Sales KPIs: Top 18 Sales Key Performance Indicators For Modern Sales Teams
Published 2021-11-29, updated 2023-10-03
Summary - Modern sales teams are driven by a collaborative spirit and an awareness of metrics and KPIs. Here are 18 of the most common sales KPIs.
Sales have always been about influencing through relationships.
While some basic sales KPIs remain in place, modern sales teams now embrace new, dynamic KPIs to track their performance. Let’s look at SaaS, for example.
SaaS focuses on month-to-month product and service offerings. This business model means that sales teams are no longer judged by landing huge one-off deals. Modern sales teams focus on turning sales-qualified leads into customers, and expansion MRR and customer retention rates.
All KPIs will help sales teams—and their companies—grow.
Why Are Key Performance Indicators (KPIs) Important In Sales?
KPIs aren’t just about mere numbers or statistics. They can help identify patterns, predict trends, and guide strategic planning in a sales context.
Here’s why they are indispensable:
At the core, KPIs provide an objective assessment of how well (or poorly) a sales team is performing. They are a yardstick to measure sales effectiveness against set targets and industry benchmarks.
Make smart decisions
If you’ve been in business long enough, experience has probably given you a good sense of intuition. But, complementing this with a data-driven approach can significantly enhance decision-making. KPIs provide the necessary data to make informed decisions. It can help direct the sales team's actions and help manage expectations.
Identify strengths and weaknesses
KPIs can shed light on the areas where your sales team excels and areas that need improvement. Regular tracking of these metrics enables you to fine-tune your strategies, address weaknesses, and build on existing strengths.
Determine motivation and alignment
KPIs can serve as a motivation for your sales team. They provide clear, quantifiable objectives that they can strive to achieve. Additionally, KPIs ensure individual goals and tasks align with the broader business objectives. As such, it fosters unity and team spirit.
Forecast sales trends
KPIs can help predict future sales trends based on historical data. They allow you to prepare for peaks and troughs in your sales cycle, enabling you to plan and strategize better. Forecasting sales trends allows you to manage your resources more effectively and set realistic expectations.
Optimize sales process
By analyzing these metrics' data, you can identify bottlenecks or inefficiencies in your sales process and work towards improving them. This might involve refining your sales pitch, redefining your sales funnel, or rethinking your target market or product offering.
Establish a clear line of responsibility
KPIs help in clarifying responsibilities within the sales team. They outline specific targets for each individual, making it clear what is expected of them. This ensures accountability and helps in clearly communicating the tasks, goals, and expectations to all team members.
Assigning responsibility based on KPIs can help:
- Improve task management
- Enhance productivity
- Foster a sense of ownership and commitment toward achieving business goals
Allocate budget wisely
KPIs can also help in the effective allocation of your sales budget. They can provide insights into what areas are delivering the most return on investment and which ones require more attention and resources.
Monitoring your sales KPIs lets you identify the most profitable strategies and allow you to maximize your returns. Better budget allocation only optimizes financial resources. It also increases the overall effectiveness and profitability of the sales department.
Boost customer understanding
KPIs can tell you about customer preferences, purchase patterns, and feedback. It offers valuable insights that can be used to enhance customer experience and satisfaction. This can lead to stronger customer relationships and improved customer retention.
Gain a competitive edge
Understanding which KPIs are relevant to your competitors and where they stand can provide you with a significant competitive advantage. Compare your performance against industry benchmarks and competition to identify areas where you outperform or underperform. This can, in turn, guide strategic decisions to improve performance and gain a competitive edge in the marketplace.
How To Monitor Sales KPIs
You can measure your sales KPIs on a dashboard. A sales dashboard is a visual representation of your sales data that you can segment, filter, or view over different time periods. Most importantly, a sales dashboard displays your sales metrics and KPIs at-a-glance and in real time.
