Sales KPI or Sales Key Performance Indicators are the performance measurements used by managers and higher authorities to keep a tab on the sales reps’ efficiency and track their sales activities. These KPIs are the leading indicators to detect the salespeople’s effectiveness and evaluate the team’s performance against the organization’s goals.
KPIs help teams and their managers to enhance their productivity by understanding their work patterns. Managers use Sales KPI to gain visibility into their team’s efforts and comprehend what might be keeping them from fulfilling their goals.
However, each business, be it ecommerce sales or B2B sales have different goals, and so not all KPIs are relevant to every business. Thus, managers and authorities need to choose the right KPIs for their business.
But what difference would it make if KPIs are chosen randomly?
Not choosing the right KPI might cost money, time, and manpower to the business. Being unable to track their team’s work efficiently, managers might end up losing credibility among their teams, and also risk losing clients, in turn, hampering the business.
So, to use the right set of KPIs, one has to decide first on which level they want to measure the performance, be it on an individual level, team level, departmental level, or the organization as a whole.
KPIs show the qualitative as well as quantitative values as a set of numbers and graphs, making it easier for everyone to understand where they stand against their goals.
Now, these goals can be again on an individual level, team level, or organizational level, depending on how the managers want to assess them. These numerals and infographics then help the managers decide what measures can be taken to boost their teams’ functioning.
To execute the right performance measurement, here are 7 Sales KPI that can help sales managers ensure their teams’ best efforts:
1. New Leads/ Opportunities
This metric keeps an eye on how the salespeople are interacting with clients in their territory, and whether they are meeting their quota or not.
It helps in finding out who in your team is hitting their number and who needs to put in more effort. Once you analyze and collect the insights you can share it with the team to create healthy competition. You can also use lead distribution software to help you analyze and track the performance of your team.
2. Client Acquisition Rates
Out of all the prospects mentioned above, how many are being converted into customers? Well, to know the ratio, this KPI comes in handy. It’s only natural that some reps might perform better than the others. But managers can try to dig deeper into understanding what difference there is in the ways of over-achievers and under-achievers through this metric.
For example, if one sales rep is hosting a webinar to pre-qualify prospects at scale, that can be applied across the organization. Conversely, if ultra-personalized outreach is improving client acquisition rates, it may be applied across the organization.
3. Existing Client Engagement
Conversion of new prospects into clients is essential, but maintaining a good rapport with the existing clients ensures a long-term business after the sale is done.
Having a good conversation every now and then and letting your clients know that the company is always there to help in any case allows the clients to trust the reps and the company. Thus, asking the team to keep a tab of regular interactions with the existing clients will matter for a longer period.
4. Sales Cycle Length
Some representatives take less time to onboard the customers while others take a bit longer. Managers need to tally this cycle of onboarding to analyze the efficiency of their teams.
This KPI is important not only because it lets the managers understand the time taken by reps to onboard the clients but also to comprehend the retention rates.
For example, a representative has a Sales Cycle length of 3 weeks; however, his clients are unhappy with the services and are needed to be churned again after six months, and on the contrary, another rep takes a reasonable time of six weeks but keeps his clients happy. So, in this case, the manager needs to understand which sales cycle is yielding better results.
5. Customer Lifetime Value
CLV is the indicator of the total revenue a business can expect from a single customer. Similar to what’s mentioned earlier, keeping a client engaged and happy to increase his business’s lifespan is what consists of Customer Lifetime Value.
Managers keeping a record of this KPI makes certain that their clientele is always satisfied and keeps working with the company for the longest period.
6. Monthly Sales Growth
It is necessary to track revenue monthly. You need to know if the sales of your team is increasing or decreasing every month.
Tracking the monthly sales growth will help you understand which strategies are working and where your team needs to put in more effort. If your team’s sales increase one month and decrease the next means, you will have to train them to drive constant sales growth.
7. Duration Per Stage
It is important to track how much time your team takes to move a deal from one stage to another. There are chances that the conversion rate will be low if the duration per stage is more.
So have a one-to-one meeting with your team and understand how much time they are taking to move a deal from one stage to another.
You can also take the help of CRM software that gives a clear pipeline view to find out at which stage of the sales process are your sales reps facing problems. Accordingly, you can guide them to move the deals from one stage to another quickly.
A team’s performance has a significant impact on the business bottom-line. To improve your team’s performance, keep tracking various KPIs, and provide regular feedback. Have a one-to-one conversation to understand the problem areas and share tips to improve their sales performance. There are many other Sales KPIs that managers can make use of to maximize profits while keeping their sales force happy.