Key Performance Indicators (KPIs) keep the sales team aligned and work towards a common goal to make the brand successful and profitable in the market. We’ll discuss the essential KPIs in sales and some examples to understand the need for a sales analyticsal dashboard within an enterprise.
The sales team has a crucial role in bringing quality leads and increasing conversions. Every sales department has a list of KPIs to track and analyze their processes. However, setting the wrong KPIs or choosing too many (or too less) can lead to decreased revenue and loss.
Statistics reveal that a whopping 81% of sales and marketing teams don’t take time to review their process. Furthermore, 65% of sales managers don’t have the necessary resources to increase sales. Another report shows that many sales leaders believe that half the people they contact are not the right audience for the product or service.
In such instances, it becomes vital to understand the need for accurate and measurable key performance indicators in sales. Choosing the right KPIs in sales can help the team overcome various challenges and reach out to exact target markets. This is possible by hiring experienced business intelligence service providers to handle the process from start to finish.
In this blog, we’ll read more about which KPIs to include in your sales KPI dashboards and why.
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Sales key performance indicators and metrics are factors that help you track and evaluate the performance of your sales team. KPIs provide a direction for the sales team to plan and implement their strategies to attract new customers and increase sales. KPI in sales can be considered a goal, target, objective, or priority.
When you fix the right KPIs for your business, you will find it easy to align long-term goals with training opportunities, set up the sales pipeline (and eliminate roadblocks), maximize profits, and optimize the sales process end-to-end. The sales KPIs also help define the daily sales tactics and best practices.
Sales KPIs and metrics have to be measured continuously to ensure that the sales strategies are in sync with the goals. This is done by creating a dashboard using business intelligence tools like Power BI or Tableau. The data visualization application is integrated with the existing software in your business to streamline data flow.
Business intelligence consultants will create and customize the sales KPI dashboard based on your organization’s niche, sales volume, target audience, goals, and KPIs. The sales team can directly access the dashboard to get real-time insights in graphical formats and make day-to-day decisions.
The sales performance dashboard is an interactive tool that gives insights about leads, revenues, targets, achievements, etc., for various durations. It helps your sales teams improve performance and stay one step ahead of competitors.
Some sales teams have less than five KPIs, while some may have close to twenty. You have to determine the most effective performance indicators for your business and monitor them. It’s not uncommon for sales teams to change their KPIs if they don’t get the expected results over time.
A sales analytical dashboard will make things easy and help you identify the issue in the earlier stages. Taking corrective action immediately will minimize losses and amplify ROI.
So, what are the leading KPIs for sales? Check out the list below:
You need to know how many leads the sales team is generating. A lack of leads implies a lukewarm or cold performance. It can also mean that the target audiences are entirely wrong and have nothing to do with the product or service you offer.
The next important KPI is the number of qualified leads. Not every lead generated by the team will deliver value to your business. However, if a majority of the leads don’t qualify, it indicates an issue with the sales strategy.
This KPI is particularly important if you use an email marketing strategy to reach out to the target audience. You would want more receivers to open the emails and click on the links (action buttons) and engage with your business.
Lead response time provides insights about whether the sales rep is following leads and sending timely updates, if the established process is delivering results, and which areas are causing friction and increasing the time taken to qualify leads.
Brand mentions are another important KPI that helps in determining your presence on the internet. Of course, it is essential to see if the mentions are positive or negative. A higher percentage of positive brand mentions indicates that more people are discussing your products and services. This data helps in fine-tuning targeted marketing strategies for each channel.
The visitor-to-lead conversion rate is measured for the business website. It helps track the CRO (conversion rate optimization) of the website. This data can be used for SEO and to create effective marketing emails.
Your business has to constantly deal with competitors. Their pricing could affect your sales and vice versa. This KPI helps your sales team to track the competitors’ prices and justify your prices. For example, if your prices are higher than the market average, you should provide a good reason to justify the premium costs.
The average conversion time KPI measures the duration of converting a lead to a customer. It involves the entire lead nurturing process and the customer’s journey through the sales funnel. Lesser conversion time is a sign of an effective sales strategy.
It is equally important to track the time taken to do away with unqualified leads. This percentage has to be low. If you take more time to lose a lead, it means that you are spending more money on something that won’t give you returns. Leads that go nowhere should be filtered in the early stages.
Customer retention is the most important KPI to measure for any business. Spending excess amounts on acquiring new customers will not deliver long-term results if the current ones don’t stay with your business. Retaining your customers is vital to increase brand value in the market.
Keeping track of the number of successful deals is important. However, tracking the revenue generated per deal is even more vital. The quality of a deal will ultimately determine the revenue for your business.
Track your sales every month and measure the growth percentage. Have there been more sales than the previous month? If yes, how many and why? Are there ways to further increase sales, or will you continue the same strategy for the coming month?
CAC is the amount you spend on acquiring a customer. You can also use customer acquisition rate as a KPI. Both metrics deal with slightly different aspects and are equally essential. The acquisition cost for a customer should never be more than their lifetime value with your business.
LTV (lifetime value) is the measure of how much a customer is likely to spend on your products and services in their lifetime. Higher LTV implies repeated sales and the possibility of the customer being loyal to your business for a long time. The ideal LTV: CAC ratio is 3:1.
Some KPIs are more valuable and critical than others (though this depends on the business and your long-term goals). The following sales KPI examples are commonly used to create a Power BI sales dashboard for an organization.
The ACV KPI dashboard provides information about the annual amount of sales generated by a customer in a year. It helps sales reps identify the chances for upselling and cross-selling more products and services based on the customer’s preferences. And if the customer hasn’t contributed to sales in the year, your team can start focusing on attracting new customers or changing their approach to convince the customer and increase sales.
Average ACV = total sales value per year/number of contracts or customers
The gross profit margin is a must-have sales KPI dashboard as it provides information about your business growth and the additional amount you generate necessary to keep the business running. There is no specific profit margin to aim for. It depends on the average industry margin, business volume, expenses, and so on. However, a 10% profit margin is considered healthy and achievable.
Here, you need to calculate gross and net profit margins, as some variables have to be excluded from the calculations. The sales team needs to know exactly which factors will be considered when calculating the net profit margin. Sometimes, a business can appear profitable on paper but may not be doing well in reality.
Your sales team should know how much revenue is being generated through their marketing strategies. While this information is independent of profits, the sales manager needs to understand and correlate the amount spent on marketing and the amount gained through the efforts. Knowing this information will help your team rework their strategies to increase revenue and achieve their targets.
Are customers easily moving through the sales funnel? Are they starting to trust your brand as they become familiar with your businesses? Various aspects are tracked and measured using this KPI dashboard.
The sales funnel dashboard offers comprehensive reports in real-time to know where your sales team stands in convincing the audiences to become customers.
The churn rate KPI dashboard provides information about whether you are attracting more customers than retaining them. The churn rate increases when you lose customers to a competitor. A business with a small to moderate churn rate can be successful (if other factors are also favorable) as it retains customers and ensures their loyalty to the brand.
The KPIs for the sales analytics dashboard can be varied, depending on your business requirements. Choosing the right KPIs and investing in advanced tools are both important to stay up to date about your strategies and results.
Talk to BI companies and hire offshore Power BI consultants to establish, customize, and integrate a data analytical dashboard for your sales teams. Use real-time sales analytical reports to fine-tune your marketing strategies and increase profits.