Everything you should know about sales KPIs and metrics and how to track them
Table of Content
- What Are Sales KPIs And Metrics?
- Sales KPIs vs Sales Metrics
- Why Do You Need To Track Sales KPIs And Metrics?
- Different Sales KPIs And Metrics
- Monthly Sales Growth
- Sales Opportunities Created
- Monthly Onboarding And Demo Calls Fixed
- Lead Conversion Rate
- Customer Acquisition Cost (CAC)
- Customer Lifetime Value (CLV)
- How To Track And Measure Sales KPIs
- Set Up And Build The Sales KPI Dashboard
- Transform Your KPIs Into Revenue
Every business needs to understand data if they want to scale their sales team, grow their ROI, and stand out from the competitors. All the best-performing sales teams in the world run on data.
Key Takeaways:
- Sales KPIs help organizations measure pipeline health, rep performance, and revenue predictability.
- Metrics such as win rate, sales cycle length, and deal value highlight strengths and bottlenecks in the sales process.
- Activity-based KPIs reveal leading indicators of performance before revenue outcomes appear.
- KPI dashboards improve decision-making by providing real-time visibility into trends and gaps.
- Consistent KPI tracking ensures alignment between sales strategy and organizational revenue goals.
Upon tracking and measuring every small bit of progress your sales team makes, your ecommerce platform tends to suffer from analysis paralysis. All the numbers and data sedate your sales team rather than empowering them. This suggests that the businesses do not need a large chunk of data but only the right ones.
It does not matter whether you are a sales representative aiming for the highest spot or a sales manager trying to get the most out of his team. You need to understand the importance of sales KPIs and metrics and how to track them for the growth of your business.
In this blog post, we will walk you through everything you need to know about sales, Key Performance Indicators (KPIs) and metrics and how to track them to qualify prospects, make maximum conversions, and boost revenue.
What Are Sales KPIs And Metrics?
Sales KPIs (Key Performance Indicators) are the set of quantitative computations of the sales performance of an organization. These measures assist the sales managers, representatives, and leaders in keeping a track of the target progression, recognizing the trends and themes, and supervising the performance of the team.
The sales metrics, on the contrary, are used to track progress towards a particular goal, adjust sales compensation, take necessary steps for future growth, identify any strategic issues, and award bonuses and incentives.
Sales KPIs vs Sales Metrics
There is only a slight difference between the two terms: sales KPIs and sales metrics. In other words, they are the two distinct sides of the same coin.
Therefore, the sales KPIs are the fundamental metrics that are used to measure the performance of the business sales.
For instance, a company wants to track sales by region if they have started their business in a new market and want to catch a glimpse of its performance. Thus, “sales by region” is a sales metric. However, if you use this metric to make improvements in the performance of your business, it is a sales KPI. It is the performance indicator that measures the performance towards achieving the objectives of the company.
Why Do You Need To Track Sales KPIs And Metrics?
Setting up a sales analytics tool to track sales KPIs and metrics can help you assess the performance of the business effectively.
With the help of this data, businesses can start making optimizations in their processes and aspects associated with it. Thus, it is also vital for creating future strategies and predicting the growth of the company.
According to the Harvard Business Review, only 14 percent of the sales metrics are achievable. So, it is essential to use Business Management Solutions for VARs to measure the right metrics of the sales process for the business.
Different Sales KPIs And Metrics
There are several types of sales KPIs and metrics that you should consider depending on the specific goals of your business. However, only a limited number of them can help you to optimize your sales processes. Here’s a list of some of the best sales KPIs and metrics and how you should track each one of them:
Monthly Sales Growth
The monthly sales growth metric as a sales KPI gives a practical insight that you can use to optimize the sales strategies, processes, and product priorities. This metric evaluates the increase or decrease of sales revenue every month. On the other hand, annual sales revenue tracks the overall health of your company.
The sales manager uses this metric to keep a track of their marketing efforts and make changes to the sales funnel and processes wherever required. It is one of the most motivating metrics for any sales representative.
Sales Opportunities Created
This metric measures the progress of the opportunities the sales representatives are creating. It helps you to make a forecast of future sales and probably determine which options are worth going forward with. Therefore, it represents the quality assessment of the sales.