How To Create A Sales Dashboard
Sales dashboards can take the form of a spreadsheet or in a dashboard and reporting tool—or anything in between. A dashboard solution brings all of your important sales data together in one place and updates automatically so you’re using the latest information to make your data-driven decisions.
18 Things That Should Be On Your KPI Dashboard
Here are 18 of the top sales KPIs used by modern sales teams. Some of these sales KPIs may have overlapping qualities. The effectiveness and selection of each KPI should always depend on the business and marketing and sales models that are in place. Learn how to define your organization's KPIs.
- Sales Qualified Leads
- Sales Opportunities
- Number of Monthly Onboarding and Demo Calls
- Call Volume per Rep
- Sales Cycle Length
- Sales per Rep
- Contact to Customer Conversion Rate
- Trial Conversion Rate
- Sales Bookings
- Lead-to-Win Rate
- Average Cost per Lead
- Customer Acquisition Cost
- Average Selling Price
- MRR Growth Rate
- New and Expansion MRR
- Customer Lifetime Value
- Retention and Churn Rates
Trials is a KPI that applies to both marketing and sales. Trials count the number of accounts that start within a specified period of time. This KPI can serve as a way to rally marketing and sales to work together. The higher volume of trial starts that marketing can encourage, the higher volume of leads that sales can qualify and eventually close.
Furthermore, this KPI helps you identify how well new features or updates to your software resonate with potential customers. Assessing the rate and feedback of trials shows you the product aspects that need improvement. It offers a real-time feedback loop. As such, it enables sales and marketing teams to tweak campaigns and messaging for optimal performance.
2. Sales Qualified Leads
Sales Qualified Leads (SQLs) are a direct result of trials. Sales teams qualify trials as Sales Qualified Leads when a lead meets certain conditions defined by the sales process. Before becoming an SQL, they are identified as a Marketing Qualified Lead. Sales Qualified Leads are prospects who signal intent to buy. This KPI is important for sales teams to track because the larger your pool of SQLs, the larger the pool of opportunities that could convert to a customer.
Monitoring SQLs regularly provides valuable insights into the effectiveness of lead nurturing campaigns. Thus, it allows teams to refine their strategies to maximize conversions and optimize resources. Understanding the source and quality of these SQLs can further optimize lead-generation techniques. As a result, you can ensure a steady inflow of potential clients.
3. Sales Opportunities
You might be asking yourself, "What's the difference between a Sales Qualified Lead vs Opportunity?"
Opportunities allow sales teams to see all pending opportunities and determine which opportunities are high-intent and worth pursuing.
This sales growth KPI organizes prospects based on opportunity value and the probability of a closed deal. Each prospect has an estimated purchase value associated with them to help your team prioritize their efforts.
Sales prospects can be ranked according to the likelihood of wins, assuming the sales team has collected enough data from their current customer base to have an understanding of what makes for a probable close.
Understanding the value of your sales opportunities enables the prioritization of high-value prospects. With this, you ensure the team's efforts yield maximum returns. Plus, it ensures you're allocating resources effectively and not missing out on potential big wins.
4. Number of Monthly Onboarding and Demo Calls
Onboarding calls signify how many onboarding and/or demo calls the sales team completes in a month. Onboarding and demo calls can be a critical step in closing a deal, so this sales enablement KPI is an important one to track.
Like many of the KPIs throughout this article, you can segment this metric to track individual employee performance.
Moreover, these calls can be an excellent opportunity to gather feedback directly from prospects. As such, it gives sales and product teams actionable insights to improve offerings and tailor pitches. Establishing a structured feedback mechanism post-call can further enhance the quality of information gathered.
5. Call Volume per Sales Rep
For outbound teams, call volume is a look into how many calls (or outreach like email) each sales representative has made to potential customers.
This KPI can be further broken down into whether the call was answered (or the email was opened), the length of time spent on each call, the level of interest, and how many potential prospects were discovered per # of calls.
