METRICS AND PERFORMANCE 18 CHAPTER 1 MEASUREMENTS 02 Sales efficacy To understand the efficiency of the sales strategy and the productivity of the sales team, it might be useful to look at metrics related to sales efficiency. These metrics can help shine a light on whether the sales strategy is effective or not. Metric Description Formula Sales cycle Sales Cycle refers to time taken to sign a contract. Time from lead to close (usually depicted in months) Sales rep Sales Rep Performance is useful to show to understand performance each sales reps’ performance, both in terms of contracts n.a. signed and ACV, provides granular visibility of how the sales team is performing. Magic number Magic Number measures how much bang for the buck the ARR this period sales and marketing efforts have produced. Should match −ARR preceding period the sales cycle. Preceding period S&M WHAT GREAT LOOKS LIKE ▪ Magic number <0.50 = Suggests some areas need to be improved ▪ Magic number <0.75 = Decent ▪ Magic number >0.75 = Great