10 Sales KPIs Every Salesperson Should Track
Business performance depends on monitoring and measuring productivity, and for sales teams, every activity has to be measured and tracked to achieve the desired results.
In the field of business, metrics are used to ensure that outcomes align with the business objectives. However, metrics also measure performance, they also help in planning and decision making, tracking, analyzing, and course correction.
Sales metrics give you an update on the sales process and whether it’s making a difference or not. If you want to measure your performance you must track it. And of course, to do the tracking you need these essential tracking metrics to measure performance and productivity as well as help you make informed decisions that will help you to grow your business.
Sales KPIs and metrics that every sales rep and manager should know
1. Sales Growth
This is the measure of the growth of your business. You can say it is the most important KPI for your business. A positive sales growth is directly proportional to business growth, and the reverse is true.
Improve sales growth through:
Knowing your goals
Directly addressing consumer needs
Listening and acting
Employ social media
Give out some offers
Monthly sales growth measures the increase or decrease of your sales revenue on a monthly basis.
Monitoring month-to-month sales growth helps you understand the trends of growth a draw up plans to improve any downward trends.
2. Sales Target
Are you on track regarding meeting your targets? It is imperative you know if you are on track to achieve your goals. A sales cycle will help you understand the length of time in making a sale.
A sales target is the number of products you need to sell to make the desired profit. Sales teams thrive on well-defined sales targets. - Business Queensland
This 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.
3. Sales Per Rep
With this KPI, sales managers and business owners can be to track the individual performances of their sales reps regarding sales closed.
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.
Owing to the value of the business that each sale comes with, this KPI is useful to understand performance per employee, and not build competition between sales reps.
4. Customer Acquisition Cost
It is the measure of how much it costs to bring in a new customer. 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.
5. Cost Per Lead
This is the measurement of how much the business spends to land a lead. It is a KPI that gauges the performance of your marketing strategies.
This sales KPI is important to track because it will impact your customer acquisition cost.
6. Customer Retention Rate
Business with a customer doesn't stop with signing on the dotted line. Research by HBR shows that improving customer retention rate by 5% boosts profits by 25%. Therefore, customer retention is an essential aspect of the survival of organizations.
Business people who understand the value of Customer retention always strive hard to ensure that their customers get the best experience to keep them as their existing buyers.
Essential action points to help you grow your customer retention rate;
Give gifts to your customers like capes, umbrellas and more.
Send out appreciation messages and emails to your customers after shopping.
Put in place a referral program that benefits potential existing buyers and new customers.
Give loyalty points to customers after making purchases.
7. Monthly Recurring Revenue
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.
8. 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.
9. Lead-To-Win Rate
What's the ratio between closed deals and the number of leads? The lead-to-win rate helps sales teams understand product-market fit, pricing structure, and if the sales approach is 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 the lead-to-win rate is an account-focused metric, so unlike the contact-to-customer conversion rate that measures existing customers, the lead-to-win rate measures leads only.
10. Average Response Time
If a lead is flagged as qualified by your marketing team, or if that lead indicates interest by filling out a form, there's no time to waste and no need to keep the lead waiting. Always benchmark response time and encourage reps to improve it. That way, they're catching leads while the pain or problem is top of mind.