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tags: A2, 03, Prospecting
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# Common and useful SaaS sales metrics

Let's recap:

:::info
- You know how to determine what day to day tasks will bring you closer to your sales goals
- You know how to structure your day and prioritize
- You know the importance of generating a morning routines and getting into the right mindset
:::

**🤔 On paper, you're doing everything right... but how do you know if you're working productively and effectively?**

💯 Enter metrics!
 
## You can't manage what you can't measure.
Metrics are used to track if individuals, teams, or organizations are on track for achieving certain objectives. Please don't think they are only used by your bosses to make your life miserable by telling you what you do wrong. They are very crucial for you too, to see if you are doing the right things and if you are doing them effectively.

We don't want you to memorize a list of metrics you are going to forget anyway. That's the old school of education we all know 😉

But there are a couple we want to highlight as they will come up frequently. These are the metrics you should know so that they ring a bell when you hear them in your everyday sales context. Feel free to come back to this lesson when you need a refresher.

Please note that the metrics and acronyms listed below are especially relevant for entry-level sales positions like SDRs and BDRs, as they focus on activities for the first stages of the sales funnel (lead generation and qualification).

## Metrics in sales

- **Dials to call:** Measures how many of your dials convert to calls
- **Call to connect:** The number of times you dial and reach a relevant contact person
- **Connect to meeting:** Conversion rate of meetings generated from your connects
- **Number of prospects touched:** Measures how many prospects you "touched" (called, mailed, messaged)
- **Lead response time:** Response time is how many minutes, hours, or days have passed from when a lead is assigned to a sales rep to when they log their first touchpoint. Lead response time is a critical metric for managing inbound leads.
- **Pipeline generated:** Pipeline generated is the number of dollars in the pipeline that has been created from leads the SDR was assigned over a certain span of time. For example, if an SDR was assigned 100 leads in a month, worked them all, and turned 5 of them into opportunities that made it to a pipeline stage, and each opportunity was worth $10,000, they would have generated $50,000 in the pipeline for that month.
- **Marketing Qualified Leads (MQL):** A lead that has achieved a certain score based on a predetermined set of criteria and is ready to be handed off from marketing to sales.
- **Sales Accepted Leads (SAL):** Leads accepted by sales for follow-up actions.
- **Sales Qualified Leads (SQL):** Leads that after salespeople qualify them, convert into opportunities

Let's see an example of a funnel that works with MQL, SAL and SQL.


## Metrics in startups

Besides the metrics mentioned above, there are a couple of metrics that are common and general to most startups, especially SaaS companies.

- **Monthly Recurring Revenue (MRR) or Annual Recurring Revenue (ARR):** You will hear this one over and over again. It describes the revenue generated by the company on a monthly or yearly basis. This is a very typical metric for SaaS companies selling subscriptions that generate recurring revenue on a monthly or yearly basis. If you sell a software that costs your customers 100€ a month and you have 100 customers, your MRR is 10.000€ and your ARR is 120.000€.
- **Customer Lifetime Value (CLV/LTV):** Represents the total amount of money a customer is expected to spend in your business, or on your products, during their lifetime. This is an important figure to know for companies as it helps make decisions about how much money to invest in acquiring new customers and retaining existing ones. Example: a customer spends 10.000€ on your products per year and is expected to remain loyal for 5 years. The CLV would be 50.000€.
- **Customer Acquisition Costs (CAC):** Measures the cost of converting a potential lead into a customer. If you spend 1.000€ on Google Ads and that brings 2 customers, your CAC is 500€. Businesses will use this metric to determine their profitability, as it compares the amount of money they spend on attracting customers against the number of customers they actually gained.
- **Churn:** Describes the percentage of customers or revenue lost in a given time period (month over month or year over year).

**🙌 That's it for today!**

Don't worry if your heads a little dizzy, again, there's no need to memorize these. You will learn them as you go along! And if in doubt, you can always ask what they mean, google it or come back to this lesson!

Let's do a short quiz to make sure you got everything before we move on to the Technology section!

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