A regular review of this KPI can also offer insights into the overall health of the sales pipeline. Additionally, it can highlight any potential training or resources required for reps to be more effective. Lastly, it provides an avenue to recognize and reward top-performing sales reps, fostering healthy competition and motivation.
6. Sales Cycle Length
How much does the average sale generate, and over what length of time? Sales cycle length helps sales teams see, on average, how long it takes to close a deal.
This sales growth KPI will help you set sales targets and forecast revenue while providing a timeframe and required efforts and resources required on average to win each customer.
Assessing this metric regularly enables sales managers to identify bottlenecks in the sales process. As a result, they can work towards streamlining operations to reduce the sales cycle. This also assists in setting realistic expectations for stakeholders regarding sales outcomes.
7. Sales per Rep
Sales per employee, or sales per rep, allows sales leaders to see, on an employee level, how many sales were made per rep. This KPI can be helpful in establishing a sales baseline (and setting personal goals) and determining the strengths and areas of improvement for each rep.
For example, a sales representative may take a longer time to close a deal, but the deal could be higher value and retain the customer longer.
For the sake of sustainability, it's important not to use the sales per rep KPI to create a culture of competition and comparison between reps but instead use it as a performance metric per employee.
Continuous monitoring of this KPI can also help identify training opportunities. This ensures that every rep is equipped with the skills and knowledge to perform at their best. This approach fosters continuous learning and development within the sales team, elevating overall performance.
8. Contact to Customer Conversion Rate
Contact-to-customer conversion rate is a modern sales KPI that tracks the number of contacts that have converted to sales. Contacts are typically existing customers, past customers, or qualified leads who have some form of a relationship with your business.
Sales teams should use this sales conversion KPI to quantify how efficiently the sales process secures and grows existing customer relationships. They can also use this KPI as a way to evaluate customer relationship management.
Sales teams can identify the most effective channels and refine their strategies by segmenting this KPI based on different customer touchpoints. This granular approach can uncover hidden opportunities or underutilized channels. As such, it maximizes the reach and impact of sales efforts.
9. Trial Conversion Rate
The trial conversion rate measures the percentage of users that have converted to a paid account from a trial. While this KPI may only be applicable to SaaS sales teams, it’s still an important one to keep an eye on.
Trial conversion rate can help to identify your target audience, too. By looking at trial conversion rates, sales teams can identify the demographics and companies that are likely to have the highest success with the product and focus on attracting the highest converting users.
It's also worth noting that a sudden drop or spike in the trial conversion rate can be indicative of broader market trends or changes in the competitive landscape. Keeping a pulse on these fluctuations ensures timely interventions and course corrections.
10. Sales Bookings
Sales bookings calculate the total "wins" in a dollar value, as determined by either a close deal or a signed/committed sale within a specified time period. Bookings are a sales KPI that modern SaaS sales teams are driven by, and it can be split out into a variety of categories—such as sales bookings per region and sales bookings per employee.
Beyond raw numbers, understanding the context around sales bookings, like season or market shifts, can help in forecasting and strategic planning. This deeper dive into sales bookings can also provide insights into the types of deals being closed, whether they're new businesses or repeat purchases.
11. Lead-to-Win Rate
What's the ratio between closed deals and the number of leads? Lead-to-win rate helps sales teams understand product-market fit, pricing structure, and if the sales approaches taken should be used to close future deals.
This is a KPI that should be shared to align marketing, sales, and product teams. It’s also worth noting that lead-to-win rate is an account-focused metric, so unlike contact-to-customer conversion rate that measures existing customers, lead-to -win rate measures leads only.
Continual evaluation of this KPI provides a clear view of the evolving market landscape. It also helps refine the qualification criteria for leads. This feedback loop ensures that the sales team's approach remains agile and responsive to market demands.
12. Average Cost Per Lead
Cost per lead answers the question: How much does it cost for us to generate a single lead? Modern sales teams want to be efficient in their time and spending to acquire new leads. This sales KPI is important to track because it will impact your customer acquisition cost.
