“Increase company revenue by 20%.” Let’s suppose this is the goal of an organization, and while that’s a great goal to aim for, it fails to tell individual departments and team members what actionable steps they can take to help the company reach that goal.
While the performance of your sales team is reviewed by your sales manager/sales leaders on their sales dashboard, by knowing key performance indicators for your sales processes, you and your sales managers/sales leaders can receive useful information that can help sales activities and further the company goals.
Anytime is as good a time as ever to begin monitoring your sales KPI if you’re not already doing so, then you must start now. If you want to boost your sales performance, then keep reading, as this article will provide the sales strategy you need to skyrocket your sales revenue.
What is KPI?
Key performance metrics, which are sometimes also known as performance indicators. KPI can apply to many different areas, such as a company initiative, sales opportunities for a new product or service, a fresh company program, or even a project launch. Your company may decide to measure performance metrics on an individual level, by a team, by division or department, or even for the company as a whole.
When tracking metrics for a long term, you can show qualitative and quantitative values in your sales data, both of which are useful for determining the success of a project, campaign, or even a team or individual. When we talk about qualitative values, we’re referring to those that take into account opinions, tastes, and personal feelings while still being presented as a textual or numeric value. While it may seem unnecessary to review qualitative values, they’re very much a part of your company’s success.
Besides qualitative values, there are also quantitative values or facts when tracking sales KPIs. Unlike qualitative values, which are a little more personal, quantitative values are typically numeric and free of interpretations and personal feelings.
What is KPI in sales?
Sales KPIs refer to the metrics your company that tracks in real-time as about your sales team and their performance, either individually or in their entirety.
The metrics include the methods used to initiate contact with quality leads, interest them in your products and services, convince them of the purchase value, pitch a sale, and then convert the lead into a buying customer throughout the sales pipeline. From the beginning of the sales funnel to the end, KPI for sales gives you a deep and relevant look into every part of the sales process.
How to measure sales KPI?
- Sales by campaign
You need many sales campaigns under your belt before you can begin measuring the right Sales KPIs and metrics like incremental sales by campaign. For every marketing campaign your company launches, you can see how many sales were made to determine which campaign was the most lucrative. To calculate your incremental sales by the campaign, taking your baseline sales, and subtracting them from your newly generated sales is a great way.
- Revenue per sales
This metric for Sales KPIs is quite a lot like profit margin per sales, except it’s more about numbers than percentages. With revenue, you would count how much money every sales team member generates for the company. You or your account managers can track this period over weeks, months, or even years if the data goes back that far.
This metric also gives you the freedom to compare current sales periods against past ones to see if certain trends emerge throughout the year that may affect selling.
- Lead conversion Ratio
Every one of your customers began as a lead at some point until they progressed through the sales cycle via a sales team member. The main goal of the sales reps is to make money, yes, but also to convert qualified leads to customers. This allows the customer to understand the purchase value and become a repeat buyer that earns the company money over the long-term, not just one time.
The lead conversion ratio displays conversion rates as both a ratio and a percentage. This lead conversion rate percentage can be tweaked to be indicative of an individual’s performance or that of the sales teams.
- Website conversion rate
Like every other, your company has a website that attracts traffic in the form of leads and customers. You wish to convert those qualified leads, but how well does your website excel at this? With the website conversion rate metric, you don’t have to guess anymore, as the conversion rates data will be right in front of you.
- Customer lifetime value
If there’s one must-have metric you absolutely should not skip out of all these, it would be the Customer Lifetime Value. This relates to how long your existing customers have stuck with you and continued buying your products and services.
You can see such information in the Customer LTV as the total length of time a customer has purchased from you and how much money they’ve generated for you over time. If you want, you can even break this information down month by month or year by year. Every company wants an army of long-term buying customers and knowing your Customer’s LTV will let you make a game plan for how to get these paying customers.
Now that you have understood the whole process of KPI, let’s understand how a B2B sales team can define which sales metrics are most important to meeting your KPI sales goals?
Having a strong Sales KPIs format and staying goal-minded will allow you to take the sales performance metrics data you have and pull it together into something complete.
- Identify the main objective
The company needs to select its objective or goal to keep the process of defining your B2B sales KPI. As the company grows and expands, many companies change their objective but when initially the company starts, they want to acquire as many customers or bring as much revenue as possible.
Once you’re more established, then customer maintenance will become a bigger objective, as you wish to hold onto a group of loyal, buying customers over the long-term. No matter what your primary goal or objective is, it’s important to select up to two smaller goals with it. These typically relate to your main objective, but their significance may be somewhat smaller.
- Focus on the goals
Now that you selected your objectives and goals, it’s time to be strict on the plan you have created, testing out the smaller details. If you want to increase your annual sales opportunities, for example, then you would want to take the approach of going month by month, adding pieces to the whole that is the right sales goal. You can get more specific than that, calculating what a realistic annual income might look like for your company at this stage. From there, you can take that number to set the monthly sales goals your company should work towards.
- Action + Planning
Okay, so you have your goals sorted and you’ve drawn up some numbers you’re working towards (be those revenues, conversions, or the like). Now comes the time to put this plan into action, deciding what your sales and marketing teams would have to do to meet the primary objective.
Does it require revamping the sales process, marketing more heavily, executing follow-ups, or changing tact with leads or customers? Maybe you need to increase how many leads you mail from your email list or cold calling to increase the prospects entering the sales funnel by sharing their email address or other contact information.
- Select your Metrics
It’s time to check through those important KPIs for sales activity and choose the ones that are most relevant to you right now. For example, your company wants to increase annual sales opportunities by boosting monthly revenue. In that case, then the Sales KPIs that may catch your eye would be the cross-sell and upsell rates, the margin of profit per sales rep, revenue per sales rep, average sales cycle length, average revenue per unit, sales target, or sales growth.
Key performance indicators or KPIs benefit businesses of all kinds, but if you’re looking to increase your sales opportunities, revenue, conversions, and long-term customer base, contact FunnL, a platform that helps to bring business intelligence to all the key executives, sales, and business development professionals in the company to make strategic decisions. The reporting and analytics section delivers the best insights and KPIs which is the cumulative result of multiple data sources and data points captured from the sales lead generation campaigns. Book your appointment!