5 sales metrics you should track to increase profitability


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Accurately tracking and regularly evaluating a set of tried and tested sales metrics is a surefire way to grow your business by increasing sales and profits. As a business tool, sales metrics offer numerous benefits:

  • Track performance of sales and marketing activities
  • Identify trends and fluctuations over time
  • Identify hero products/services
  • Generate more revenue per sale
  • Inform new vs. existing customer sales strategies


Most entrepreneurs are faced with a large volume of metrics and data. So this article is designed to help narrow the focus so that you only track the most important sales metrics, and can focus your precious time on managing the sales trends that directly determine your profitability.

Performance of sales / marketing

The volume of leads or inquiries you receive is a direct reflection of how well your sales and marketing activities are performing. A successful attraction strategy equals a high volume of leads.

However, you will need to determine which proportion of those inquiries result in sales and which do not – as a way of limiting the influx of low-quality leads.

Identifying sales by inquiries will enable you to determine which platform, campaigns, advertising or lead sources generate the most sales, thus allowing you to invest more time and budget into the right channels and campaigns.

Gaining a clear understanding of sales by inquiries is essential to ensure that management can identify any potential issues and address them in a timely fashion.

Trends over time

Possibly the most obvious but important metric to track is sales over time.

Businesses must be able to report on performance week on week, month on month and comparatively over each quarter and each year. This is essential in understanding how sales figures fluctuate across each period and whether your business is experiencing an expected dip (in line with identified trends) or whether something is going wrong in-house.

Sales figures over time enable you to track and monitor the performance of your sales team. Negative sales could mean that the team aren’t selling well enough, or that perhaps there are problems with your offering, such as price or payment terms.

Identify which variables may have affected your sales figures and work to rectify any changes that could be negatively impacting your bottom line. Only make one change at a time so that you can correctly identify what was causing the problem with sales.

Hero service or product

It is vital to find out which of your service offerings or products are selling well and which are not.

Understanding this will help focus more time, and invest more revenue, in the services or products that your clients love, and less on the ones that don’t generate sufficient return.

The benefits of tracking the performance of each service offering or product over time is that you can anticipate future demand to ensure you have the infrastructure to support new clients or increased orders.

This tracking also ensures that you can quickly spot declines in sales, giving you time to release special offers, make adjustments to offerings or release new products.

This is especially important when a large proportion of your sales come from just one or two services or products. When you rely so heavily on one specific area or item you must ensure that you are regularly tracking sales in order to futureproof your business.

Revenue per sale

By increasing the revenue per sale, you can directly increase profit. Simple. And by tracking revenue per sale you can identify areas of improvement over time.

Firstly, break down your revenue per sale by:

  • Percentage of new business
  • Percentage of upsell/cross-sell/expansion – existing clients who buy another product or upgrade a service
  • Percentage of renewal – clients who extend their contract for another month or year

Consider whether your strategy is to increase revenue per sale for new or existing clients. A different approach will be required for each.

For example, it’s easier to increase prices in line with your competition for new clients – it’s trickier and riskier to do so with existing ones.

If you choose to focus on increasing revenue per sale for existing clients, try upselling or cross-selling.

Your approach could simply involve recommending a new / different service to existing clients in line with a specific need they (or you) have identified. Be prepared to give reasons as to why the investment is worthwhile, supported with numbers.

It is said that McDonald’s doubled its profits when staff started asking, “Would you like fries with that?” They supposedly doubled profits again by asking, “Would you like to supersize that?”

New vs. returning customer sales

Successful business owners will understand what percentage of sales is coming from new versus returning customers. Every business should have a mixture of both.

It is possible to boost customer return rates by ensuring that your products or services are competitively priced, that you always practice exceptional customer service, and that you consistently deliver on your promises.

Increasing customer lifetime value and encouraging existing customers to make repeat purchases is easier than winning new clients, and can dramatically improve company profits.

Ensure that you have marketing strategies in place to introduce existing customers to new products or services. Most importantly, measure results per channel / campaign so that you know what is working.

In the end, one of the most important, non-financial sales metrics that an organisation should measure is customer satisfaction. Companies that strive to link non-financial measures with value creation stand a better chance of improving business profitability.

By understanding how sales are generated and where the majority of sales originate, business owners can better target their marketing and advertising efforts.

By effectively reporting on sales metrics, entrepreneurs can better manage fluctuations to futureproof the success of their business.