Much depends on whether you are measuring the sales performance of an individual rep, team, or department. You can also track sales figures relating to a particular product line, which may help you identify when there’s an issue with the product, rather than the team selling it!
To help you navigate through the maze of different success measures we’ve put together a list of 24 sales KPIs, with definitions, uses, and methods of interpretation.
Sales Key Performance Indicators are measures you can make that give an overview of how well a sales rep or team is doing. They can be used by both managerial staff and sales reps to monitor performance.
Many sales platforms, such as HubSpot or SalesForce, allow real-time tracking of various KPIs so that salespeople can keep an eye on their own performance against set sales targets.
Targets, of course, are vital. Without a benchmark for what a KPI means, the indicators in themselves are meaningless. Targets provide an anchor point, giving reps something to aim for. They also provide sales leaders with a way to compare performance and report back to senior management.
Why Are KPIs In Sales Important?
Without KPIs, there’s no way to tie sales performance back to corporate strategic objectives.
KPIs allow stakeholders to check that a sales department is likely to reach its monthly, quarterly or annual targets They allow managers and sales directors to identify points of weakness and individuals who may need more support.
KPIs also help in the construction of revenue projections, and financial forecasting. As Melissa Houston wrote in Forbes, “they help align the business to achieve strategic goals such as profit, growth, performance, sales levels. Numbers don’t lie, and if you can quantify your key measurements, they provide objective feedback on business performance.”
Objective is the key verb here. Although a rep may disagree if they’re told they’re not working hard enough, they can’t take issue with being informed they aren’t achieving their KPIs.
Once an underperforming rep accepts the disparity between expectation and measurable result, remedial steps can be undertaken.
24 Important Sales KPIs To Track
Here are 24 of the main KPIs that sales teams use to track performance:
• Sales Activity number
• Average Deal Size
• Win Rate
• Customer Acquisition Cost
• Revenue by Product
• Cost Per Lead
• Cost Per Acquisition
• Competitor Pricing
• Sales Volume by Territory
• Volume of New Opportunities
• Client Engagement
• Upsell / Cross-sell Rates
• SQL to Conversion Rate
• Client Acquisition Rate
• Response Time
• Positive / Negative Reply Rates
• Lead follow-Up rate
• Meeting Acceptance Rate
• Deal Win-loss Ratio
• Average Customer Lifecycle
• Customer Retention Rate
• Revenue Per Account
• Customer Lifetime Value
Yes, that’s a lot of KPIs, and it’s far from an exhaustive list. You’ll probably track only a handful of these regularly, and it would be far too much to expect a rep to monitor all of these KPIs themselves.
However, by picking perhaps a dozen of these and tracking them over time, a sales manager can properly assess how well their teams are doing.
Below we’ll break down what each term means, and what it’s used for.
1: Sales Activity Number
This is one of the simplest metrics to track. It’s just the number of emails, calls or scheduled meetings a rep or team has achieved. Of course, this doesn’t necessarily tell you what proportion of these activities contribute to a conversion. A successful rep could demonstrate less activity but develop more customers.
2: Average Deal Size
When reps have a range of products to sell, of differing value, or when they have leeway to offer discounts, then average deal size can be helpful to ensure an acceptable profit margin is maintained.
It can also indicate when a rep is doing well in terms of upselling or cross-selling. Perhaps they have fewer clients, but their average deal size is high, which makes all the difference.
3: Win Rate
Another very simple measure is simply the ration of leads engaged to deals won. If you have 1000 qualified leads and this translates to 300 sales, then that’s a win rate of 30%.
You can calculate this metric on raw prospects, or qualified leads (or both).
4: Customer Acquisition Cost
This KPI, abbreviated to CAC, helps ensure that a sales department is cost effective. It calculates the cost, totalling up all touchpoints, of the whole journey of a lead from first point of contact to closing deals.
This might factor in, for instance, the average cost in employee minutes spent on calls or emails, to secure each new customer. If this KPI rises to an unacceptable level, it may be that your processes are inefficient or ineffective.
5: Revenue By Product
Helping direct product development or acquisition, you can find out which products bring in the most revenue. As with all metrics, interpretation is important.
For instance, some products may work in some territories or markets, but not in others. Sometimes it’s not the product as such, but the product-market fit that needs adjusting.
6: Cost Per Lead
This may sound like CAC, but it refers instead to the cost of acquiring leads, not sales. It is a measure of how well a marketing department is performing.
However, the CPL metric does affect sales since it may alter the acceptable profit margin for each deal. If it is expensive to acquire leads, then it’s more vital than ever to close a higher proportion of deals and maximise Average Deal Size.
7: Cost Per Acquisition
Related to CPL, Cost Per Acquisition (CPA) sums up the total cost of all a company’s activities leading to an eventual deal. This will range from the cost of market research right through to any discounts a sales rep applies.
As sales and marketing collaborate and refine their processes, CPA should decrease. You may decide upon an ideal CPA you’d like to achieve.
8: Competitor Pricing
You don’t need to spy on the competition in every detail, but it’s important to keep ahead of competitors – especially their product prices. This will allow you to position your brand (is it a budget or luxury offering?) Alternatively, you might develop a price matching approach to ensure you’re always competitive.
This KPI is key in sales roles where there’s opportunity to offer discounts, upsell, or develop multiple product tiers (cf. subscription-based SaaS products).
9: Sales Volume By Territory
If you sell countrywide, or globally, it can be helpful to see where the most sales are being made. Do you need to redeploy sales reps in order to take advantage of a surge in demand, or focus additional effort on locations that have proven resistant?
You can also A/B test different strategies in different territories, to see what sort of effort bears fruit. From promotional sales to demos or samples, there are lots of ways to improve sales in a particular location.
