KPIs – Key Performance Indicators need to be measured and re-planned regularly to align to changing business needs and goals.
By measuring KPIs, sales leaders can measure the success of their team. Whether you are an entrepreneur or a business manager, you already know what a KPI is, and how valuable it is for your sales teams.
But, if you need a quick overview again:
What are sales KPIs?
KPIs are useful to measure the performance of your sales teams. Sales KPIs measure and inform you how your sales teams are performing, helps you identify areas for improvement and allows you to keep track of your sales teams overall progress, effort and tasks. With sales KPIs at hand, there is no need for you to go through the endless pages of stats, figures and spreadsheets, you can easily choose a small set of measurements to be reviewed on a regular basis.
Not every sales KPI can carry the same weight and similarly, every business requires a different set of KPIs to measure the performance of its sales team. The following are some top sales KPIs, which are crucial key performance indicators demystifying the process of reading sales numbers. They may help you prioritize the most important figures of your business.
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1. Sales Volume by Location
Striking a comparison across all locations, marketers can find out the place where the demand for their products and services is highest or lowest. For instance, if sales volume is large in region A, perhaps there is a high demand there. In such cases, you can further plan to add customization to the products and services to boost sales further. Places where demand is still low, it is a good option to try A/B testing, use techniques like shelf-displays, discounts, demos or coupons and so on.
2. Sales revenue
One might argue that revenues do not tell you as much about company’s health as net profits, but the total amount of money coming into the company gives you a lot of insights. A marketing manager will know the effects of various marketing plans with the help of sales revenues.
Marketers know the calculation of sales revenues. After adding up all the costs, you can have clear idea of the figure. A regular calculation of this figure would help the marketing/sales team to identify the effects of various marketing and sales campaigns on the net sales revenue.
3. Prospecting Activity
Sales-Marketing activities and the effort, time and resources spent on each are very important performance indicators. It is essential to measure the efforts put forward by the sales teams and identify the number of leads converted. One can keep track of client calls, emails, meeting with prospects, product or service demo and so on.
Prospecting Activity is a cloud of KPI and not a single metric. Sales managers must compile and track these elements and this should be reported on a daily basis.
4. Funnel Flow
Sales funnel is a critical component of your marketing activity and it should move smoothly. When it comes to funnel flow, you should see:
- How many people enter your sales funnel over a given period?
- How quickly the sales teams are responding to the leads?
- Are the salespeople connecting leads with marketing collaterals?
The marketing managers must track their analytics to find out how often leads get in touch with their brand on social media, through emails and with the help of other lead magnets.
The target should be to meet the expectations of the customers, convert the right percentage of leads, and bring enough new revenues to cover expenses and allow for a significant margin.
5. Customer Retention
Customer retention has always been the best performance indicator. Once a customer comes to your brand, he should stick to it for long. The number of customers coming back to you for their requirements will decide the success of your marketing efforts in real.
Of course, you will see a change in customer volume over a certain period of time. Some would go away, but some new ones will join the funnel. The final number you get is the most important sales KPI for evaluating sales performance.
For different teams, the KPIs will be different and it is up to the organization to choose the ones that are important to them.
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