Sales Pitch

6 Key Sales Metrics Every Startup Must Watch

If you can understand sales metrics, you can increase your sales, share them with the team and increase your businesses’ revenue!

Monitor these 6 key sales metrics and watch your startup’s revenue grow

Every Startup tries out various sales and marketing efforts to grow revenue as much as possible, as soon as possible. However, without measurable and immediate feedback, it is difficult to figure out what’s working and what’s not. Sales metrics help you identify which marketing channels are performing well, which sources are generating high quality leads. Once you start regularly monitoring sales metrics, you can methodically improve them and your sales can grow.

Here are the 5 Key sales metrics every startup or small business should monitor regularly:

1. Lead Volume

Lead volume is simply the number of leads you got through various channels. You can track this metric every week or every month, and compare the lead volume with the previous week or month. This will tell you how it has grown over time due to your marketing efforts. You can also break out total lead volume into leads by each source to understand which sources are the most effective ways of generating leads. Also, it is important to track qualified leads instead of every lead. Qualified leads are the ones who have gone a step beyond contacting you and demonstrated some interest in buying your product (by signing up, requesting a quote, scheduling a demo, etc.).

2. Cost per Lead

Cost per lead is the cost you incur to get a lead. It includes investment of time, manpower, and capital expenditures (such as sponsorship cost for an event, salaries, benefits, etc.). For each source of leads, you can divide the total cost of generating qualified leads by the number of qualified leads generated. Measuring this for individual channel such as SEO, Social Media, Direct Marketing, Email Marketing, etc. is where interesting trends begin to emerge. You can see which channels have the highest ROI (Return on investment) and what efforts yield the most result.

3. Close Rate

Close Rate is the percentage of leads that convert to actual sales. You can track average close rate across your entire business to understand the overall direction of your business. You can also break it out by various channels/sources that you use to generate leads. Comparing close rate across channels enables you to see how effectively each source is generating qualified leads. Using it along with lead volume gives a clear idea of how each channel impacts your revenues.

4. Retention Rate

Retention Rate is the percentage of customers who continue to use your product or service after the initial sale. Do they renew subscriptions or provide repeat sales. How long do they stick around before they drop off? Higher the retention rate, the better it is. Monitoring retention rate by various sources helps you understand if the cost incurred to generate leads is worth it. E.g., a source of leads that has a lower conversion rate but higher retention rate is better than the source with higher conversion rate but lower retention rate. Else the churn in customers will make it difficult to grow revenues.

5. Average Sale Value

Average Sale Value is the average revenue per sale. For transaction based business like Ecommerce, it is the average value of transaction. Tracking average sale value lets you quantify the value of each lead and create marketing efforts accordingly. It is helpful to break out this number by each source so you can understand the effectiveness and efficiency of those channels. This also helps forecast sales, maintain inventory and allocate marketing expenses. If you combine it with other information such as the type of customer, attributes of the product or service you provide, etc. it can give you a better idea of customer behavior.

6. Time to Close

Time to close is the amount of time it takes you to move from the initial lead acquisition to closing the deal. It gives you an insight into how long your sales cycle generally is, and what steps you need to take to meet that average. You can also identify the steps taken when time to close is short and try to repeat it, or when it particularly long and identify such leads quickly. Such leads may have some specific requirements which you can proactively fulfill, early on in your sales cycle, to reduce time to close the sale.

Initially, you can create a simple sales performance dashboard to track these metrics, and share it with your team. Monitoring it daily/weekly will tell you how your marketing efforts are performing against your sales targets. You can add more metrics to it as your startup grows and you feel the need to track more information.


Growing Sales is a hustle which involves identifying potential customers and reaching out to them. However, tracking these metrics regularly helps you identify the factors responsible generating the highest overall lead, account, or transaction value over time. Such data-driven and immediate feedback enables you to direct your time and efforts to channels with proven and direct ROI.

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