What are the KPIs for sales?
Key performance indicators (KPIs) for sales are essential measurements that sales teams use to see how well their plans work. By monitoring KPIs, managers can see which parts of the sales process are going well and which ones need work. By looking at KPIs, they can also make better decisions about how to spend their money and use their resources. You can keep an eye on many KPIs, but some popular ones are the win rate, the average deal size, and the conversion rate.
KPIs must align with the business’s general goals to work. For instance, if a company wants to make more money, income growth would be the leading sales KPI.
Like words
- KPIs (key performance measures)
- OKRs, sales goals, and sales measures
KPIs for sales vs. metrics for sales
KPIs and measures are two words often used to describe a sales team’s success. But there is a big difference between them, even though they sound alike.
Key performance indicators (KPIs) are specific ways to see if a business is meeting its primary goals. Key performance indicators show if a company is on the right track to achieve its objectives.
On the other hand, sales measurements track different parts of the sales process. This could be the average value of each sale, the number of sales calls made, or the rate at which leads turned into buyers. Metrics can help you judge how well your sales team is doing, but they don’t always show if the team is meeting its overall goals.
Knowing the difference between KPIs and measures is essential, even though they are both helpful. KPIs show you if your team is on track to reach its goals. Metrics, on the other hand, give you more specific details about the sales process. Both can give sales managers a complete picture of their team’s performance.
How to Pick the Best Sales KPIs
Numbers are everything in sales, and keeping an eye on the right KPIs is a big part of ensuring teams do their best work. But there are a lot of different KPIs for sales. Which ones should companies keep an eye on?
When picking the right sales KPIs, sales managers should think about the following:
What do you want your business to do?
The sales KPIs should align with the company’s general business strategy and goals. If the goal is to get a more significant market share, keep an eye on KPIs that show new customers or more money coming in.
What do your clients care about?
The sales KPIs of a business should be based on what customers care about and be linked to keeping customers happy.
What’s essential to your sales staff?
The things that salespeople care about should also be at the center of sales KPIs. KPIs about a sales rep’s success, like deal size or close rate, should be tracked if they care about commission.
Who do you have the information for?
Sales leaders should look at the available data when picking their sales KPIs. If there is a lot of information about getting new customers, then focus on the KPIs that have to do with that. Start with simpler KPIs, like sales growth, if there isn’t a lot of data to work with.
These questions will help sales managers narrow down the list of possible KPIs to keep an eye on. After that, it’s just a matter of trying different ones and seeing which ones help the business make money.
Any sales team in any business should keep an eye on a few key performance indicators (KPIs). These include the usual deal size, conversion rate, and the customer’s lifetime value.
Picking the correct sales attempts to monitor can make the difference between a sales team that meets its goals and one that doesn’t. For sales managers to choose KPIs that will help drive growth, they need to take the time to learn about the business and what the leadership wants to achieve.
KPIs for sales reps
- KPIs help sales reps determine how well they meet their goals and quotas.
- This is the total number of deals closed in a specific period.
- For the team to meet its sales goals, it needs to close a certain number of deals.
- The sales conversion rate is the number of approved leads that become paying customers.
- Average sale value, also called average deal size, is the average amount of money a customer spends on a sale.
- Win Rate: The number of deals won (finished in a way that made money for the company).
KPIs for sales managers to work with
CROs and sales managers can understand how their sales team is doing by setting sales goals and monitoring KPIs. The sales team can ensure they will meet their sales goals by monitoring these measures.
The average time it takes to close a deal, from the first contact with a lead to the actual purchase; shorter cycle times generally mean the sales process works better.
Sales by Contact Method: This checks to see which ways of getting in touch (email, calls, meetings in person or online, social media posts, etc.) lead to sales to find the best one.
Sales Productivity: This is the number of deals each salesperson closes monthly. It’s an excellent way to keep track of each rep’s success and see where they might need more help or training.
