Leading Sales Operations is challenging; you’re managing people, technology, and processes. The one thing you should be able to rely on is the numbers. They tell the story of how well your sales team is performing against organizational goals and industry standards.
What Sales KPIs are the most important? Every organization is different, and there may be particular metrics you may want to measure that reflect your sales team’s processes and technology. Here, we present standard sales KPIs that every sales organization should measure. Use these metrics as goal-setting benchmarks and to help determine areas where improvement is needed.
Help Your Sales Team Succeed: Focus on These 7 Revenue Success Metrics
Thanks to the folks at Toggl for this great list of Sales KPIs. The following KPIs are standard, though some may carry more weight than others. Set goals and track your team’s performance over time, making adjustments to processes and sales technology, and providing training when necessary to help your sales team succeed.
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Gross & Net Profit Margins
Gross and Net Profit Margins are where the rubber meets the road. They are essential in determining a company’s viability.
Gross Profit = Net Sales – Cost of Goods and Services (COGS)
Net Profit = Gross Profit – (Total Operating Expenses + Taxes + Interest + Depreciation + Amortization)
Many factors contribute to the calculation of profit margin. For additional details on how to calculate Gross and Net Profit, check out Toggl’s article that includes an in-depth overview of these crucial KPIs.
When calculating Sales Revenue, first, you’ll want to determine revenue for each product and service you offer. Factor in volume pricing, discounts, and refunds. The basic equation is:
Price Per Unit Sold x Number of Units Sold = Revenue
Track the time and effort required to source and follow up with leads, and report this information consistently, noting any outliers.
- Client calls/emails
- Meetings with prospects
- Product/Service demos
- Any other applicable activities
You want to determine how smoothly prospects move from one step in the funnel to the next. Lag time or low engagement in one area indicates opportunities or improvement.
- Leads qualification stages
- Average lead response time
- Content engagement throughout the funnel
- Qualification ratio between funnel stages
It’s essential to measure the change in customer volume over a period of time. A negative value is cause for concern and should be addressed immediately.
CG* – CL* = C*
*CG = Customers Gained
*CL = Customers Lost
C* = Customers lost or gained (could be a negative value)
Customer retention is crucial to a thriving organization, especially for subscription-based businesses. Churn rate determines whether or not you are gaining more customers than you are losing, and are a vital KPI for customer success teams to track.
Customer Churn = C* / T* x C
C* = Customers lost/gained
T* = during a period
C = Customers
Year-to-Date Sales Growth
YTD Sales Growth indicates the percentage change in sales volume over a period of time.
(VC* – VS) / VS x 100 = V%
*VC = Current Sales Volume (or number of customers)
*VS = Volume of Customers (previous number of customers)
Who Benefits from Setting Sales KPIs
Sales managers need to be able to respond to market influences as well as organizational performance. Without a clear picture of your business, forecasting and adjustments become guesses. There’s no room for guesswork when business success is on the line.
Sales teams need a clear roadmap to achieve their targets. With sales KPIs as their north star and the right sales technology to help them achieve their goals, they will always know where they stand and where improvements are needed.
Base KPIs on Sales Activities
Superoffice recommends breaking your sales process into measurable activities. Each activity contributes to a KPI. Set goals for individual sales activities. Those activities, carried out over time, help sales teams achieve their KPI targets. Some examples include:
- Holding x number of meetings with new prospects
- Sending out x number of sales proposals
- Conducting x follow up calls
Monitor, Review, and Adjust Your Sales KPIs
You can’t “set it and forget it” when it comes to Sales KPIs. If you set our KPIs at the beginning of the year and then don’t track and review your progress until the end of the year, you’ll miss 12 months of opportunities to make adjustments and steer the ship in the right direction.
Set up dashboards, sync with your CRM, and track your team’s progress. Give them visibility into how they are doing so they can self-manage and be accountable for their individual results.
Achieve Your Sales KPIs with DealStack
DealHub’s deal acceleration platform is a connected DealStack, and it will help your sales teams achieve their KPIs through a highly personalized and streamlined sales process that produces unified data insights into every buyer engagement.
DealStack allows sales teams to work with all of their sales technologies from within their CRM, as one workflow, rather than working with separate silo software solutions. Working from a unified cooperative platform inherently increases efficiency and productivity. Unified insights gathered throughout the buyer’s journey enhance your ability to track your sales team’s performance and improve the sales process.
Learn about the benefits of using a Deal Acceleration Platform.