Sales Performance
Is it working?
An indicator is a signal that attention is required. You still need to think before acting. This page defines what good looks like, what to watch for, and what to do when the numbers move.
What Good Looks Like
| Metric | Healthy Range | Why This Range |
|---|---|---|
| Pipeline coverage | 3-4x quota | Below 3x and you're one lost deal from missing target |
| Win rate | >30% overall | Below 30% means qualification or pitch needs work |
| Sales cycle | <12 weeks (B2B SaaS) | Longer cycles = more cost per deal, more risk of no-decision |
| Forecast accuracy | Within 15% of actual | Wider variance = bad stage criteria or sandbagging |
| Response rate (outreach) | >15% | Below 15% = wrong ICP or generic messaging |
| Discovery calls/month | 5+ (early stage) | Fewer means pipeline will dry up in 60-90 days |
| CAC payback | <12 months | Longer payback = unsustainable unit economics |
| NRR | >100% | Below 100% means the bucket leaks faster than you fill it |
| Deal velocity | Increasing quarter over quarter | Flat or declining = process degrading or market shifting |
Core Metrics
Revenue Metrics
| Metric | Formula | Frequency |
|---|---|---|
| ARR | Sum of annualized recurring contracts | Monthly |
| MRR | ARR / 12 | Monthly |
| ACV | Contract value / contract years | Per deal |
| Revenue growth rate | (Current - Previous) / Previous | Monthly |
Pipeline Metrics
| Metric | Formula | Frequency |
|---|---|---|
| Pipeline value | Sum of (deal value x stage probability) | Weekly |
| Pipeline coverage | Pipeline value / quota | Weekly |
| Sales velocity | (Deals x Avg Value x Win Rate) / Avg Cycle | Monthly |
| Stage conversion rates | Deals advancing / deals entering stage | Monthly |
Efficiency Metrics
| Metric | Formula | Frequency |
|---|---|---|
| CAC | Total sales + marketing spend / new customers | Monthly |
| CLV | Avg Revenue per Customer x Avg Lifespan | Quarterly |
| CLV:CAC ratio | CLV / CAC; healthy = 3:1+ | Quarterly |
| CAC payback | CAC / (MRR x Gross Margin) | Monthly |
Engagement Metrics
| Metric | Target | Frequency |
|---|---|---|
| DAU / MAU ratio | Depends on product category | Weekly |
| Retention rate | Category-dependent | Monthly |
| Average spend per customer | Growing QoQ | Quarterly |
Warning Signals
Leading indicators that something is off. Catch these before they become revenue problems.
| Signal | What You See | What It Means | Response Time |
|---|---|---|---|
Pipeline coverage <2x | Fewer deals than needed at every stage | Revenue miss in 60-90 days | This week |
| Win rate declining 2+ months | Same effort, fewer closes | Pitch, qualification, or market fit drifting | This month |
| Avg deal age increasing | Deals sitting longer at each stage | Buyers stalling — value prop unclear or timing wrong | This sprint |
| Discovery-to-qualified dropping | Prospects attend calls but don't engage further | Discovery quality poor or ICP mismatch | Next batch |
Response rate <10% | Outreach going out, nothing coming back | Message quality, channel, or ICP problem | This week |
| Single-threaded deals | Every deal depends on one contact | One person leaves and the deal dies | Per deal |
| Commit keeps slipping | "Closing this month" moves to next month repeatedly | Weak qualification or no mutual action plan | Immediately |
| High activity, low conversion | Reps busy but pipeline not growing | Effort on wrong activities or wrong prospects | This week |
Alerts
Triggers that require immediate response.
| Alert | Trigger Condition | Who Acts | Escalation |
|---|---|---|---|
| Pipeline emergency | Coverage drops below 1.5x quota | Sales lead + SDR | All hands on lead gen; pause non-pipeline work |
| Deal aging | Any deal in same stage >2x target duration | Deal owner | Review with sales lead; advance or kill |
| Forecast miss | Monthly actuals >25% below forecast | Sales lead | Root cause analysis; update forecast method |
| Churn spike | NRR drops below 90% in any month | CS + Sales lead | Customer health review; escalation calls |
| Rep productivity | Any rep <50% of team average for 2+ weeks | Sales lead | Coaching session; identify blocker |
Required Decision Flows
Key decisions, who decides, what data they need, and what happens next.
Pursue / Nurture / Disqualify
New Lead Enters
↓
ICP Fit Score (AI)
↓
≥ 70% → PURSUE → Assign AE, book discovery
40-70% → NURTURE → Add to drip, re-score in 30 days
< 40% → DISQUALIFY → Log reason, update ICP learnings
Who: SDR (scoring), Sales lead (edge cases) Data: ICP fit score, firmographics, engagement signals Cadence: Within 24 hours of lead entry
Propose / Hold
Discovery Complete
↓
Pain confirmed? + Budget signal? + Decision maker engaged?
↓
All YES → PROPOSE → Build proposal, set timeline
Any NO → HOLD → Identify gap, schedule next action to close gap
Who: AE Data: Discovery notes, stakeholder map, budget signals
Discount / Hold Price
Discount Request
↓
Is this a qualified objection or a negotiation tactic?
↓
Qualified (budget genuinely constrained) → Discount up to X% with approval
Tactic (testing floor) → Hold price, reframe value
Who: AE (up to 10%), Sales lead (10-20%), Founder (>20%)
Data: Deal size, CLV projection, competitive intel
Kill / Revive
Deal stalled > 2x stage duration
↓
Contact responds to "still interested" ping?
↓
YES → REVIVE → Reset timeline, re-qualify
NO → KILL → Move to lost, capture reason, nurture list
Who: AE, reviewed weekly with sales lead Data: Last activity date, stage duration, engagement history
Context
- Funnel Engineering — Stage metrics and bottleneck diagnosis
- Sales Principles — Value creation, essential data, glossary
- Evaluate Sales Reps — Rep-level performance
- Average Spend Per Customer — Revenue per customer
Questions
What is the earliest leading indicator that a sales team is about to miss quota — and can it be detected before pipeline coverage drops?