A Sales KPI or metric is a performance measurement that is used by sales teams and by the top management to track the effectiveness of relevant sales activities within a company. These measures help in optimizing your sales performance, sales funnel and sales cycle length.
Here is the complete list of the most important sales KPIs and metrics, that we will discuss in this article in every detail:
Sales Growth: Is your business growing steadily?
Sales Target: Are you on track regarding the sales targets?
Customer Acquisition Cost: How much does a new customer cost?
Average Revenue per Unit: What is your average revenue per user?
Customer Lifetime Value: How much do you expect to earn per customer?
Customer Churn Rate: How many customers do you lose?
Average Sales Cycle Length: How do you shorten your sales cycle?
Lead-to-Opportunity Ratio: How about your lead quality?
Opportunity-to-Win Ratio: How many qualified leads result in closing a deal?
Lead Conversion Ratio: Is your conversion ratio stable?
Revenue per Sales Rep: How much revenue do your sales rep bring?
Profit Margin per Sales Rep: Is your sales team profitable as expected?
Upsell & Cross-Sell Rates: How do you increase your revenue and ROI?
Incremental Sales by Campaign: Which campaign brings you the best results?
It's a fact that by tracking the growth of your sales, you also track the growth of your company. It goes without saying that it's important to be mindful of this sales KPI. Follow the performance of your sales reps, their target industry, and area through professional sales dashboards. Let's say your team focuses on many verticals and only one of them proves to bring significant returns. This could be a sign to reassess the verticals distribution in your team. You won't leave money on the table and you'll have higher returns. Be flexible and analyze your sales KPIs, and you'll bring more sales revenue to your business and, consequently, profits.Performance Indicators
A positive sales growth over a specific period of time indicates that you are on track with your sales goals to grow your business.Relevant Showcase Dashboard
One of your top priorities should be to understand if you are on track to reach your planned goals. By implementing automated sales reports, you can answer questions such as: Is your actual revenue better or worse than your forecasted revenue? When you first planned your goals, what did you base it on? Is your baseline included in your charts? This information will help you expect deal activities, results and, in case inconsistencies arise, you’ll better recognize outliers versus trends. This metric lets you know whether your team is doing what they should, if they need help or if the whole strategy should be changed or adjusted. It's crucial for forecasting, and it lets you know if other factors can impact your bottom line.Performance Indicators
In a good assessment of your actual revenue versus your forecasted revenue, the goal should be to outperform your forecasted amount.Relevant Showcase Dashboard
When we mention customer acquisition cost (CAC), we are referring to all costs incurred in signing up a customer. Different costs are associated depending on your line of business, for instance, if you’re an online marketer, you’ll include the costs of all your campaigns. In a traditional SaaS business, it might mean everything from all your staff’s salaries, all marketing and sales costs. It is recommended to recover your CAC in less than one year of your customer’s subscription. If this isn’t the case, you’ll burn through all your capital before you can depend on your monthly recurring revenue.Performance Indicators
The goal is to increase customer lifetime value and average revenue per unit or user/account, while cutting CAC, to maintain a profitable business.Relevant Showcase Dashboard
ARPU stands for average revenue per unit, the unit part of the acronym can also stand for user, account or any other paying customer. This sales KPI indicates the average customer’s revenue from all your sales. It's a simple calculation, you take your total monthly (recurring) revenue and divide it by the total amount of customers you have in your roster. This might seem obvious to some and it’s worth pointing out that if your ARPU is higher in comparison to your acquisition costs, you might run into trouble. Your customer acquisition costs should always be lower, otherwise, you’re not making any profits from your revenues.Performance Indicators
If your ARPU is rising you should be on track. This usually means that you are signing bigger customers, or signing customers with bigger plans.Relevant Showcase Dashboard
Our next sales KPI example refers to your customer lifetime value (CLV) which is important to track because the longer you keep having paying customers, the more you’ll make. To calculate this sales metric, you need to distract your CAC from the total amount of revenue which you expect to get from a new customer over the lifetime of the relationship. If your ARPU and CLV are rising, it signals that on average you are getting more revenue from each customer, for longer and that’s exactly what you should be aiming for. CLV enables you to understand how much you can allow for your CAC to still be profitable; a healthy ratio is key.Performance Indicators
As long as customer lifetime value and average revenue per unit are growing, you’re in the green and your CAC are appropriate.Relevant Showcase Dashboard
One of our sales KPI examples is especially important for businesses with monthly recurring revenue such as SaaS businesses. The customer churn rate expresses the number of customers who stopped using your company’s products or services in a defined timeframe and gives you a realistic overview of your customer retention strategies and what kind of trends you cope with. To calculate the exact churn rate, divide the total number of customers you had at the beginning of the month with the total number of customers lost. You can also automate these calculations by using sales analytics software that can trigger alarms if any sales anomalies occur. Your goal should be to keep the churn rate as low as possible.Performance Indicators
The higher the churn rate, the more customers and revenue you will lose. It should be on top of your priorities when it comes to developing retention strategies.Relevant Showcase Dashboard
If it's realistic to shorten your sales cycle in your industry, you first need to understand how you can optimize your current sales cycle. We recommend you analyze the cycles for individual reps at the different stages of the cycle. A quick comparison can show how effective a rep is in comparison to others in your company. The shorter the time each lead spends in each stage of the funnel, the better. This can also serve as a way to track an individual rep’s progress over time. We show this on a sales KPI template that can alert you on when your staff could need extra training and goal setting.Performance Indicators
