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Sales metrics are essential for startup founders and sales leaders to gauge business momentum and efficiency. They can help identify indicators of success and areas for improvement and also play a crucial role in fundraising by helping investors assess a company’s scalability.
For early-stage startups lacking dedicated sales ops team members and resources, maintaining and extracting consistent metrics from sales data can be challenging. It’s essential to build an effective framework that prioritizes metric calculation frequency and streamlining processes to minimize manual work.
“The combination of the right foundational sales metrics coupled with how to most easily execute with data and tools, provides founders with a powerful integrated and initial point of view to ground and guide first sales efforts”, comments Mark Little, Former Intuit and Toast GTM executive.
This guide offers suggestions for managing metrics in early-stage startups and delves into key recommended metrics.
Effectively Measuring Sales Metrics and Managing Sales Data
Founder-Led Sales
Founders personally handling the sales process should prioritize flexibility, easy setup, maintenance, and cost-effectiveness in managing sales data and metrics. For founders who prefer to start with spreadsheet-like applications, Airtable and Google Sheets are two of the most flexible tools to put together a simple sales pipeline, build quick dashboards, and calculate key sales metrics.
From our experience supporting early-stage founders with GTM enablement, we have found that Airtable has an edge over Google Sheets due to:
- Ease of setting up different field types, e.g. multiple select for drop-down menus
- Using Interfaces or Extensions to build sales metrics dashboards and calculate sales metrics
- Basic automation, e.g. email / Slack alerts
For founders who have prior experience with CRM platforms or would like additional out-of-the-box functionality, HubSpot’s free tier is an excellent choice. It covers essential features like lead tracking, deal, and contacts management, along with metrics dashboards. Teams may transition to paid tiers as their needs evolve for additional custom CRM objects, sales email templates, and advanced dashboards. Beginning with a CRM platform from the start eliminates the need for later data migration and streamlines the onboarding process for sales reps.
Early Sales Team
When founders hire their initial sales team, it prompts a reevaluation of the sales data structure and tech stack. Early reps may suggest their preferred CRM, but we’ve seen that teams with fewer than five members generally have a better experience with HubSpot. HubSpot’s Starter and Professional plans offer a cohesive experience, especially if the marketing team also uses HubSpot as their marketing automation platform. HubSpot’s dashboards can perform sales metric calculations, but advanced reporting requires upgrading to the Professional plan.
Reliably calculating sales metrics requires teams to have high data integrity across their sales systems. This is a consistent challenge we see across early-stage startups as teams are moving and iterating extremely quickly. Teams can proactively manage their data cleanliness by:
- Mapping out data fields and planning out their data structure, especially when migrating to a new CRM
- Setting validation rules for CRM data fields to help sales reps standardize their data inputs
- Leveraging automation across data sources and systems
Looking ahead, we’re monitoring the evolution of Apollo.io’s CRM features. Their sales enablement suite, covering data enrichment, outreach, and conversational AI, could be valuable when integrated with a more robust CRM featuring reporting capabilities. We believe this combination holds promise for effectively handling sales data and metrics in early-stage teams.
What to Measure?
Once sales data and systems are established, the challenge for an early-stage startup is selecting which sales metrics to measure.
To fully utilize the insights from these metrics and drive high performance, Mark Little suggests two ways to best optimize them:
“First, ensure you install solid ‘operating mechanisms’ along with these metrics with the right cadence to rapidly iterate. Simply put, nothing beats the efficacy of weekly 1:1s with each rep coupled with solid weekly/monthly team sessions focused on the right leading and lagging indicators. Do your reps have enough leads and demos to fuel their performance? Do you know what’s driving different conversion rates across your team and can the practices of your top performers be captured, codified, and conveyed to the others quickly to lift overall performance?
Second, many of these metrics are best assessed daily/weekly/monthly versus monthly/quarterly to smartly fine-tune meaningful analysis and associated actioning”.
Alignment between founders and sales teams on chosen metrics is crucial. Translating insights from these metrics into actionable improvements for the sales process, team development, and overall strategy is key to driving long-term value. Below, we break down our four recommendations for key metrics and how to benchmark them:
- Sales Pipeline: Pipeline conversion and health
- Growth Momentum: Pace of top-line growth from new and expansion revenue
- Efficiency of GTM Investment: General sales efficiency and unit economics
- Sales Team Performance: Performance of quota-carrying sales reps and their efficiency
Key Sales Metrics:
1. Sales Pipeline: These formulas relate to your sales pipeline conversion and health.
2. Growth Momentum: These describe the pace of top-line growth from new and expansion revenue.
3. Efficiency of GTM Investment: This section covers general sales efficiency and unit economics.
4. Sales Team Performance: These formulas track the performance of quota-carrying sales reps and their efficiency.
Conclusion
Note to founders and early sales team: this article does not include the extensive list of foundational KPIs that factor into the sales metrics below, e.g. churn, average selling price, and customer count. Please reach out to us if you would like to have an extended conversation to talk through the formulas’ constituents.
