15 Sales KPIs to Drive Business Toward Success
The ultimate goal of every sales department of any business is to keep the business environment productive and to satisfy clients. The growth of a company’s revenue depends upon key decisions, which are made by sales executives or managers. Continuous tracking and managing of sales metrics and KPIs through business intelligence dashboards helps to monitor sales and profit, identify defects in products, and improve products based on customer expectations.
In this blog post, I will explore 15 of the most important KPI metrics that help sales executives and managers improve company performance.
15 important sales KPIs and metrics
- Sales growth
- Sales target
- Sales opportunities
- Sales cycle length
- New and expansion MRR
- Customer engagement score
- Sales by region
- Lead conversion rate
- Average conversion time
- Net profit margin
- Customer acquisition cost
- Customer lifetime value
- Customer churn rate
- Calls and emails per salesperson
- Predicted pipeline revenue
Let’s discuss each KPI and metric in detail.
1. Sales growth
The sales growth KPI helps you measure the ability of your sales team to increase revenue in a given period. Every business should track the sales growth KPI to know whether the business is growing or failing. This KPI is important to track periodically for maintaining consistent profit in a business.
Periodical tracking can be either daily, weekly, monthly, or quarterly, based on whatever is most effective for taking action at the right time. It also helps you to know how well your business strategies are performing, to assess the risk associated with your organization, and to derive new strategies to mitigate those risks.
2. Sales target
A sales target needs to be achieved by sales representatives or a sales team in a given period. By comparing current sales revenue with previous sales revenue, you can measure sales team performance. Planning and achieving a sales target in a given period determines the sustainable growth of the company and motivates salespeople to achieve more targets to promote business growth.
3. Sales opportunities
Sales opportunities play a vital role in any business. They help your sales representatives find more leads and turn them into actual business. This KPI allows your sales team to determine sales performance and change their approach in order to engage more customers.
4. Sales cycle length
Sales cycle length refers to the time it takes to capture a lead and then complete a sale. With this metric, you can measure the performance of your sales strategy and mitigate the risks that lead to a longer sales cycle, helping to keep it as short as possible.
5. New and expansion MRR
New and expansion MRR is the amount of additional monthly recurring revenue generated through new and existing customers. With this metric, you can gain the knowledge of strengths and opportunities from your sales and set higher targets for your sales teams.
6. Customer Engagement Score
The customer engagement score is a quantitative metric that is used to measure customer satisfaction and customer engagement related to free trials. With this metric, you can identify potential customers who are likely to convert from a trial to a full product subscription, helping you turn more leads into business. And it helps you detect customers who are willing to leave the trial, helping you to hold on to them with new strategies.
7. Sales by region
Knowing sales by region makes you well-informed about high-performing locations and helps managers focus on the least-performing region by providing tailored products or giving discounts. And it helps your marketing team approach regions with new marketing strategies.
8. Lead conversion rate
The rate of leads that are converted into actual sales is known as the lead conversion rate. With this metric, you can monitor how well your sales team converts leads into business.
Lead conversion rate = Number of leads converted into sales / Total number of leads * 100
9. Average Conversion Time
Average conversion time is the average time taken by the sales team to convert leads into sales. A short conversion time indicates high productivity and business growth.
10. Net Profit Margin
Net profit margin is the profit percentage earned by a company for each dollar at the end of the year. Through this metric, you can know the ability of a company or a team to convert more of its revenue into profit. A higher net profit margin indicates the profitability of your company.
Net profit margin = Net profit / Total revenue * 100
11. Customer acquisition cost
Customer acquisition cost is the total amount of money you have spent on sales and marketing efforts in order to gain a new customer. With this metric, you can know how well your marketing efforts are paying off. A lower “customer acquisition cost” value indicates high-performing marketing efforts.
Customer acquisition cost = Total cost spent on sales and marketing / Number of customers gained
12. Customer lifetime value
Customer lifetime value is the total revenue gained from a customer between the customer’s first purchase and last purchase. This metric helps you know how valuable a customer is to your company so that you can keep providing proper service to them and retain them in your business.
13. Customer Churn Rate
Customer churn rate refers to the percentage of customers who stop doing business with a company. It helps companies know how much business they are losing. It also helps companies devise strategies to retain customers and reduce the customer churn rate. A lower customer churn rate leads the business to increase profit and growth.
14. Calls and emails per salesperson
This metric helps identify the performance of every sales representative by the calls and emails that are sent to customers, the number of customers interested in your company’s products, and how many potential customers were captured per the number of calls or emails sent.
15. Predicted pipeline revenue
Analyzing the future growth rate of your company using predictive analytics, you can make good decisions earlier to alter your sales management, which helps avoid loss.
In Bold BI’s Financial Analysis Dashboard, based on a prediction, next month’s pipeline revenue is calculated. This dashboard also showcases the following sales metrics: an overview of revenue and expense details, online vs. retail sales, regional revenue, accounts receivable age, and predicted revenue for the next three months.
In addition to this dashboard, we also have four other sales dashboard examples.
The 15 sales KPIs discussed above are the most important KPIs for helping business growth, benefiting each sales role. For sales managers, these KPIs help track the effort of their teams and contribute to a profitable business. For sales representatives or executives, it will be motivating when they achieve sales targets, giving them an opportunity to help the business grow. For the CEO, it can be a great opportunity to alter strategy, if needed, as well as monitor the performance of the sales team or an individual salesperson, which in turn helps to consistently run a productive business.
As a note, some sales KPIs might always be defaults, while some KPIs might be changed over time per modern trends. It is equally important to adapt with new metrics to check possibilities to increase your ROI to measure your business performance and make the right decisions at the right time. With Bold BI interactive dashboards, you can create your own sales dashboards that will satisfy your specific business needs. We also suggest you look at the various dashboard examples in Bold BI for showcasing real-world KPIs and metrics based on industry, department, and data analytics.
Conclusion
I hope this blog post gives you an idea about sales KPIs and metrics, which in turn helps you create your own sales dashboards according to your business needs. You can also schedule a free demo with our experts to create flexible business intelligence dashboards in Bold BI. If you have any questions, please feel free to post them in the comments section below. You can also contact us by submitting your questions through the Bold BI website, or if you already have an account, you can log in to submit your question.
Originally published at https://www.boldbi.com on September 13, 2020.
