Tracking every necessary KPI can be exhausting for any sales manager. Since there are so many sales KPIs examples to keep tabs on, sales managers often rely on their field representatives to watch over the team’s activity on-site. However, even sales reps find it difficult to track every single metric manually.
If you are a sales manager or a sales representative, you need not worry, as many softwares can track KPIs for you & make your task seem like child’s play. But how would you know which sales KPIs to measure?
Don’t worry. I’ve got you some of the top sales KPI examples that you should be tracking to quadruple your sales. Remember, you might not need to track every single KPI that is mentioned in this article, but understanding them will certainly help you in the long run.
Without wasting any time, let’s dive right into it.
Sales KPI Examples You MUST Track!
Check out these sales KPI examples that you should be tracking to boost your sales.
Customer Acquisition Cost
Customer Acquisition Cost(CAC) measures the total capital you use to convert a lead into a customer. This metric is very important as it helps you make better budgetary decisions. Once you set your CAC, you can easily determine how many more new customers you want to bring in with your allotted budget.
The lower your CAC, the better you will be at acquiring customers. I highly suggest you look into the CAC across all segments to understand which segment of customers yields more profit & which will require more cost. This way, you know which customers to go for.
Average Revenue Per Unit
Typically used in subscription-based businesses, the average revenue per unit measures how much a business earns on average from one subscriber or a user.
ARPU is one of those sales KPI examples that help businesses to analyze their potential for growth on a per-customer level. This will help you determine how to model the cost for your product/service.
Calculate your ARPU with this formula:
Average Revenue Per Unit = Total Revenue / Total Units Sold
Lifetime Value of a Customer
The Lifetime Value of a Customer(LTV) is a KPI that measures the total money you use on marketing. This metric suggests the total revenue a business can possibly make from its entire customer base.
So if your CAC is greater than your LTV, then you are spending more money on getting new customers & not really generating any money.
Lead Conversion Ratio
The percentage of website visitors who become leads is known as the lead conversion ratio. This is one of the most crucial top of the funnel sales KPI examples for conversion indicators. It’s a sign of your capacity to draw in the appropriate target market and the effectiveness with which your website converts visitors into leads.
You’ll know how many leads you need to generate to maintain your team operating at full capacity when you know the ratio of your conversions to your average sales cycle.
A qualified prospect who has a good chance of buying from you is a sales opportunity.
When you measure this sales KPI, you will see all the pending opportunities & determine which opportunities are worth pursuing & which aren’t. The more your sales opportunity grows, the more sales you will generate. On the contrary, if your opportunities are decreasing, you may need to increase your sales efforts.
Average Conversion Time
The average amount of time needed to turn a lead into a sale is known as the average conversion time.
Generally speaking, a good conversion rate is somewhere around 2%-5%. Anything higher is always better. But if you find your average conversion rate stuck at a place, you need to bolster your sales efforts.
Formula to calculate the Average Conversion Time:
Average conversion time = Total length of time to convert a lead to sale / total number of new deals
Retention & Churn Rates
The percentage of customers that continue to use or renew their contracts or subscriptions for a company’s goods or services is known as the retention rate. This vital sales indicator measures a sales team’s capacity to keep clients & produce recurring income. The higher the retention rate, the better you are doing.
While the churn rate is calculated by the percentage of consumers that cancel or choose not to renew their service agreements or subscriptions. Increasing churn rates might indicate issues with a company’s products, customer service, sales strategy, etc.
Since it is more affordable to retain existing customers than to find new ones, you should carefully monitor this KPI.
New Leads in Pipeline
Basically, new leads in the pipeline are a KPI that tracks the number of new leads added to each rep’s pipeline during a single quarter.
When you track your new leads in your sales pipeline, it’ll help your sales reps to stay organized & be more efficient. You’ll be able to focus your time & resources on prospects who are most likely to become your customers by tracking the progression of each prospect through the sales funnel.
These are my top sales KPI examples you need to track to skyrocket your sales & generate revenue. I wanted to give you a gist of what these KPIs are & why you need to track every metric possible. I hope you’ve found answers to those questions in his article.
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