- Number of Monthly Onboarding and Demo Calls—Keeping track of this number is essential because these calls are vital to finishing deals. Sales managers can divide this data into groups of data about each employee to see how they do it, find workers who aren’t doing their jobs well, and coach them as needed.
- A deal’s “pipeline value” is how much it’s considered worth right now. This number is often used to check the health of the sales pipeline and guess how many sales will happen in the future. Most people increase the average deal value by the number of stills in the pipeline to find the pipeline value. This can help you understand how much money your business could make from the deals already going on.
- Pipeline Velocity: This metric shows how fast deals are going through the sales pipeline and can be used to guess how well sales will do in the future. You can use pipeline velocity to figure out how healthy your sales pipeline is and where any problems are that might be stopping progress. Plus, it can help you guess how much money you’ll make and sell.
- Customer Acquisition Cost: This is the total amount of money it costs to get new customers. It covers the costs of marketing and advertising as well as sales activities. Businesses may find it helpful to keep an eye on CAC because it can show them how much it costs to get new customers and whether or not that cost can be sustained in the long run.
- Customer Lifetime Value: This is the total amount of money a customer is likely to spend with a business throughout their relationship with that business. Businesses can use CLV to determine which customers are more critical in the long run by seeing how much money they can make from each one.
- Sales Forecast Accuracy: The number of deals finished during the predicted period. This is an excellent way to find places where revenue operations can improve forecasts.
The sales attrition rate is the number of lost sales over time. A high turnover rate could mean a company needs to change its sales approach, which isn’t working.
The customer retention rate is the number of people who keep buying from a business over time. The rate of keeping customers is essential because getting new ones costs a lot more than keeping the ones you already have.
The churn rate is the number of people who stop doing business with a company in a certain amount of time. It’s also called the customer loss rate or the customer attrition rate. Investors also use this measure to determine how healthy a company is and how much it can grow.
Income from sales is the most important KPI for sales managers to keep an eye on. Sales revenue makes it easy to see how well a sales team brings in money for the business.
Keeping an eye on and measuring key performance indicators
Businesses can monitor their sales success in several ways, such as using sales software, spreadsheets, or even writing notes. The important thing is that companies regularly track and study their key sales indicators (KPIs) to improve their sales strategies and methods.
A sales manager can use the steps below to set reasonable KPI-based goals and targets that will lead to revenue:
Know what the goals of the sales organization are.
Before using sales KPIs, sales managers must be clear on why they want to do so. Is it to make things run more smoothly? Or to find specific places where you’re weak? For instance, it might be essential to determine if some goods sell better than others. They might think about using a lead-scoring method to be more efficient. They could look at the ROI of their projects to find out how well their marketing was working.
Pick the Right Thing to Measure
After the KPIs are set, sales leaders have to choose which ones to keep an eye on. Some sales KPIs are conversion rates, pipeline velocity, average deal size, customer term value, etc. Each area has a different part of the sales funnel, which helps you focus on improving that part of the funnel.
Make goals and limits that are attainable.
As a sales leader, you can set goals and targets that are reasonable by following these tips:
- Analyze past sales information to guess what will happen in the coming years. This shows how much the sales team can do.
- Please ensure the sales team is focused on the right things by setting goals for each product or service.
- Check-in with the sales team often to see how they’re doing. This will keep them on track and keep them going.
Getting better at sales
If sales managers want their teams to do better on sales KPIs, they need to figure out what needs to be fixed and then make the changes. Here are some ways that sales organizations can boost sales:
- Teach the sales team how to sell things effectively.
- Putting in a CRM system will help you keep track of customers and leads.
- Setting goals for salespeople and giving them rewards for meeting those goals.
- Using business intelligence software to look at and understand facts about sales.
- Reviewing their KPIs regularly and making sales processes more efficient to get better results.
- Salespeople can be more efficient and productive and perform better using tools that help them do this.
- Find any slowdowns or trouble spots in the sales process and try eliminating them.
- Conducting regular performance reviews with each salesperson to find ways to make things better
They are creating an environment where people on the sales team can work together and as a team, always trying to make customers happier.
