The challenges facing sales departments are constantly fluctuating and eminently unique. This is why this top ten list is a rough blueprint for constructing key performance indicators (KPIs). Certainly, each of the items on this list represents an important area of your business to monitor, but simply applying these metrics is not enough. Each organization needs to carefully craft its sales KPIs to reflect and reinforce its strategic vision to influence behaviour.
So, while this month's top ten list offers a template for building sales KPIs, the real work for your organization is designing KPIs that align with your organization's goals, strategies, and tactics. Here is this month's top ten metrics to help get your started:
Sales Metrics – The top 10
Top X in Sales Revenue.
This KPI measures and ranks your top performers (products, reps, cities etc.) based on sales revenue, so you can know where your heavy hitters are. Variations on this could show top performers based on profit margin, or revenue per transaction. Viewed over the past year provides a strategic account of top sellers, whereas a tactical view can be achieved by focusing in on top selling products today. Consider displaying this KPI on a table or in bar chart. Benefit: Know your top performers. Audience: Managers, Executives Calculation: Rank top 3/10/25 performers by sales revenue Example: Best Sellers = Item 1, $2.3 million; Item 2, $1.9 million; Item 3, $1.5 million...
Bottom 10% of Products by Sales.
This KPI measures and ranks your least successful products based on sales revenues. This KPI is a must-have for organizations wanting to either bolster poor sales or phase out products that simply aren't performing well. Use this KPI as a template for other metrics such as bottom 10% of reps by profit margin. Consider displaying this KPI on a table or in bar chart. Benefit: Know which products need to be reassessed. Audience: Executives, Managers Calculation: Rank each product based on amount of revenue from least to most Example: Poor Performers = Item 1, $0.1 million; Item 2, $0.21 million; Item 3, $0.29 million...
Percentage of Sales Growth.
This KPI measures sales growth over a set period of time. Ensure your measurements are calculated on an appropriate time period, long enough to avoid being fixated on constantly fluctuating numbers, but short enough to uncover trends. What really matters is the big picture, so use this KPI to monitor sales over the long term. This KPI would be best displayed as a simple value or number and a sparkline to visualize past performance.
Benefit. Gain insight into long term sales trends. Benefit: Gain insight into long term sales trends. Audience: Executives, Managers Calculation: (Current period sales revenue - Previous period sales revenue) / Previous period sales revenue Example: ($20.5M Q3-2011 - $18.3M Q2-2011) / $18.3M Q2-2011 = 12% Sales Growth Q3 compared against Q2
New versus Repeated Business.
This is the ratio or measure of sales made to new customers compared to loyal or repeat customers. This metric is measured over time, preferably on a monthly basis, in order to properly view trends based on revenue for each type of customer. Although a ratio could be used for this metric, a line graph will visualize the trends over time. Benefit: Gain insight into customer trends and focus your energy where it matters most. Audience: Sales Reps, Managers, Executives Calculation: $15M New to $8.4M Repeat = 1.8:1 New to Repeat Example: 1.8:1 New to Repeat Business or a line chart with two series (new and repeat business over the past x months)
Customer Loyalty
This KPI measures your organization's customer retention. Customer loyalty is a critical factor in the success of any organization (especially for monthly or annual renewals), and explains why so many businesses invest heavily in customer loyalty programs. A simple numerical value KPI is enough to show the basic figure, but a line chart may provide more insight into trends that can be correlated with campaigns and events. This metrics is also called Retention, or Attrition (if reversed). Benefit: Determine how many new customers you are turning into loyal customers. Audience: Sales Reps, Managers, Executives Calculation: 1 - (Number of customers who cancelled or did not renew during the period / by the total number of customers) Example: 1 - (35 / 2,482) = 98% Customer Loyalty (Past 30 days)
Sales Per Sales Rep or % on Quota.