10: Volume Of New Opportunities
Your BDRs (business development reps) are as integral a part of your salesforce as your sales reps. This metric tracks their performance in bringing in new leads, then qualifying them as likely candidates.
The volume of new opportunities is a measurement of how effective the early stages of your sales pipeline are proving. You can measure this KPI against expected quotas to see if you’re underperforming. And if everyone is hitting those quotas with ease, perhaps it pays to set more ambitious targets.
11: Client Engagement
Rather than looking at new opportunities, this KPI focuses on aftercare and quality of customer contact. If your reps keep a record of customer contacts, following the initial sale, you can see if they are checking in with customers to keep them happy.
This metric could be vital in a business that relies on subscriptions or regular purchases, or one that is predicated upon excellent aftercare.
12: Upsell/Cross-Sell Rates
With some types of products (such as new cars) a good sales rep can generate revenue by convincing the customer to purchase extras which add value. Upselling is adding additional purchases, whereas cross-selling is selling a different but related product to an existing customer.
You can track how well your reps engage in both activities, and set targets for upselling or cross-selling to maximise revenue and compare performance.
13: SQL To Conversion Rate
Sales Qualified Leads (SQLs) should, by definition, be convertible to deals. However, the rate of success may vary, depending on two factors – the quality of the leads, and the ability of the sales reps.
If your SQL to conversion KPI is less than impressive then you can ascertain whether it’s an across-the-board problem. You can then make strategic changes. Alternatively, you can use this metric to identify underperforming reps, and provide assistance or sales training.
If your marketing team qualify leads, then this metric would be stated as an MQL to conversion rate.
14: Client Acquisition Rate
Another popular metric similar to the above measure, is Client Acquisition Rate. Put simply, this is the number of prospects which convert to customers. Crucially, this is measured in number of individuals, not number of deals.
It is also trackable over time, so that you can set targets for how many conversions occur per month or quarter, then modify strategy or messaging to improve performance.
15: Response Time
A lot of businesses set target times for answering initial queries or responding to early customer touchpoints (such as an ecommerce portal visit or newsletter sign-up).
This is a great KPI for making sure your processes are working, and that your tech stack is delivering efficient systems for reps to keep on top of workload. Clearly, it pays to be quicker on the draw when it comes to customer response.
16: Positive/Negative Reply Rates
Like response time, these metrics measure a particular stage of the customer contact process. They measure how long it takes a customer to reply to your selling proposition with a yes or no.
This KPI refers to prospects, and disregards the number of customer touchpoints it takes to get a definitive yes or no. Example: you contact 100 prospects – 12 respond with a yes and 88 respond with a no (or never reply, which amounts to the same thing). That’s a positive reply rate of 12% or a negative reply rate of 88%.
To improve this metric, you’ll either get better leads, develop a more effective sales proposition, or consider sales rep training.
17: Lead Follow-Up Rate
This metric is a measure of thoroughness, since the ultimate aim is to follow-up on all qualified leads.
If a rep is failing to hit the KPI target here, then either their workload is too challenging, or they aren’t pulling their weight.
18: Meeting Acceptance Rate
This metric is quite self-explanatory. If your reps work by scheduling sales calls, meetings or demos, then how many such offers are accepted? This KPI will be expressed as a percentage.
If this metric isn’t being met, then it either signals ineffective targeting, or an unattractive proposition. The former could be due to human error, or something as straightforwardly technical as emails going to prospects’ junk items folders.
Ideally, you want to build a sales pipeline that requires as few customer touchpoints as possible. This metric simply counts the average number of touchpoints per customer before either a sale or a withdrawal.
This metric measures the success of the last stage of the process, which could be where your sales reps turn over their prospects to Account Executives. How many of these primed prospects convert to deals, and how many walk away at the last minute?
If this ratio dips too low, then it could either mean that your prospects aren’t ready to sign on the dotted line, or that your AEs are underperforming.
21: Average Length Of Customer Lifecycle
When finalising a sale, you want to minimise the length of the customer journey from initial contact to closing the deal. This KPI measures that timescale in days. It should allow you to see whether there are any roadblocks in the sales process, or whether any individual salespeople are simply taking too long to complete the process.
22: Customer Retention Rate
Another time-based metric is the amount of time a customer remains loyal to a brand or product. This KPI is especially pertinent with subscription-based offerings, or with products that you might reasonably expect a customer to upgrade (like a smartphone).
23: Revenue Per Account
If your sales model relates to accounts with multiple purchases, rather than individual products, then it can be useful to measure the average revenue per account.
This KPI can prove helpful to your marketing team. They can devise campaigns to upsell or cross-sell to existing customers or switch strategies to attract prospects with better revenue potential.
24: Customer Lifetime Value
This KPI, derived from a statistical analysis of past customer behaviours, predicts the total revenue that a customer’s interactions with a company will generate. CLV is predicated upon assumptions about how well a prospect fits a proven buyer persona.
Clearly, this is an estimated, rather than measured metric, but it can be used to gauge the value of potential prospects and direct effort where it’s likely to be most beneficial.
For instance, a prospect in their 20s, who fits your buyer persona to a T will have a far higher CLV than someone in their 50s who is only a 50% fit. That doesn’t mean you’ll ignore the latter lead, just that you might not expend as much time or money in pursuit.
In sales, gut instinct counts for a lot. However, only data tells you whether you’re getting it right.
As you can see, there are a ton of ways to estimate or measure sales performance. Fortunately there are also many sales platforms capable of tracking these KPIs for you and delivering analytics in the form of easily interpreted dashboards.
By choosing the right sales KPIs, a sales leader can keep a close eye on performance without literally looking over shoulders. They should also be able to ensure that their department’s work is aligned with corporate strategy and delivering agreed goals.