Sales targets, metrics and forecasting

Measuring and planning sales.

📖 Key ideas

Key sales metrics: leads, conversion rate, average deal size, sales cycle length and revenue.
Conversion rate is customers won divided by leads, as a percentage.
A sales funnel shows how many people drop off at each stage.
Forecasting estimates future sales from the pipeline and past results.
Customer acquisition cost (CAC) and customer lifetime value (CLV) show whether growth is profitable.

💡 Real-life example: Like a cricket run chase: the required run rate, wickets in hand and overs left tell you whether you are on track.

Conversion rateShare of leads that become customers

Sales funnelStages showing drop-off from lead to sale

CACCost to win one customer

CLVTotal value a customer brings over time