This metric measures the revenue each sales representative is generating. This KPI applies to fully ramped up reps, and is generally measured over the course of a month or quarter in order to provide an accurate measure of an individual representative's performance. This basic KPI model can be leveraged to provide additional details such as type of customer (new/repeat) or normalized to track performance against target quota for the period. Consider a bar graph representing each sales rep. Benefit: Gain insight into each rep's performance based on sales revenue generated. Audience: Sales Reps, Managers, Executives Calculation: Actual Sales / Quota Amount = Percentage on Target Example: $23,250 / $28,000 = 83%
Sales by Contact "Method X".
This KPI monitors which contact methods are generating sales, such as by email, telephone, or in-person contacts. Determining the most successful method for contacting customers is about as important as a KPI as you can come by. If driving or flying out to meet a customer proves to be your organization's key to success, then you need to utilize that. By the same token, if your phone calls yield no results, then it is best to change how you contact prospects. A bar graph is great for displaying a KPI like this, and by using a bar graph, you can also incorporate information such as sales per rep (KPI 8 above). Benefit: Learn what contact method works best for your organization and capitalize on it. Audience: Sales Reps, Managers, Executives Calculation: For each contact type: # of sales / total # of contacts (email, calls, visits) Example: Email contact = 183 wins / 1,524 contacts = 12% win rate
Quote to Closing Ratio.
This is the number of formal quotes compared to sales closed. A formal quote is preferable over an informal verbal quote because it demonstrates a specific level of customer interest by moving beyond ballpark figures and stepping up to the proverbial plate. Alternative KPIs here are opportunity to close ratio, lead to close ratio, ratio of closed deas in 30/60/90 days, etc... Benefit: Learn whether you are losing genuine sales leads based on quotes. Consider displaying this KPI as a simple number value. Audience: Managers, Executives Calculation: # of wins / # of quotes Example: 74 wins / 183 quotes = 40% win rate
Units or Revenue Per Transaction.
At its most basic level, this KPI measures the amount of items sold in each transaction, but this KPI can provide a very granular look at what you are selling. Consider tracking the UPT of each type of customer you handle, as well as tracking this KPI over time for these groups. Use this KPI to align sales strategy and even target promotions to key customers. There are multiple ways this KPI can be displayed depending on how much detail you want to include. Try using a line graph for to show trending, or a simple number and goal amount. Benefit: Determine the amount of units per transaction to learn more about your customers. Audience: Executives, Managers Calculation: Total # units sold / Total # of transactions Example: 235,288 units / 13,982 transactions = 16.8 units per transaction
A) Sales Quota Attainment.
This KPI measures the ability of your organization to meet its sales quota, and is married to another KPI: Sales Forecast Accuracy. Using a KPI like this is ideal for keeping your monthly or quarterly targets at the forefront of your mind. This KPI can serve as a model for more detailed KPIs such as regional sales quota attainment, product sales quota attainment, or sales rep quota attainment. Consider using a gauge visualization to display the quota against the current performance. Benefit: Keep on top of your sales quota day-to-day to support tactical decisions. Audience: Sales Reps, Managers, Executives Calculation: Sales in period / Quota for period - OR - (Sales in period - Quota in period) / Quota in period Example: $230K sales / $300K quota = 76% - OR - ($230K sales - $300K quota) / $300 quota = -23%
B) Sales Forecast Accuracy.
This KPI measures the ability of your organization to accurately predict a sales quota for a given period of time, and is married to another KPI: Sales Quota Attainment. If your sales quota attainment is low, perhaps it isn't the result of your Sales Reps performance, but unrealistic expectations. This KPI can keep overly ambitious predictions in check, since setting unattainable goals can prove to be a drain on morale. Consider using a gauge image to display the quota against the current level of attainment. Benefit: Learn what are realistic goals to challenge and keep attitudes positive. Audience: Sales Reps, Managers, Executives Calculation: Sales in period / Quota for period - OR - (Sales in period - Quota in period) / Quota in period Example: $230K sales / $300K quota = 76% - OR - ($230K sales - $300K quota) / $300 quota = -23%