As a note, the most accurate average cost per lead KPI tallies up all marketing expenses (including employee salaries). Sectioning this KPI based on different campaigns or lead sources enables teams to optimize their marketing spend and focus on the most profitable channels. This aids in the iterative process of refining marketing strategies, ensuring a robust ROI.
13. Customer Acquisition Cost
Customer Acquisition Cost (CAC) is an important sales KPI because it measures the cost your business incurs to acquire new customers. Sales teams should care about this metric as it is calculated by adding all sales and marketing costs divided by the number of new customers in a specific time period. The lower your CAC, the higher your efficiency in acquiring customers. Sales teams should look at customer acquisition costs across customer segments to understand which customers are more profitable and which may take more time and cost to acquire.
Comparing CAC with Customer Lifetime Value (LTV) gives a holistic view of the profitability and sustainability of the sales process. Furthermore, trends in CAC can provide early warning signs of inefficiencies or rising costs in the acquisition process.
14. Average Selling Price
Average Selling Price measures the average value of each sale and, therefore, helps the sales team place a quantifiable value on each potential opportunity. Sales teams can apply this metric to a product or a service or even to an entire market.
This sales KPI, in conjunction with other metrics associated with pricing models, is how a sales team can estimate the true dollar value of each lead. Trends in this KPI can also signal shifts in the market. This allows sales teams to adjust their strategies proactively. A consistent analysis can also illuminate the balance between volume of sales and the value of each sale, guiding pricing strategies.
15. MRR Growth Rate
Monthly sales growth measures the increase or decrease of your sales revenue on a monthly basis. For most SaaS sales teams, the monthly MRR growth rate is a reasonable projection, although it can be expressed using an annual time frame.
Monitoring sales growth from month to month helps modern sales leaders see and act on sales revenue trends as they're happening versus reflective reporting. Setting attainable sales revenue goals both on an individual and team basis can inspire performance and keep sales efforts aligned.
Furthermore, this KPI can also be used to gauge the effectiveness of different marketing and sales campaigns, allowing for data-driven decision-making. An upward trajectory in MRR growth rate indicates a company's resonance with its target audience and market positioning.
16. New and Expansion MRR
MRR, monthly recurring revenue, is the number of paying customers multiplied by the average amount of all customers.
New MRR is the additional monthly recurring revenue that you gained over the month.
For SaaS businesses, expansion MRR is an important metric. Expansion MRR measures additional MRR from existing customers that have upgraded their plan.
The work of a modern sales team doesn't end with a closed deal. Nurturing a relationship with your existing customers can lead to both new and expansion MRR. As a benchmark, best-in-class companies achieve expansion MRR ratios that are anywhere between 20-40% of top-line revenue every month.
Tracking this KPI can highlight the effectiveness of customer success initiatives. As such, it emphasizes the importance of post-sales engagement. This also underscores the significance of nurturing existing client relationships, potentially leading to upsells or cross-sells.
17. Customer Lifetime Value
It's important for sales teams to understand not just the dollar value of the deal but how much revenue that closed deal brings to the company over time. This ensures they know the "true" impact of a win.
The Customer Lifetime Value KPI is calculated as:
Lifetime Value = Gross Margin % X ( 1 / Monthly Churn ) X Avg. Monthly Subscription Revenue per Customer.
Customer Lifetime Value is a popular metric beyond sales teams, too. Hear why LTV is important to founders on the Metric Stack podcast.
Also, understanding the LTV across different customer segments helps in tailoring sales and marketing strategies to target the most profitable demographics. Recognizing the factors that contribute to a higher LTV can guide efforts to enhance customer experiences and satisfaction.
18. Retention and Churn Rates
Churn and retention rates are important sales KPIs to track after the deal closes. Churn rate is truly the mark of how today's sales teams are changing. For many modern sales teams, the job doesn’t end after the deal closes. Sales takes partial responsibility for ensuring customers remain happy and don’t churn.
