Quick refresher: KPI stands for Key Performance Indicator.
So, sales KPIs are super important sales metrics that inform you about how you can improve your sales growth. Sales KPIs are entirely based on data, numbers that don’t lie. There’s no funky science here, just a purely analytical approach to doing and advancing business.
Sales KPIs are essential because they deliver key information about all aspects of your sales cycle. Start with your baseline, learn about your audience and potential customers or prospects and how you can best take them through the sales journey to the final point-of-sale and beyond.
Sales KPIs help identify…
- Qualified Leads
- Best Ways to Connect with Leads
- How and when to Manage Objections
- How to Identify Pain Points & Provide Solutions
- Most Effective Ways to Deliver Products & Services
- Follow-up and Maintain Relationships
This may sound like an overwhelming amount of information to explore, but we’ll help you identify the most important metrics from the top-down. Then, of course, we encourage you to dig into areas that pertain directly to you and your customers.
Knowing your sales KPI’s can’t hurt anything, it can only identify problem areas that you can transition to new opportunities. What you don’t know, you can’t change, but with data, you discover exactly what you need and make adjustments that grow sales.
There are practically countless sales KPIs to measure, so let’s focus on the most important metrics to have a basic understanding of and the kind of data that’s most effective for sales growth and an immediate boost. Let’s go big or go home, and start with the bigger, overarching KPIs that make or break a business.
Sales KPI #1: Actual vs. Forecasted Revenue
Your actual vs. forecasted revenue data point is really an examination of two essential sales KPIs in one. You must first calculate your forecasted revenue before assessing actual data. Without an end goal in mind, you will never know if you’re business is succeeding or not.
Our advice: start by setting up a specific time frame in which to review your revenue stream. This could mean year-over-year, but also quarterly, monthly, or weekly. No matter your decided time breakdown, you must get a handle on how much revenue you’re projecting
vs. how much you’re actually earning or practically all other business decisions are for naught.
If your business is just starting out, you may be studying competitor data, audience personas, and pricing models to project your earned dollars. If you’ve been managing your business for a longer period of time, you will continue to look at this data, plus reference your previously earned revenue.
It’s a good sign if the percentage increase or decrease between actual vs. forecasted returns align, or if your actual revenue sales KPIs supersede that of your forecasted revenue.
If you discover that your forecasted revenue is way below your actual revenue, it’s time to take action. Review more detailed sales KPIs to understand where losses may be occurring in your forecasting process or sales cycle. While lower-than-expected revenue may not be the best news, when it comes to managing a business, it’s better to know and be able to fix the problem than to not know at all.
Sales KPI #2: Opportunity-to-Win Ratio
Keep in mind that sales KPIs exist in part to help you focus your workload, fix what’s broken, and discover opportunities for greater success.
With this understanding let’s examine another overarching and completely essential sales KPI, your opportunity-to-win ratio. These stats report on your entire sales cycle from end-to-end; from a lead opportunity to a final close (and beyond). More specifically, you’ll know exactly how many leads are coming through and what percentage of those leads become paying customers. Upon closer examination, you’ll also discover each of the key conversion rates along the sales cycle. Identify where your wins and losses are along the customer journey and adjust accordingly.
Your opportunity-to-win ratio is a stat that should always be fresh in your mind. If it’s not, then you really have no way of calculating how successful your business is or is not. Worse than that, if you don’t know and understand where your business shortcomings are, your day-to-day tasks may be entirely wasteful. Yes, knowledge of sales KPIs can help grow your business, but not only in additional sales, but productivity as well.
Here are some additional ways to dig deeper into opportunity-to-win ratio sales KPI. For example:
- Where did the leads originate?
- What’s their geographical area?
- What’s their demographic background?
- What product or service were they looking for vs. what they inevitably purchased, or not?
You may also discover which of your salespeople/business developers/account managers are closing the most leads based on how many new leads they converted to sales. Look also at how much total revenue each person is bringing into the company.
While all of these data points are helpful, we do recommend getting a firm grasp on the big picture before looking more closely at the details. Recall, however, that the devil is in the details, so we most certainly suggest that you not let sales growth opportunities slip through the cracks.
Sales KPI #3: New Leads and Contacts
Know exactly how many new leads you’re getting? Are they good leads? And where exactly are they coming from?
If you immediately know the answers to each of these questions, you’re good to go, but if not, we recommend getting cozy with our #3 top sales KPI.
First, get info on the overall number. Exactly how many annual leads are coming through each year. Then break the year down to months so you can get a sense of any potential seasonal implications on your lead development process. Then you can get even more specific. You may notice, for example, that the majority of your leads come in on Sundays at 2pm. This is incredible data to have because now you know you can focus your advertising on the Sunday at 2pm crowd to double-down on new lead generation.
Of course you also want to know where these new leads are coming from. Specific sales KPIs can you tell you exactly how your new potential customers are finding out about your business in the first place by providing metrics on…
- Email marketing campaigns
- Social media networks
- Inbound website traffic
- Web advertising and landing pages
- Direct mail
- Inbound phone calls
- Google searches (and which search terms)
- Podcast, television, radio, billboard advertising
With sales KPIs there are no more secrets and no more mysteries about where your new leads may or may not be storming in because the data exists at-a-glance for your review.
Sales KPI #4: Employee Satisfaction
Often overlooked, but becoming more important as work-related stress has been recently deemed the health epidemic of the 21st century by the World Health Organization, employee satisfaction is paramount to a business’ success. These are the folks on the front lines speaking and working with your customers and potential clients. They are the face of the products and services you wish to sell, so keeping them pleased is in your best interest.
The good news is that employee motivation and satisfaction are measureable and entirely relevant sales KPIs. You are aware that there are direct costs associated with employee training, benefits, and turnover, so having your pulse on this top sales KPI will prepare you for what’s coming down the pipeline.
Sales KPI #5: Customer Engagement (after the sale)
Build customer loyalty and keep ‘em coming back for more by understanding your customer engagement sales KPIs, after the final sale has been made. These metrics will help you to familiarize yourself with the type of people who buy your products or services.
Consider studying your current customer’s behavior to learn how to continue selling to them, to encourage them to send you additional lead referrals, or to write your company stellar reviews and recommendations.
Sales KPIs can help track customer contact touch-points and which ones (email marketing/SMS-messaging/direct mail) they value the most. Discover if your existing customers are more apt to click on a recent company case study or to visit a friendly cat picture recently posted on your company’s Instagram page. Each of these data points, however varied, will not only help you maintain your customer relationships, but help you continue to sell and continue to grow.
The Great Sales KPI Wrap-up
Sales and revenue generation is nothing short of a numbers game. Know the numbers by knowing your sales KPIs.
If you have a measurable goal in place (see Sales KPI #1) you’ll know if you’re falling short or exceeding expectations. Either way, you’ll be better positioned to take action and grow your business.
For the sales KPI win, remember to focus on:
- Lead-to-close conversion rates
- New lead generation
- Employee satisfaction
- Post-sale customer engagement
Identify what’s working and what’s not and then dive deeper into your data to start making improvements for sales growth.
Now that you know which sales KPIs are most important, you’re ready to be a metric master. Get started with Cyfe now for FREE! Customize your own sales KPI dashboard with what matters most to you and your business.