The Sales Opportunities Created metric also helps to gain valuable insights into the working of the outreach efforts, the effectiveness of the pitch, and much more.
Monthly Onboarding And Demo Calls Fixed
Indeed, not every customer will transform from an opportunity to sales. The Monthly Onboarding and Demo Calls Fixed metric helps to track the number of trial or demo calls the sales team makes in a month. It is a significant metric for closing deals.
Having a look at the metric every month is a sturdy way to measure the health of your sales funnel. If there is any loophole, the sales manager will identify the issue through this metric and fix it while making trial calls in the next month.
Lead Conversion Rate
Lead Conversion Rate is another crucial metric to track the performance of the sales processes in an ecommerce platform. This sales KPI allows you to come up with a result-oriented plan for gaining customers in the future. You can track the location of the customers or conclude why the lead did not convert into sales.
You can even look for answers to the following questions:
- When did the qualified prospects abandon your sales funnel?
- What is the difference between the number of prospects and the number of conversions?
- Are you working on the appropriate leads?
Customer Acquisition Cost (CAC)
The Customer Acquisition Cost refers to the total costs associated with bringing in new customers through marketing and sales. You can keep a track of the inbound marketing, paid advertising, sales, and business development, and events and trade shows.
No company can run on loss for years like Uber and Tesla. Nevertheless, sometimes it becomes essential to reduce the cost if you want to increase the sales revenue. With the help of this KPI, you can confidently assess the appropriate sources that are worth your time and investment.
Customer Lifetime Value (CLV)
Customer Lifetime Value is the average revenue from a customer from the beginning to the end. This sales KPI allows you to forecast the future revenue and profit of the company. Without this metric, the businesses cannot make decisions related to the Customer Acquisition Cost, time spent to convert them, and the number of leads that are left to be converted for the month.
How To Track And Measure Sales KPIs
Now, it’s time to put the knowledge to the test.
Once you have determined which sales KPIs and metrics are ideal for your team, you need to measure them with the right sales analytics tool. Here are the steps that you can follow to track, measure, and analyze the sales KPIs and metrics:
Pro Tips:
• Combine lagging KPIs with leading indicators to forecast pipeline risks more accurately.
Select The Best Sales Analytics Tools And Software
Choosing the right sales quotation software for VARs will benefit your ecommerce business to the maximum. You must look at the following fundamental features before selecting the sales analytics tool:
- Present data in a productive, easy to understand, and up-to-date manner.
- Track the performance of the sales personnel.
- Offer the topmost overview of the sales pipeline.
- Authorize the VARs Business Solutions to use the sales metrics however they want.
Some of the top business management solutions for VARs are VARStreet, Klipfolio, Close, Periscope Data, Looker, and Microsoft Power BI.
Set Up And Build The Sales KPI Dashboard
After selecting the right sales quotation software for VARs, it’s time to build it.
Several tools are available with a fully customizable sales KPI dashboard, while some of them provide you with actionable insights to use effectively.
The sales KPI dashboard will enable you to make a comparison of the sales metrics over time to measure the progress.
Pro Tips:
• Create role-specific KPI dashboards so each team member focuses on metrics that reflect their responsibilities.
Track And Measure The Additional Practices
You should remember the following practices of sales KPIs while working on your sales analytics tool dashboard:
- Set Sales Benchmarks- To keep a track of the sales KPIs and metrics, you need to measure your performance relative to the other competitors, campaigns, and industries. You can even use the 30/30/50 rule for cold calling and emails.
- Understand The People And Not The Numbers- You should not get carried away by the numbers. Instead, focus on the people that are behind those numbers. This way, you will have access to all your customer data along with reporting.
- Employ Sales Metrics For Each Part Of The Funnel- One of the biggest advantages of sales KPIs and metrics is to optimize the sales funnel. It can only be achieved with the assignment of sales metrics to each part of the funnel.
Transform Your KPIs Into Revenue
The last step of tracking the sales KPIs and metrics is to know whether you are being successful with it. However, it is more than having sturdy business management solutions for VARs with numbers.
