Although the incentives or bonuses they can receive for a certain number of sales are motivating for salespeople, it is surprising how other types of data can help you increase the competitiveness of your team. That is why we are going to share with you some examples of sales KPIs that may be the factor you need to measure to push them to reach the next level.
In addition to tracking salesperson performance, sales metrics can be used to motivate sales teams and increase the revenue they produce.
Let’s learn more about its importance, how to select the best KPIs for your business and some indicators that you should measure.
What is a sales KPI?
A sales KPI is one that allows you to evaluate the performance of sales teams, diagnose possible problems and continually move towards the desired goal.
To measure sales from a quantitative point of view, companies use quantified sales indicators that determine the performance of a person or the productivity of a department: increase in turnover, increase in sales volume, profitability rate , etc.
To evaluate commercial effectiveness from a qualitative point of view, the KPIs used to measure customer satisfaction or product quality are integrated into the commercial scorecard.
Importance of sales KPIs
Top-performing sales teams are adapting to a fast-paced, ultra-competitive business environment by using data.
Everything in sales is measurable, and that’s a good thing, because everything that can be measured can be improved.
Indicators for measuring sales performance act as a compass and help them stay focused on achieving results.
If you want to achieve a goal, such as percentage growth in revenue, you can define certain indicators at each level of the sales team.
For example, revenue and sales executives will be responsible for that high-level objective, but directors and managers will focus on the activities that are directly under their control.
While executives can track sales growth, managers can track sales per rep, and reps can track quotes and sales closings.
Examples of sales KPIs to generate more revenue
As you establish KPIs for your team, you may find that some are more effective than others.
Sales KPIs also depend on your team structure, your organization’s goals, and the data you have available .
1. Sales leaderboard
A sales leaderboard is a powerful tool to foster competition among your sales team. By showing how each rep is meeting goals, it’s easy for the sales manager to see who is hitting quota and who is falling behind.
If you use an openly shared sales team dashboard, the competition becomes even greater, since no one wants to be the one at the bottom of the table.
Depending on your organization’s structure, growth stage, and goals, you may want to track revenue, number of deals, or deal size per sales rep on your dashboard.
You can also use it in conjunction with other sales KPI examples to ensure you’re setting effective goals for your team.
2. Sales by channel
As a sales leader, you want your team to spend their time on leads that are likely to convert into closed wins.
Tracking sales by channel shows which sources are producing the most or best deals, including those managed by the marketing team, as well as customer referrals, partner referrals, etc.
To be more effective, you can monitor sales channels, make an evaluation, know the value or size of the transaction and more, and of course optimize your strategies to obtain the results you want.
3. Ratio of opportunities won / win rate
Opportunity won ratio, also known as win rate, is one of the most important examples of sales KPIs, as it tells you how well your opportunities are handled with qualified leads.
However, most teams will have the opportunity to win some lead or win at some stage of their sales funnel.
If your funnel is more complex, including sales-qualified leads, trial periods, etc., you’ll want to track conversions between each of those stages so you can see if it’s “leaking” in any areas.
In addition to tracking win rate by team and rep, you may want to calculate this by account and by contract value.
Your win rate may look great at first glance, but the value of the contract may show that a lot of potential income has been lost. If so, you’ll want to dig deeper into the situation to understand why this is happening.
4. Total contract value and annual contract value
To understand the revenue you earn from each sale, use the total contract value or the annual contract value. Remember that the total contract value looks at the entire contract period, and the annual contract value only considers the 12-month value.
These two examples of sales KPIs can tell you more about your revenue: average transaction size and annual recurring revenue.
The average transaction size is seen in the average sales price of all closed deals and can be calculated as your average total contract value.
Annual Recurring Revenue is similar to Annual Contract Value, but only looks at recurring revenue, not one-time fees (implementation, training, etc.) that may be included in a contract.
If most of your contracts are one year, you may only need the annual contract value, the total contract value won’t be much different.
On the other hand, if your contracts frequently vary in length, you’ll want to keep track of both.
5. Average income per account
The average income per account is another example of sales KPIs that you can track to know what income you earn on average for each account / client per month.
Tracking average account revenue per rep can be a useful way to encourage cross-selling and up-selling among your team as they try to increase the revenue they generate through their accounts.
6. Average sales cycle
How long does it take your team to close a client? Calculating the average sales cycle is a valuable way to manage expectations and estimate upcoming dates.
Several factors can affect the sales cycle, such as rep experience level, specific product or service being sold, company size, geography, etc., and so you may want to delve deeper into each of them. they.
You can also use the average sales cycle metric to identify opportunities or what factors are causing a failure to close. Without a doubt, this is one of the examples of sales KPIs that you should keep in mind.
7. Attrition rate per sales representative
You want your team to close a lot of deals, but you also want paying customers to stick around.
An effective way to help your reps understand the importance of this principle is to track the churn rate per rep.
Remember, a salesperson who closes a lot of deals that end up causing problems may cost the company more in the long run.
8. Growth rate
Growth rate can be a highly motivating metric, especially in the early days of the company when it is much easier to see rapid sales growth.
Over time, you will have to generate a lot more new revenue each month to maintain it, when you are at that point the growth rate may not be as useful for your team.
Bring the team together to celebrate each accomplishment they’ve achieved. Involving people in the success of the company as a whole can increase energy in your sales team.
9. Quota achievement
Your sales representatives live by meeting their quota. As you set goals, it’s critical to consider achieving your assigned goal: How many of your reps are reaching their target number? How close are you to reaching the global team goal? Are your quotas and targets high enough to maximize performance, but low enough to be within reach?
The sales quota is one of the examples of sales KPIs. It will help you calculate the achievement in pesos, such as for each representative, and really understand the result and enhance the performance of your team.
10. Monthly income vs. forecast
Tracking your monthly revenue against your sales forecast allows you to see how you’re progressing toward your sales goal.
Many teams rely on reps to report how their revenue forecast is going, but for such an important sales KPI, you have to rely on data to make this calculation.
If you fall too far short of your forecast, you can dig deeper into your data and discuss the issue with your team to see what went wrong and how to prevent it in the future.
11. Sales Qualified Leads
A qualified sales lead is the direct result of product or service demonstrations. Sales teams qualify demos as sales qualified leads when a prospect meets certain conditions defined by the sales process.
Before becoming a qualified buying lead, they are identified as marketing leads. Sales Qualified Leads are leads that indicate purchase intent. This sales KPI is important for teams because the larger your pool of sales-qualified leads, the larger the pool of opportunities that could convert to a customer.