals faster

Automated workflows in CRM systems streamline the sales process. A CRM will notify the sales rep of pending actions to help them manage client communications, which significantly improves overall sales efficiency. Next, a CRM can automate those tasks like scheduling follow-up calls with prospects and sending emails, reducing the time taken to close deals.

Fostering a culture of collaboration

Think of a CRM like the central nervous system: It shares vital information to keep the whole system informed and reacting appropriately to its environment. Shared customer data can be analyzed across departments, enabling better collaboration between marketers and salespeople. This leads to more effective marketing campaigns, targeted lead generation, and improved customer support, all driven by shared insights.

Improving relationships with vendors or suppliers

By integrating CRM software with a comprehensive BI solution, distributors gain valuable insights into customer preferences and product performance. Distributors can use this information to collaborate more effectively with vendors and suppliers, ensuring product availability, optimized inventory management, and a more efficient supply chain. Equipped with real-time insights, teams can swiftly adapt to supply and demand fluctuations. Identifying a surge in demand for a specific product triggers communication with the manufacturer to adjust production. This proactive approach prevents stockouts so both vendors and distributors avoid lost sales.

More accurate sales forecasting

CRM software offers real-time data analysis, providing a clear view of the sales cycle. Leading solutions also use AI and historical data to generate more accurate sales forecasting, helping businesses effectively plan and adapt to market changes.

Some distributors sell highly customized solutions, so their average sales cycle length is much longer. It may be months before they see revenue from a deal in the works.

Combining historical data with real-time online browsing data and cart abandonment rates allows a distributor to better identify interest in products and adjust their inventory and sales strategy.

Enhanced sales performance management

CRM systems include tools for monitoring and managing sales performance, such as scorecards and key performance indicator (KPI) tracking.

To get the most out of your CRM, make sure it integrates with your existing software solutions such as your ERP, eCommerce platform, and business intelligence tool. This gives a comprehensive view into all the insights distributors need to enhance sales performance.

Practical Steps To Improve Sales Performance

By tracking and analyzing sales metrics, you can begin positively influencing sales performance. Your company will have a competitive edge when you continuously monitor and shift your strategies and actions based on current data. Here are a few practical ideas to get you started:

• Track a balanced mix of sales activity metrics (emails sent) and outcome metrics (sales quota and win rate) for each sales rep
• Look at leading and lagging indicators, such as customers who have ordered significantly more or less frequently over a certain time frame
• Regularly review sales performance with your team, and use that time to identify your best opportunities for growth
• Use AI to reduce the time your team spends on manual data analysis and to determine your next best actions, such as recommending top related products to customers based on their past order history
• Train your team on important sales skills, including increasing their familiarity with new technology

Setting realistic sales goals

Data-driven insights empower sales leaders to set ambitious yet achievable sales goals. These goals consider historical performance, seasonality, industry benchmarks, and current market conditions. Striking a balance between motivation and attainability is key to fostering team morale and buy-in. Try using SMART (Specific, Measurable, Achievable, Relevant, and Time-bound) goals for your sales team so they’re realistic and concrete.

Training and supporting sales teams

Sales managers who track key sales metrics can proactively identify coaching and development opportunities for their teams. Spotting performance gaps leads to more effective employees and a smoother sales process. For example, if a sales rep is doing well generating leads but has a low conversion rate, it might indicate a need for improvement in closing techniques.

Aligning sales and marketing strategies with data insights

Once the foundation of a CRM and BI tool is in place, the next step is to turn that raw data into actionable insights. Adapting sales strategies based on metric analysis leads to better outcomes. This analysis can reveal opportunities like segmenting your customer base based on buying behaviors or identifying products with consistently low sales. When data informs your sales approach, it ultimately drives revenue growth.

Make Sales Metrics Actionable With AI

Artificial intelligence (AI) integrated with a CRM is a powerful sales ally. White Cup’s new AI features empower distributors to identify the next best actions for your sales team, including which products to recommend to specific customers and when customers are likely to reorder based on their buying history.

Your sales team can easily add these recommendations to emails or quotes to maximize upselling. They can receive notifications to remind customers to reorder, and they can recommend slow-moving inventory to customers most likely to buy it.

You could invest in several different sales tools to track performance and additional tools to execute sales and marketing strategies, or you could implement one solution that does it all. If you’re ready to reinvigorate sales, schedule a consultation to get a closer look.