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4 Sales Funnel Metrics You Should Track to Grow Your Business

Post by
Yash Shah
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Most businesses need to have a proper understanding of what funnel metrics are. Using the correct conversion rate formula to track the client's journey from the initial stage to purchase can help convert leads into clients more quickly. Most business owners feel that sales funnel metrics are quite a difficult task. But here’s some good news – these marketing funnel metrics aren’t so complicated after all. They are relatively easy to calculate and also come with some fantastic benefits for your business.

Here, we’ve put together a helpful cheat sheet that guides you on everything you need to know about measuring funnel metrics.

Bonus Read: How to Use Content at Each Stage of a Sales Funnel?

Sales Funnel – The Definition

Let’s start with the basics – the sales funnel. Sales funnel is defined as the buying process of a potential client. Simply put – it’s a process to measure your client's journey. It’s how an individual finds out about your services, learns more, and finally decide to buy your services.

Now, measuring success in the sales funnel isn’t all about the client. It’s about you as well. Only when you understand the sales funnel, you can define and optimize the processes for identifying your potential clients.

For example, any sales funnel will have four stages of marketing funnel – awareness stage, interest stage, desire stage, and finally, action. Your sales funnel success depends on how strategically you help your clients through each stage until they eventually convert.

Understanding the Sales Funnel Metrics

The sales funnel metrics comprise of entrances, conversion rate, total sales, and average order value. Below you’ll get an understanding about what are funnel metrics and how to measure them.

Metric #1: Leads

Leads are the beginning of your sales funnel; it is one of the most essential top of funnel metrics you need to measure for the success of your business. A lead can be anyone who signs up to your newsletter, visit your website, directly reach out to you on your email, etc.

And while the number of leads entering the funnel is simple to track, it is more important to analyse quality of those leads. Focus on whether the leads are relevant for your business, whether they need your services, etc.

One of the widely-used lead qualification technique is BANT; it helps you qualify your leads based on budget, authority, need, and timing. Check out this video where our CEO talks about using the BANT framework to qualify a lead within the first 5 minutues of your first call with them.

Mertric #2: Conversion Rate

The conversion funnel metric is the percentage of leads that convert into your clients. You need to keep track of your conversion rate as it will help you understand what works and thus optimize your processes to improve efficiency and conversion rates.

In some cases, a conversion can also mean a resource download, email subscription, event signup, or any other action that you have defined.

Sales funnel conversion rates are one of the easiest funnel metrics that businesses can calculate. You need to divide your total conversions by the total leads who have entered your funnel and multiply that by 100.

If you wish to avoid this manual task, you can even use a CRM software like Clientjoy to keep track of all your leads and automatically add them as a client when they accept your proposal, through integrations.

Metric #3: Total Sales

Of course, conversions need to ultimately get your business revenue, and that’s when this conversion funnel metric come into play. You need to track the total sales or total revenue that is generated in a specific period. It helps to evaluate and determine how much revenue you’re getting from the sales funnel. To calculate the total sales, you’ll need to add revenue generated for a specific period. Calculating the total sales helps to track growth and measure the sales funnel effectiveness.

Metric #4: Average Order Value

This metric is the conclusion of the sales funnel and is a very easy metric that you can calculate. It refers to the average revenue that is generated by a particular purchase. You can measure it by tracking the average amount that is spent every time someone places an order. To calculate the average order value, you need to divide your total revenue by the number of orders.  

Takeaway

These are the 4 sales funnel metrics that will help you measure your performance and improve your processes. Using the above metrics, you can identify your opportunities and find ways to work around your strategies. Another important point to keep in mind is to take a look at your sales to funnel in total rather than looking at just a few metrics. It’s only when you analyze the entire funnel you will be able to determine where you stand when it comes to measuring the success of your sales funnel.

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About Author

Yash Shah
Co-founder & Chief Executive
Facebook

Yash did Mechanical Engineering and worked as an Investment Banker before founding a Tech Agency that grew to 55 people team offering SaaS, FinTech and E-Commerce Web & Mobile app Development. He currently serves as Chief Executive at Clientjoy - a platform that helps 13K+ Agencies & Freelancers in 90+ Countries acquire and retain happier clients.

About the Editor & Reviewer

Mansi Shah
Editor

Mansi works as a Content Manager at Clientjoy, a Sales CRM & Growth Engine for freelancers & agencies. When she's not busy working, she keeps herself busy learning or binge-watching her latest sitcom obsession or writing about it.

Tanmay Parekh
Reviewer

Tanmay pursued his undergraduate studies in Information Technology but marketing piqued his interest & he finished his postgraduate in Marketing & Finance from Macquarie University, Sydney. With diverse experience across different domains like Ed-Tech, Digital & SaaS. He currently serves as a Growth Head at Clientjoy - a platform that helps 13K+ Agencies & Freelancers in 90+ Countries acquire & retain happier clients.

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