As a sales leader, you can often feel lost, without clear visibility into what is happening with your business operations or your sales team. However, sales indicators are a way to gain greater visibility into your team’s activity and performance.

Establishing KPIs or sales indicators is not an easy task, although you find a lot of information that could serve as a guide, we all know that each team is unique, and not everything may work for your type of business.

Knowing which is the most important KPI to improve the performance of your sales team is key to achieving common objectives such as:

  • Product performance    
  • Sales closing percentage  
  • Sales goals

That said, presenting a clear approach that is easy for your team members to digest will ensure everyone is on the same path to success.

What are sales indicators?

Sales indicators  are  performance measures used by sales teams and senior management to track the effectiveness of sales activities within a company. These measures help optimize sales performance, sales funnel, and sales cycle length.

The key is to  choose the sales indicators that are most relevant to your business objectives; as focusing on the wrong ones could be costly for your business.

Steps to create effective sales indicators

If you have the metrics to do a sales analysis, but you don’t know how to enforce them, your plan won’t work. For the success of your strategy you must follow these simple steps:

  1. Review your sales plan to choose KPIs that are most important to the business.
  2. Set customer-centric goals .
  3. Make sure that the objectives of your sales indicators go from inside to outside the organization.
  4. Specify the details of its implementation.

How to establish sales indicators?

When establishing indicators to measure sales performance, you should think about the following points:

1. Be specific

Take your company’s top sales metrics and break them down even further. How can your department contribute to this broader goal?

Look at your main objective in relation to your specific line of business. Give context to your metrics. If the monthly goal is to increase monthly recurring revenue, what does this mean for the marketing department?

For example, to increase monthly recurring revenue by x%, you could, for example, try to improve SEO.

2. Implement actions

What are the actions that must be implemented to achieve your objectives? Continue working until you can determine exactly what activities are required of your team. Once you’re done, you should have a solid list of actionable metrics.

3. Stay informed

Communication and constant monitoring of your KPIs is essential for the success of your team.

By displaying metrics, for example through a  sales dashboard, you can monitor your progress against daily and monthly targets to achieve your goals.

Dashboards are an excellent option to interpret and display data in a concise and meaningful way through the use of graphs and tables.

This form of communication with your team ensures that each member stays informed about progress while allowing you to see a real-time, interactive view of your funnel.

Dashboards can also be displayed on a TV monitor in your office. The constant visualization of  business metrics  allows transparency at all levels and the ability to make business decisions in real time.

Determining sales metrics requires strategic thinking, collaboration, and clear direction. Creating KPIs for your team that are in sync and support organizational goals will ensure everyone is on track for success.

Examples of sales indicators

We know that your sales numbers are the most important thing for your business and that metrics act as a compass helping you keep you and your team focused on achieving results. Fortunately, everything in sales is measurable and we know that everything that can be measured can improve .

That is why we decided to make the following list, to help sales professionals like you find examples that you can apply in your work.

These sales indicators will allow you to evaluate the performance of your team, diagnose possible problems and move towards meeting growth objectives.

Look at the examples we have prepared for you and learn how to measure the sales of your business:

1. Sales growth

Sales growth is  an indicator that measures the sales team’s ability to increase revenue over a period of time.

Being a central part of any commercial strategy, it is one of the most important sales indicators that any organization must monitor because both executives and the board of directors will be able to make correct decisions about it, formulating and executing the established commercial strategy.

2. Sales objective

The sales target KPI measures current sales revenue and compares it to a current or past target. This can be set as a monetary value, the number of units sold or the number of accounts closed.

Monitoring sales performance against goals is a core tenet of any sales management strategy and is critical to creating a data-driven culture.

The formula to do it is (Sales in the current period / Sales objective) x100.

3. Sales opportunities

Each potential customer has a different estimated purchase value. With the sales opportunity metric  you will be able to organize and prioritize sales activities according to the value of the opportunity and the probability of closing the sale, which will help you be more effective.

4. Sales to date

The year-to-date sales metric allows you to track total sales for the past year and compare those results to previous periods or a specified time.

It does not contain a special formula, it only uses the total number of sales since the beginning of the year. We recommend that you present this sales indicator on a quarterly basis.

5. Sales by region

With the sales by region  metric  , you will be able to track the sales volume of products or services around the world. You’ll be able to keep an eye on high-performing regions so you can help your team optimize their targeting for more qualified purchasing distance regions We recommend that you prepare a report on this metric on a quarterly basis.