Once you have a sales cycle length baseline, the goal should be to decrease that number, resulting in more sales in a shorter period of time.Relevant Showcase Dashboard
For the most part, every new lead is an unqualified lead at the beginning. Conversely, a qualified lead refers to a lead that meets qualification requirements. Although this varies from sales organizations, a qualified lead is most often an opportunity. A common tactic sales managers use to determine if leads are qualified is the BANT method. It stands for leads with a Budget, Authority, Need and Timeline requirements. The goal of this process is to measure if your lead can become a customer. The lead-to-opportunity ratio lets you understand the amount of leads you need to stay on track with your revenue goals. Once you’ve established a baseline ratio, you’ll know how many leads you need to create your target growth, and you’ll have revenue that is predictable.Performance Indicators
Your lead-to-opportunity ratio is the first part of the sales funnel to be examined. By looking at what is working and what isn’t you have a better idea of where quality leads are sourced from, and can guide the marketing and sales team better.Relevant Showcase Dashboard
This sales KPI tells us how effective a sales team or sales manager closes accounts. Whereas tracking leads to opportunities gives you an idea of how interests turn into a discussion, this metric measures how discussions turn into money in your business. Sales reps will refer to this as a win, hence opportunity to win. Some reps are amazing at sparking a discussion but might lack the right skills and motivation to close accounts. Sales metrics like these can help you identify and train them to close more deals. Looking at each rep’s opportunity-to-win ratio can enable you to identify areas of improvement and act accordingly.Performance Indicators
The closer the ratio of opportunity-to-win, the more effective your salespeople are at the later stage of the pipeline. If your team isn't closing a minimum of 15% of your qualified leads, you might need to rethink your qualifications process.Relevant Showcase Dashboard
One of the most important KPIs for sales is the magic number, the lead conversion ratio – ostensibly the amount of interested people that turn into paying customers. Some businesses have a 1 percent conversion rate and others might even reach 10 percent, and either could be succeeding in their field. Once you have a baseline, you’ll know how many leads you need to convert your current rate of customers. When you understand the ratio of your conversions and your average sales cycle, you'll know how many leads you need to keep your team running full steam. You'll also know how many reps you need at any given point.Performance Indicators
If your lead conversion rate is on target, you know that your sales pipeline is in good shape. A low lead conversions rate alerts you to weaknesses in your sales pipeline. Find benchmarks for your specific industry and use them as a target.Relevant Showcase Dashboard
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KPIs for sales must include stats about sales reps. You need to know how your team is performing and what kind of targets they need to reach, and this sales KPI will help you to do just that. It would be wise to compare these stats with the previous period to get a more detailed overview if your team results are growing or not. Set ambitious, but realistic goals. You can then analyze the exact revenue a sales rep is bringing, and depict these results over time. The target line will show you the average which you can adjust based on your overall sales goals.Performance Indicators
Identify which of your sales rep is bringing the best results and compare them with other representatives to be able to improve your team’s performance.Relevant Showcase Dashboard
Profit margin is one of the KPIs for sales that expounds on the profitability of the sales reps. This KPI is useful when management needs to determine whether to offer promotions or bonuses for each representative, or to determine the amount of the commission, for example. On the other hand, sales reps can use the margin to identify where to allocate their time and resources to be able to deliver the best possible results. It would make sense to compare the results between representatives and set realistic targets that each can outperform while bringing the best value and buck for the department or company.Performance Indicators
Compare your results over time and identify each sales reps’ strengths. See if the targets are met or your sales strategy needs additional adjustments.Relevant Showcase Dashboard
By implementing effective upselling and cross-selling tactics in your sales department, you stand a greater chance to increase your return on investment (ROI) and revenue in the long-run. It is far easier and cheaper to sell and, therefore, generate more revenue from existing clients and customers, than to acquire new ones. With upselling tactics, you encourage your customer to buy a more expensive upgrade or package of your product or service while cross-selling concentrates on purchasing an additional related product or service, for example. It also improves your customer service since your relevant suggestions for additional products and/or services can increase customer loyalty and customer satisfaction, too.Performance Indicators
Compare your upselling and cross-selling rates by the sales reps and see which one of them is the most successful. Implement their tactics to the whole sales department.Relevant Showcase Dashboard
Incremental sales by a campaign is another important KPI as it shows the number of sales generated by each marketing activity you have performed, whether through social media or e-mail. You can calculate your incremental sales by subtracting your baseline sales with your new sales generated. That means if you have your current sales of 75000$, and new sales of 95000$, your incremental sales will be a total of 20000$, resulted in your marketing campaigns. If you track this sales KPI on a regular basis, you will be able to determine which campaigns bring you the best possible results and develop further strategies with these new facts.Performance Indicators
Identify your best campaigns that have brought to you the highest number of incremental sales, and monitor the results over time.Relevant Showcase Dashboard
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