Moreover, analyzing the reasons behind churn helps sales teams identify areas of improvement in their offering or sales process. Thus, they can work proactively to enhance customer satisfaction. Reducing churn is beneficial for revenue and plays a pivotal role in brand reputation and word-of-mouth referrals.
How Can Sales KPI Be Improved?
Improving sales KPIs involves a continuous process of setting targets, tracking performance, analyzing results, and making strategic adjustments. Here's how you can go about this:
Set clear objectives
To improve any KPI, first understand your desired outcomes. Is it increased revenue, better lead conversion, or reduced sales cycle length? By clearly defining objectives, you can direct your resources where they're needed most.
Share these objectives with the entire sales team to ensure everyone is on the same page. A collective understanding of goals helps align individual efforts toward achieving overarching targets.
Regular company training
Regularly train your sales team on the latest market trends, products, and sales techniques. A well-informed and skilled salesperson is better equipped to meet and exceed targets.
Training should be an ongoing commitment, not a one-time event. Keep your team updated on new sales tools and methods, and continuously assess their skills to identify areas for improvement.
Use advanced analytics
Tools like CRM software can provide insights into customer behavior, helping you effectively refine your sales strategies and target potential leads.
Don’t just collect data; analyze it to identify patterns, trends, and opportunities. With platforms like PowerMetrics, you can get a real-time view of your sales metrics, ensuring that your decisions are data-driven and timely. Remember, data-driven decisions tend to be more accurate and yield better results in the long run.
Institute a system where salespeople receive continuous feedback on their performance. Constructive criticism and recognition of successes can motivate individuals to adjust their tactics and strive for better results.
Encourage a culture where feedback flows in both directions. Salespeople should feel comfortable sharing their observations and challenges with managers, fostering a collaborative problem-solving environment.
Understand customer needs
One of the best ways to improve sales is to understand the customer's needs. Regularly engage with customers, conduct surveys, and gather feedback to refine your offerings and sales pitch.
Truly understanding customer needs goes beyond surface-level conversations. Dig deep to understand your target audience's pain points, challenges, and aspirations, and adapt your product offerings and sales strategies accordingly.
Streamline the sales process
If your sales process has too many steps or is convoluted, it can deter potential customers. Review and simplify the sales journey, ensuring that it's straightforward and user-friendly.
Audit the sales process periodically to remove any bottlenecks or unnecessary steps. Streamlining improves customer experience and can make your sales team more efficient.
Collaborate with marketing
Sales and marketing teams should work in tandem. Both departments can amplify their efforts and drive improved results by sharing insights and collaborating on strategies.
Cross-departmental meetings can help ensure that marketing campaigns align with sales goals and vice versa. A cohesive strategy will often yield better results than isolated efforts.
Set realistic goals
While ambition is good, unrealistic KPIs can demotivate a team. Ensure that targets are challenging yet attainable based on market conditions and historical data.
When setting targets, always account for factors like seasonality, economic conditions, and competitor activity. Adapt them as needed to keep them realistic yet challenging, encouraging your team to stretch their capabilities.
Invest in technology
Embrace the latest sales technologies, from AI-driven insights to chatbots, which can help automate routine tasks and offer customers personalized solutions.
Moreover, evaluate the effectiveness of the technology you’re using. As new tools become available, be willing to update and upgrade to stay competitive and efficient.
Review and adjust
The sales landscape is ever-evolving. Periodically review your KPIs and adjust strategies as needed, ensuring they remain relevant and practical.
Conduct regular strategy review meetings to assess the effectiveness of current practices. Be open to change and encourage your team to bring new ideas to the table, making sure your sales strategies evolve along with market trends.
Track Your Sales KPIs On A PowerMetrics Dashboard
Now that you know which top 18 sales KPIs and metrics to track, you need a PowerMetrics dashboard. A dashboard brings all your data together in one place, provides visibility and transparency into your numbers, and can increase productivity with near-real-time insights. Get started with PowerMetrics today!
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