- What are sales KPIs?
- Advantages of a sales KPI-driven strategy
- What are the most common indicators in sales?
- Basic Sales KPIs
- Advanced Sales KPIs
- How to use technology to track and leverage your sales?
Sales KPIs show how well a company is doing in this area.
You probably know how many deals your company did, but can you pinpoint what factors have an influence on that result, or where and how you should act to do even better? Sales KPIs are literally the key to understanding this process!
What are sales KPIs?
Sales KPIs refer to the English acronym for Key Performance Indicators, a concept that can be translated as Key Performance Indicators. In short, KPIs are the metrics used to assess the success of an organization, or a specific department, as in the case of sales KPIs.
A company’s strategic planning can encompass several sales KPIs, going beyond the total number of deals closed to draw a detailed scenario about the operations carried out, and where improvements can be made.
It is important to highlight that not all metrics are sales KPIs, only those that can be associated in some way with the final objective outlined by the responsible team or leader. The same goes for other areas of the organization that works with KPIs in their strategy.
Facilitating objective measurement is a way to maintain the company’s good performance, both to continue ongoing projects and to adopt a culture of innovation. In this case, sales KPIs ensure that efforts to create new tools, products and processes are aligned with the company’s overall objectives.
The proper use of KPIs, in sales or other departments, requires an adequate understanding of the expected results, and which variables influence them. For this reason, the professionals involved in the implementation of key indicators must have the analytical and strategic capacity to deal with the data and the necessary decisions. For this, it is often necessary to carry out corporate training, so that everyone on the team is aligned with the new concepts.
Advantages of a sales KPI-driven strategy
From local commerce to a multinational giant, any company can only achieve healthy growth if it is guided by objectivity. Sales KPIs support a business intelligence strategy for this purpose.
Business intelligence, or BI, allows an organization to rely on data to decide, tending towards assertiveness and profitability in its operations. Sales KPIs are among the most important pieces of information in this regard, as they represent the practical consequences of what is being done.
The importance of a data-driven strategy becomes greater as the digital transformation makes markets move faster and faster.
Consumers can traverse sales funnels in minutes, leaving a valuable trail of clicks, views and comments that can be followed to find out where the sale has stopped and how to prevent it from happening again in the future.
This data also demonstrates the specific preferences and rejections of each potential customer, which can empower the sales team to deliver a personalized approach when the next contact is made.
A company that relies on sales KPIs to guide its movements also increases the team’s engagement, as each employee will know exactly what they are looking for, and how their efforts helped to achieve this goal.
What are the most common indicators in sales?
Looking at the right numbers is what makes startups and traditional companies find their way to success among the many challenges they face. Each organization, because they use different strategies, can also use different sales KPIs.
To get a more detailed look at their specific business, companies can use metrics at each step of the sales funnel. This allows you to see the entire process as a production line, identifying errors and how they impact the final result.
Here we list some common sales KPIs and the level of sales maturity in organizations that use them:
Basic Sales KPIs
Functional: These are sales KPIs that measure the effort implemented by the team, but do not directly track the result. Companies with little maturity have an almost restricted focus on them, while the more structured ones use them as a basis for more detailed analysis.
These include data such as the number of calls made by the sales team or emails sent, how many attempts were made to contact a potential customer, how many of these contacts are answered, etc.
A number of deals made: Every organization with some tracking of results is able to quickly report how many customers it has obtained in a given period.
Advanced Sales KPIs
- Conversion of visitor into lead: Among the people who go to your store, social networks, websites or events, how many show interest in your products and services, providing a means of contact to receive more information?
- Lead to sale conversion: Within the above group, how many people actually bought something? These sales KPIs together tell you how many people you must attract to have a conversion.
- Leads in your sales pipeline: How many people are “targeted” by the marketing and sales teams each week/month?
- Customer Acquisition Cost (CAC): How much does the company have to invest to close with a customer? Just add up all your marketing and sales investments, divided by the total number of customers.
- Average Ticket: How much does the company receive, on average, for each sale made?
- Lifetime Value (LTV): The average value generated by each customer over the course of their relationship with the company, is a key sales KPI for organizations dealing with subscription services and other recurring business models.
- Sales Cycle Length: How long does it take between a salesperson’s first contact with a customer and closing the sale?
The length of the cycle, paired with conversion numbers and the number of leads in your sales pipeline, brings predictability to the organization.
With this data, it is possible to know how fast the sales engine is working, when it needs to go faster to reach the goals in a certain period, or when the team must be expanded to meet demand, for example.
How to use technology to track and leverage your sales?
We’ve already talked about the information trail left by potential consumers. It is the foundation of big data, which involves the processing and analysis of information on a large scale. Promoting this analysis can be a challenge for companies, as each person can create dozens of data per minute.
That’s why the success in using sales KPIs in a current scenario requires the use of software capable of working in customer relationship management, such as CRM PipeRun.
CRM PipeRun handles the data, delivering intuitive and organized reports with insights for the sales team to get the best values on KPIs we’ve just seen, such as conversions, average ticket, and LTV.
These same insights can guide objective and innovative projects, directing each professional in the sales team and in other areas of the company related to their success. For this, innovation management software is the best indication.
Understanding sales KPIs is understanding how a person becomes a customer of your company, creating processes that can be repeated and improved to achieve increased performance.
An organization that doesn’t work with this analytics model is advancing in the dark, and may even find its goal by luck, but it won’t get very far when its competitors use sales KPIs to know exactly where to step!