As a business owner, you know that sales are the lifeblood of your company. But what sales KPIs should you track to ensure continued growth? This blog post will show you the sales KPI examples and how to track them effectively.
Sales is one of those funny things – everyone knows it’s important, but few people actually know what metrics they should be tracking. As a result, many businesses end up tracking irrelevant or unimportant data points which give them little insight into their actual performance.
So, if you’re not sure which sales KPIs are most important for your business, check these sales KPI examples and you will have a place to start.
What is a KPI?
A KPI is a quantifiable, outcome-based statement that you use to measure if you are on track to meet your goals or objectives.
A well-crafted plan will have 5-7 KPIs to help monitor progress and ensure objectives are met. Each KPI should include the following:
A KPI is a key performance indicator. A good plan will use 5-7 KPIs to manage and track the progress of their plan. Each KPI should have a measure, target, data source, and reporting frequency.
Now that you’ve reviewed the KPIs that are commonly used, here are 10 sales KPI examples that we’ve seen companies measure their performance with.
10 Sales KPI Examples to Get You Started
While we can’t tell you what exact numbers you should be tracking, we’ve put together this list of popular KPI’s to help you start measuring your sales team.
Sales per rep: The average amount of revenue generated by each sales rep over a set period, such as monthly or annuallyWin rate: The percentage of deals your sales team closes compared to the total number of deals they’re working on
It’s important to collect input from your sales reps about which KPIs will help them track progress toward their goals and the company’s goals. Use their ideas to build a list of top-priority metrics. This will ensure that everyone is on the same page and knows which KPIs to focus on.
Having clear goals will help each of your sales representatives prioritize their tasks, so your entire team will be working toward the same goal.
Sales and Marketing KPIs to Track
There are a few key sales and marketing KPIs that businesses should track in order to gauge their sales success. These include the percentage of leads in each lifecycle stage, the MQL-to-customer conversion rate, the average length of the customer lifecycle, and the volume of new opportunities.
Additionally, businesses should keep an eye on their cost per lead and cost per acquisition, as well as their customer retention rates and average revenue per account. Finally, businesses should track their Net Promoter Score (NPS) and Customer Lifetime Value (CLV) to get a complete picture of their success.
For organizations that have sales and marketing teams, it can be hard for them to measure the success between the two. After all, how can you tell if the hand-off was successful?
Here are metrics that can tell you if your campaign is working:
1. The percentages of your leads into each lifecycle stage
If you break your leads into stages (Lead, Marketing Qualified Leads, Sales Qualified Leads), you might be able to see where the bottleneck is between the two teams.
If you want to increase the number of leads that make it to MQL, you need to focus on your marketing efforts. The handoff between MQL and SQL is crucial, so make sure that both departments are communicating effectively. Finally, sales needs to convert SQLs into opportunities. If any of these steps are not happening efficiently, it will affect your overall pipeline.
If the right lead isn’t being passed to them, then their sales figures will be negatively affected.
If you’re noticing issues with your pipeline, there are a few metrics you can check to help diagnose the problem.
2. MQL-to-Customer Conversion Rate
The MQL-to-customer conversion rate is a key metric that both Marketing and Sales teams should keep an eye on.
The MQL-to-customer conversion metrics are key for both Marketing and Sales. Marketing generates the MQLs, while Sales converts them into customers. Therefore, it is in both departments’ best interest to work together to improve this number.
3. Customer Lifecycle
The customer journey is the path that customers take from when they first become aware of your brand to when they become a loyal customer.
Organizations can reduce their customer acquisition costs and generate customers more efficiently by decreasing the time between a customer’s first impression and first purchase. In theory, shorter lifecycles will result in fewer resources expended per customer acquired. Sales and marketing teams can work together to improve the customer lifecycle and make it shorter.
Both marketing and sales can continue to improve this customer relationship by shortening the customer journey.
4. The number of new opportunities
In order to achieve alignment between sales and marketing teams, it is important to track the volume of new opportunities. Before measuring this KPI, both teams will need to agree on what a new opportunity is. By doing so, this will allow for a more accurate assessment of the data collected and avoid any discrepancies.
Marketing and sales must work together to qualify leads and create more opportunities.Sales opportunities are potential customers who have been identified as having a high likelihood of becoming actual customers.
The sales pipeline begins with opportunities, which are then converted into deals and customers. Marketing and sales need to work together to qualify leads and generate more opportunities.
Sales and Marketing need to work closely together in order to qualify more leads into opportunities.
5. Cost per lead
This metric is important for marketing campaigns because it helps to quantify how successful the campaign is at generating leads that sales can then convert into customers. A low cost per lead indicates that the campaign is effective at bringing in high-quality leads, while a high cost per lead suggests that the campaign needs to be tweaked in order to be more effective.
To calculate the cost per lead of a marketing campaign, divide the campaign budget by the number of leads acquired from the campaign. This will give you a clear idea of how effective the campaign is at bringing in new leads.
