Sales are and always will be a numbers game. Tracking Key Performance Indicators (KPIs) is mission-critical to the function of sales teams.
No matter what sector you are in, sales make everything possible. Sales bring the revenue in, so sales teams need to keep a clear overview of KPIs, to ensure the team is on-target, or to assess and evaluate where improvements need to be made.
To ensure a sales team is performing as well as possible, every action needs to be broken down into a series of metrics, known as Key Performance Indicators (KPIs). This data enables sales teams to measure where they are compared to where they want to be, known as the overall sales targets, or goals.
Sales goals are usually set annually and then broken down into monthly goals. Different teams will have different targets. Field sales and account managers have different targets compared to inside sales teams.
In this article, we’ll share 20 essential KPIs that field sales managers and teams need to track.
New revenue refers to everything anyone doing sales activity brings in, whether they’re field sales reps, inside reps, or even on the marketing team. Everything both teams are responsible for is ultimately designed to generate new revenue.
Account managers, and those in field sales covering various territories, usually generate additional revenue from current customers. However, for this KPI, we aren’t counting that. Instead, every time a new client is landed, the value of that work or contract can be calculated as new revenue.
Account management and field sales are designed to generate revenue from current customers. This means either ensuring a contract keeps going or using upselling and cross-selling techniques as a way of increasing revenue.
Year-on-year (YoY) comparisons are usually generated when targets and KPIs are being set. If you can compare revenue now to a year ago, and the numbers are up, then your team is on or above target.
Customer Lifetime Value (CLTV) depends on the life cycle of customers, on average, and how long they require your products/services. For example, if you are a Software as a Service (SaaS) company and the average monthly subscription most customers pay is $200.00, and they stay for 3-years, then the CLTV is $7,200.00.
Naturally, higher prices and longer life cycles increase the overall average value of customers.
It’s often useful to break revenue down according to a range of metrics, to help you analyze them more effectively. It could be product or service lines, territories (e.g. different countries or regions), and sectors. This gives sales managers a clearer idea of what’s performing well and what isn’t. Improve performance with this data, and even use it to realign service or product offerings.
Measuring activity is a crucial skill and operational function for any sales manager. If you don't know what your team is doing with their time, how can you coach and train those who aren't performing as well? Sales activity metrics are often overlooked because everyone looks at whether targets have been hit, or not. But if you don't take a closer look at what’s going on every day — within the pipeline at a granular level — then actual performance could be easily overlooked.
Measuring the number of outbound/outreach calls to new prospects that a sales team makes is crucial. This is to ensure there are enough sales leads in the pipeline to book meetings, based on current conversion rates. For example, if it takes 50 calls to book 5 meetings, then the KPI is 50 calls a week.
As part of the above activity, sales teams who are prospecting for new leads need to send outbound emails and messages. You need to ensure salespeople include an element of social selling, so they’re not completely cold.
Warmer and more tailored outbound/prospecting calls, emails, and messages will increase success rates. At the same time, a decent volume of these need to be sent out to generate enough meetings with prospects.
Activity at the top end of this pipeline should result in meetings/demos being booked. An active pipeline ensures there are plenty of meetings being booked. This KPI is to make sure the number of meetings being booked is enough to support the relevant conversion rates.
You can use a route optimization app, like Badger Maps, to spend less time driving and planning, and more time in front of the right customers. Badger reduces sales reps’ average drive times by 20% and frees up an average of 8 hours a week. These time savings can be used to meet more prospects and close more deals.
How long does it take from the first meeting or demo to win a new client? Every sales manager should aim to ensure the sales cycle is short, especially if leads have been qualified properly in the early stages.
Similar to the CLTV metric: it’s always useful to measure the financial value of every deal in the pipeline, and ensure this is entered in the CRM.
Inbound leads either come in from referrals, channel partners, those in your network sending leads, and, most importantly, the results of inbound marketing activities.
Say you need to win 10 new customers this month. It takes 2 weeks from the first contact to convert them, it takes 50 demos to win those customers, and you have a 10% conversion rate from inbound leads, then you need 500 new leads in the pipeline every month.
To calculate the number of leads in your pipeline, you’ll need to base this metric on the conversion rate that works for your company.
With inbound leads, speed is everything! Don't delay replying to them. Whether they've filled in a lead magnet form, sent an email, or a LinkedIn message, the sales rep in the relevant area needs to get back to them quickly. Otherwise, a warm lead could quickly go cold. Time is crucial when it comes to inbound leads.
With inbound leads, the aim should be to book as many as possible demos and sales meetings. It may take one call or demo to qualify a potential lead, and then another for the more in-depth demo. Unless of course, you can convert new leads on a single demo/meeting.
When it comes to inbound leads, the time it takes to win a new client should be shorter than outbound leads. These are already interested and to an extent have pre-qualified themselves, so pay close attention to this aspect of the sales cycle.
Similar to the CLTV metric: it’s always useful to measure the financial value of every deal in the pipeline, and ideally ensure this is always entered in the CRM.
Is this a matter of days or weeks? Keeping it short ensures sales leads, whether they're from outbound or inbound pipelines stay interested.
Look at this from the top to the bottom of the sales funnel. From when leads first enter the pipeline, and how many there are, to the number that converts into clients. Aim to monitor and get this metric as high as possible.
Again, this is another top-line activity metric in many ways. How long does it take for leads to work through the pipeline, and how many fall away at various stages? This is the best way to plug any leaks and increase conversion rates.
And finally, how much are all of these deals worth? In terms of annual revenue, it can be viewed in two ways: new revenue being generated and the average expected lifetime value of a new client.
We know of course there are numerous other metrics you could measure. Larger companies often measure more. Small and medium businesses and startups work with what they can for the time being, and often rely on CRMs and meetings, calls and emails from sales team members for a clear overview of KPIs.
Keeping a close eye on KPIs ensures a sales team is performing well and contributing to the overall success of the company.
Jói Sigurdsson is the Founder & CEO of CrankWheel, a zero-hassle screen sharing and co-browsing solution, designed to help salespeople increase conversion rates and engagement with prospects.
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