6. Product performance

The  product performance KPI will help you rank your products according to the revenue earned by each one, this way you can inform your sales team which products are selling well. At the same time, you will be able to know which are the worst performing products.

An important point when monitoring this sales indicator is to take into account the contexts that surround each product.

For example, is a certain product getting a boost because of a marketing campaign? Are you experiencing a drop because the competition is offering a similar product at a lower price?

7. Sales by representative

Measure the performance of each of your sales representatives or sales teams. The Sales Per Rep KPI will measure the ability of each of your sales representatives or sales teams to generate revenue for the organization.

By nature, sales teams are competitive, so providing this information clearly can help foster a healthy level of competition among your team.

One of the most important points of this indicator is to establish a “baseline” when comparing each sales representative. We must take into account that not all sales representatives are “created” equally and their baseline must take into account differences such as seniority, location or whether they are inbound or outbound sales.

Otherwise, this KPI should be used as a performance tool to encourage improvement and growth within your team.

8. Net profit

Net profit is  the best indicator to evaluate the performance of the sales team. In addition to measuring what is generated, it demonstrates the real value of sales . It is the value of sales, not their price, that has a real impact on the company’s profitability.

9. Sales force efficiency

Often unknown or underestimated by business leaders, sales force effectiveness is a very important financial indicator . Calculate the relationship between the money invested in your sales team and the money earned, regardless of the growth in revenue generated by sales.

In addition to the revenue generated, how can I evaluate its effectiveness? The sales force effectiveness metric will also help you measure the overall performance of each sales agent or even the entire sales team.

Total sales for the month, leads generated or active users in a trial will give you an idea of ​​the overall effectiveness of your sales team which encourages healthy competition within the department.

We recommend that you present this report every 30 days to your sales manager or your sales team, depending on the case.

10. Conversion rate

The conversion rate is another sales indicator that must be measured at each step of the sales process. Often, companies only consider the completion ratio. However, by focusing only on the last step, they ignore relevant data about the steps in the sales process that are more difficult to manage.

How well does your sales team convert prospects into new customers? With the sales conversion rate metric, measure the effectiveness of your sales team while, coordinated with the marketing department, they will be able to determine the quality of the leads generated.

We recommend that you make a weekly or monthly report to executives or managers. You can calculate it in the following way:

  • (Leads converted into sales / qualified leads) x100
  • (Number of conversions / number of clicks) x100

Furthermore, the completion ratio is often calculated based on parameters that differ from one company to another. Some companies do this by dividing the number of meetings by the number of sales, while others calculate the number of proposals by the number of sales.

11. The average sale value

It is important to know the value of an average sale, or the average value generated by an account. Even if the difference in sales varies widely, there must be an average value to achieve. It is necessary for planning objectives.

In this way, average purchase value measures the average sales value of each sales transaction you process. This is an important sales indicator for your team to understand because it will help you develop revenue projections and forecasts.

By understanding your consumers’ purchasing behaviors, you can develop strategies to strengthen certain trends, such as encouraging consumers to purchase higher quality products.

The average purchase value is expressed as a dollar value. For example, if you sold ten units with a total revenue of $25,000.00 your average purchase value would be $2,500.00.

12. Attrition rate and non-recurring sales

The churn rate measures the relationship between lost sales and total sales, while the non-recurring part of sales indicates the percentage of sales that are not renewed.

Combined, these two sales metrics reveal the amount of revenue that will be generated to offset losses caused in part by customer attrition and non-recurring sales.

13. Quantity and value of opportunities within the funnel

The number of opportunities within the sales funnel and their cash value are two different sales indicators that must be measured separately.

With potential revenue in the sales funnel, you measure the revenue that could be obtained with the volume of the sales funnel.

While not all leads will become paying customers, the total value of the funnel predicts the company’s future revenue. It is essential to determine if the sales team is on track to meet its objectives.

Additionally, this total value, divided by the number of opportunities, gives the average value of an opportunity within the pipeline . This new sales indicator provides information about the quality of the sales process.

Finally, we recommend that you report the potential income in the sales channel on a monthly basis.

14. Number of weekly meetings

For many companies, recording the number of calls and the length of conversations between representatives and potential customers makes little sense.

However, simply compiling the number of weekly meetings that representatives agree to with potential customers is a good indicator of team activities and sales follow-up.

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