6. Measure the Cost Per Acquisition
From the research stage to the deal closing, the customer acquisition cost is the sum of all efforts that a company makes in order to acquire new customers. Acquisitions may include forms being filled out, assets being downloaded from a website, or an actual deal being completed.
Measuring this for both sales and marketing, deal closure may be more useful than lead conversion.
By looking at your cost per customer acquisition, you can figure out how much it cost you to bring that new client on board. By tracking this metric, you can figure out what works and what doesn’t.
With fewer missed calls and more time being spent on actual sales, the sales team will be much more efficient at acquiring new clients.
7. Measure Customer Retention Rate
Just because you’ve signed a client, it doesn’t mean that your job is done. Keeping track of how well you are serving their needs is essential to retaining them.
You can calculate a single number by measuring customer retention rate with this formula.Customer retention is vital for any business in order to maintain growth and profitability.
There are several ways to measure customer retention, but having a single metric makes it easier to review on a regular basis. The customer retention rate can be calculated by using this formula:
You can calculate the single most important metric for your business by calculating your retention rate.
8. Average Revenue Per Account
If you’re not tracking your Average Revenue Per Account, you should start now! This KPI will give you valuable insights into how much your accounts are spending with your business.
By understanding how much your average customer spends, you can better target your marketing campaigns to similar businesses. You can also take a more account based sales approach when reaching out to new customers.
9 Your Net Promoter Score (NPS)
Your NPS is a metric that measures how willing your customers are to recommend you to others.
Participants are asked to rank their likelihood of recommending a company on a 0-10 scale. Their rankings are divided into three different categories:
The NPS is a metric used to gauge customer satisfaction. It’s calculated by taking the percentage of customers who are promoters and subtracting the percentage of customers who are detractors.
NPS can be a helpful metric for measuring customer satisfaction because it:-Is easy to calculate-Is based on a simple question-Provides valuable insights
It’s important to send your NPS at regular intervals, but be careful not to send it too early to new customers. There are bound to be some kinks in the system that need to be worked out before an NPS can be sent.
How often should you send out an NPS? As a general rule of thumb, you should send it out to your clients once every three to six months.
To calculate the score, simply take the number of Detractors and divide it by the total number of respondents. Or, you can use this simple equation: (Number of Promoters – Number of Detractors) Total Respondents
Customer Lifetime Value (CLV)
Customer lifetime value (CLV) is a key metric for businesses to understand how much revenue they can generate from a single customer account. By considering a customer’s revenue value and comparing it to the company’s predicted customer lifespan, businesses can get a better sense of which customer segments or buyer personas will be the most valuable in the long run.
It’s crucial to know which customers or buyers drive the most sales for a business.
Account-based marketing isn’t just for large companies. It can also be used by small businesses to value their existing customers and gauge their account managers’ ability to service them.
Their ability to provide consistent value to clients can be largely measured by their level of commitment to providing that same level of service back to their clients.
An account manager’s ability to keep clients loyal and engaged over time is reflected in their customer lifetime value. By maintaining a high average CLV, an account manager demonstrates their skill in developing rapport and delivering consistent value to clients. This makes customer lifetime value an important metric to consider when assessing an account manager’s performance.
It’s an important metric to keep in mind when gauging your sales performance.
Sales Metrics Calculator
The sales metrics calculator can help you measure and track the following metrics: average deal size, win rate, demo-close ratio, quota setting calculator, commission calculator, customer acquisition cost (CAC), customer lifetime value (CLV), CAC-to-CLV ratio, revenue by product, customer retention rate, revenue churn, and employee turnover rate.
How to Choose the Right Sales KPIs for Your Business?
There is no simple, one-size-fits-all approach to choosing your key performance indicators (KPIs). However, there are a handful of things you can take into account when making a decision.
Some of the things to consider while selecting sales KPI’s are:
When choosing the sales KPIs for your business, always keep your company’s goals in mind. Try to focus on a few key metrics, and identify both lagging and leading KPIs. Additionally, don’t forget to consider your company’s stage of growth and choose KPIs that are most relevant for your specific situation.
But what did our survey respondents think? Which KPIs do they think are the most important?
When we asked our survey respondents, the 3 most important metrics were the number of sales made, the percentage of opportunities won, and the number of new opportunities generated.
Sales managers need to focus on the company’s objectives and then select the KPIs that will help them measure success. If they only look at KPIs, they are likely to fail.
Sales managers should always start by evaluating what their company is trying to achieve. They should then create a set of 4-5 sales objectives and measure the success of these objectives by choosing appropriate KPIs. By doing this, they can ensure that their sales strategies are aligned with their business goals and stay ahead of the competition.
“Sales managers should track their sales team’s progress with metrics like the number of new accounts, total value of those accounts and average sale size. These KPIs will provide valuable insight into how your team is performing, but they won’t necessarily help your salespeople get ahead.”
Conclusion
There are a number of sales KPIs that can be used to measure the performance of a sales team. Some sales KPI examples include the number of sales made, the value of sales, the number of new customers acquired, the number of repeat customers, the sales conversion rate, the average order value, and the customer satisfaction score.
By monitoring these key metrics, you can ensure continued growth and success in your business.
