One of the pillars of the success of a business is its administration. Knowing how your company is performing is essential to be able to create effective strategies and work on what really works.
With professionals focused on converting market opportunities, the best allies are sales KPIs. They accurately show the result of each action taken and the consequences on the business.
If you want to know more about sales KPIs and how to use them in your business, follow this post.
We are going to show you the 7 main ones and how they can be applied in your company.
The importance of sales KPIs
How do you control the numbers of your company? Do you have an extensive list of indicators or do you simply prefer not to follow them?
Some entrepreneurs have the idea of monitoring all the numbers generated by the company, systematically, almost like an obsession. This is not necessary. Actually, it’s not the right thing to do!
Maintaining a high number of indicators can generate great confusion, in addition to wasting time with little or no relevant data. In that sense, you should only concern yourself with the essential indicators, the KPIs.
Key Performance Indicator (KPI or key performance indicator, in Spanish) is the metric used to monitor the performance of your business. Each company defines its KPIs and the rule is to discover what directly influences the objectives set.
For sales, good examples of KPIs are:
- number of leads generated;
- number of qualified leads;
- conversion rate;
- Average ticket;
- CAC (customer acquisition cost);
- number of completed deals;
- sales cycle.
To make each KPI clear, we are going to show them separately and show you how to apply them.
Top 7 Sales KPIs
1. Number of leads generated
Leads are potential customers, those who are interested in the solution that your company offers. These must be captured and converted into customers.
Remembering the sales funnel, it is interesting to highlight the number of leads generated as one of the sales indicators to evaluate the performance of marketing actions, the sector responsible for generating opportunities.
With this control, you will be able to see if the actions at the top, middle and bottom of the funnel are being effective, that is, generating a good number of leads for the sales sector.
To control this indicator, you must look for data on potential customers, whether it is with the registration in the newsletter, downloaded content, registration in events, among others. This way you will have a list with the data and the total number of leads generated in a certain time.
2. Number of qualified leads
The Buyer’s Journey and the marketing funnel must be built together, in order to create a good path so that your potential customers can search for all the necessary information about your products or services offered.
In this way, you will be qualifying the leads, that is, giving them all the necessary knowledge to make the purchase decision.
Investing in lead nurturing is essential for the sales team to maintain a good conversion rate.
During the discover, understand and consider phases, they will have access to all the data necessary to reach the purchase decision with the sales team.
To control that indicator, you must calculate how many potential clients, you and your team, have sent a sales proposal, such as a quote.
3. Conversion rate
Conversion rate is one of the most important sales KPIs. Evaluate the efficiency of your team, relating the number of opportunities generated and those that will actually become sales.
This indicator makes it possible to identify the best strategies. You can use A/B tests and evaluate the results. Thus, you define with numbers, the actions that must be taken by the sales team.
To calculate the rate, simply divide the number of orders by the number of opportunities generated, then multiply it by 100 to find the result as a percentage.
4. Average Ticket
The average ticket is the indicator that demonstrates the behavior of customers with the brand, that is, it shows the average cost per order.
It is one of the main sales KPIs, as it is directly related to the company’s turnover. You can draw strategies to increase the average ticket. Some examples are:
- offer progressive discounts;
- free delivery from a certain value;
- create product combos;
- among other.
To measure the average ticket, just divide the total billing by the number of orders generated.
Customer Acquisition Cost (CAC) is another important KPI. As the name itself says, it weights all the investment made until a consumer becomes a client.
To know this indicator, it is necessary to collect all the investment made, from marketing actions to sales expenses.
With these data, you must verify how many clients were generated in the period of time studied. Then divide the total investment by the number of new customers.
This indicator allows you to analyze whether or not a certain customer acquisition strategy is worthwhile. Since, if the CAC is greater than the average spend, it means that you are spending more money to get a customer than he is actually spending on the purchase. I mean, danger!
6. Number of closed deals
It is important to know the number of deals completed in a given period to create goals.
It is worth noting that this indicator by itself is not as representative as when it is combined with others — such as the average ticket — and it can become even more important for sales strategies.
A good example is comparing two vendors and checking the number of closed deals and the average ticket.
Perhaps a salesperson who cares about working the lead better, by spending more time with him, can achieve a higher order value.
7. Sales cycle
Our last indicator on the list of top KPIs is the sales cycle. Determine the time required for a person to make a purchase from the company from the first contact.
Its importance lies in the fact that the shorter the cycle, the more customers can be sought by the team, increasing profits.
If the sales cycle starts to get too high, it may mean that marketing is being uninformative, making it necessary to nurture leads to reach the purchase decision.
KPIs and increased sales
As we saw in this post, it is very important to create and monitor the main sales KPIs of the business. It is not good to create an extensive list of KPIs. That would only generate a lot of work and little focus.
The first point is to define the business objectives. From there, check what is directly interfering with that goal.
Thinking about the increase in sales, the indicators that we quote allow efforts to be concentrated on the techniques that bring the best results, increasing the efficiency of the entire team.
In this way, the company grows, becomes a reference in the market and professionals achieve the long-dreamed-of success.
Now that you know the main sales indicators, discover in this ebook everything you need to know to form an excellent sales team!