Think of each team as a little black box with inputs and outputs. In the example below, Sales resembles a black box with:

• Inputs: New pipeline (the dollar amount, # deals, and quality)
• Outputs: Wins (the dollar amount and # deals) and % of customers who fit the Ideal Customer Profile
  

Here are key metrics for analyzing the health of the sales black box:

Sales Team Metrics

• Sales rep metrics
• New ARR (TCV) per sales rep — the average performance
• New ARR (TCV) by sales rep — see the whole distribution
• Quota metrics
• Quota per sales rep — the target for the financial model (bookings forecast and commission). This is a key model assumption.
• % of Quota — the average performance, New ARR/Quota
• % of sales reps who make quota
• Quota / sales costs — is the quota target economically viable?
• Commission….
• Sales capacity metrics
• Amount of sales capacity — # reps x Quota
• Sales Capacity/Forecast (known as the coverage ratio) — <100% implies the forecast is unreasonable. > 120% implies inefficient sales.
• # ramped sales reps
• Sales rep ramp time
• Pipeline metrics
• Conversion rate
• Conversion time (average sales days)
• Amount of pipeline at beginning of quarter
• Amount of pipeline generated in the quarter

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