Which sales KPIs should I be tracking?

Paul Conway Published:  Last updated: 

It’s almost universally accepted that most KPIs for the sale department are concentrated on revenue. Either collectively as in the performance of sales teams - defined by revenue generation, or they may be segmented by individual users ‘typical revenue banding’ or even by ‘product type’.

A business measures the success of sales as delivering and exceeding the targets set out in the business revenue goals. Most companies do not rely solely on headline sales revenue for measuring success. They focus on a mixture of sales-based motivation techniques and expectations of revenue based on process centric KPIs; such as the more calls made should in theory lead to more sales – if of course a consistent conversion rate is achieved.

Expanding a performance tracking initiative to include these type of KPI can be a little daunting, so here is a complimentary blend of process and revenue KPIs for a sales department.

Closing efficiency ratio

The ratio between the number of contacts (email, calls etc) that a person makes by the number of sales closed. Although this KPI deals with efficiency, when used in conjunction with a KPI for the average revenue value per sales it provides a good overview of an effective / efficient sales person / department.

Sales cycle

Sales cycle KPIs generally refer to the amount of time a sales person takes to generate revenue from a first contact. For example, if it takes 30 days from first contact to close of sale this figure can be viewed against other teams / sales employees to evaluate performance.

New versus repeated business

This is a ratio of sales revenue generated by new customers compared to repeat customers. This KPI helps with overall trending of customers but also highlights teams or individuals who are targeted with expanding their customer revenue base.

Retention Rate

Typically, service or contract-based sales require a KPI to measure the retention rate once the contract or service has expired. By tracking this rate businesses can determine the effectiveness of the sales individual or department at client retention against the average.

Tracking Sales KPIs

Typically, Sales departments would rely on Revenue generation for indicators of performance. These simple metrics would be manually tracked at the end of a specific time period. Spreadsheets, that would be used to process this type of information have now ceded to various other types of applications, some software focused specifically on creating and visualising KPIs - others focused on the tracking the times of sales activities such as ClickTime, through to CRM systems like Pipedrive and Salesforce that are specifically designed to monitor and report sales processes and performance.

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