Measuring sales success is traditionally achieved through basic sales Key Performance Indicators, or KPIs. KPIs, such as the revenue each sales representative accumulates every month, are worth measuring – but it’s not the full story. 

Basic sales KPIs don’t always deliver the valuable insights your business needs to grow and drive more revenue. Throughout the full sales cycle, various challenges can crop up. Plus, there will be different reasons that some sales representatives don’t meet their monthly targets. 

Developing more relevant KPIs is the key to understanding why you might lack results, and what you need to do about it when developing a sales strategy.

A firm grasp of your sales funnel is crucial to your business’s future success. When you understand what’s happening and why, you are in a more powerful position to forecast, predict revenue, and better understand whether your current processes are relevant or worth taking action on. 

Understanding data

First of all, it’s worth noting that smart sales KPIs start with intelligent data. 

The customer data gleaned from your software sales enablement system must be accurate, up to date, and deliver a single source of truth. Doing this means you are able to connect a customer with their details immediately, and save time searching for key information. 

Keep on top of your customer data by conducting regular audits so that any member of your sales team can pick up a deal that’s in progress and get it over the line in the most efficient way possible. 

15 sales KPIs you should be tracking

1. New business revenue

Kicking off with perhaps the most tangible KPI, new business revenue tells you how much income you’re receiving from new customers. This metric explores your sales prospecting vs lead generation methods. 

The most efficient route to tracking this KPI is against a goal percentage. For instance, say you want to shoot for 40% of your business’s revenue generated by new customers, you’d calculate:

Revenue = Number of Units Sold x Average Sales Price  

2. Trials

This KPI counts the number of new accounts converted from a trial within a specified period of time. It also helps marketing and sales teams align with the same goal. If marketing teams can escalate a significant number of new accounts, sales teams have a higher volume of leads to qualify and close.

3. Sales qualified leads

As a successful outcome of trials, you obtain sales qualified leads (SQLs) to work with. This customer segment is defined by conditions set in the sales processes, and are highlighted as prospects with an intent to buy. Tracking this KPI ensures that your business is aware of how many SQLs are in the pipeline and identifies whether more targeted marketing is required to encourage additional prospects.  

4. Projected pipeline sales value

This KPI measures the value of projected deals in your sales funnel, and acts as valuable oversight to see how likely it is that your business will meet its sales targets. Determining the projected value of deals in your pipeline, together with the probability that they will close, defines your projected pipeline sales value. Many companies track this metric monthly as a monetary amount of potential revenue expected to close within a defined timeframe. 

Use this formula to calculate your business’s projected pipeline value:

Projected Pipeline Sales Value = Deal Value x Probability of Closing

5. Number of monthly onboarding and demo calls

This metric is a fairly obvious one, but no less important. 

Onboarding and demo calls are essential steps to closing deals, which is why they should be included in your tracked KPIs. At a more granular level, you can segment data to measure this metric by individual sales representative performance. 

6. Call volume per sales representative

Similar to the above KPI, this metric looks at how many outbound calls each sales representative makes to prospects. The way your employees manage sales leads is important, but so too is the volume of calls they’re making. 

This KPI can be further analyzed by checking calls answered or email open rates, length of calls, level of engagement, and how many potential prospects were discovered per number of calls. 

7. Average cost per lead

Average cost per lead tells you exactly how much each lead costs your business. This metric takes into account every aspect of lead generation, including marketing spend and employee salaries. Understanding this KPI means you can be vigilant about customer acquisition costs a little further down the line and effectively meet sales quotas.  

8. Customer lifetime value

Customer lifetime value (CLV) determines how much income you can expect to generate from a customer throughout the lifecycle. Businesses use this metric to decipher the most profitable customer segments, along with the most accurate costs to spend on acquiring new customers. 

The formula for customer lifetime value is:

Customer Lifetime Value = Gross Margin % x Retention Rate x Average Revenue per Customer

9. Customer acquisition cost

The lower your business’s customer acquisition cost, the better at acquiring customers you are. This metric determines the most profitable customer segments and highlights where marketing and sales should focus their efforts. 

If you can grow customer lifetime value and revenue per customer whilst reducing customer acquisition rates, you are in a strong position to increase business revenue. 

Use this formula to calculate customer acquisition cost:

CAC = Total Cost of Acquiring Customers / Number of Customers Acquired

10. Sales per representative

Sales per representative enables managers to see the level of sales each employee generates. This metric is used to set personal goals and define a company baseline for bonuses and targets. 

Tracking this KPI enables you to ascertain individual performance and decide whether to incorporate sales strategies and tools such as sales quoting software into your business. 

11. Customer churn rate

Also known as customer turnover, your business’s churn rate refers to the amount of customers you lose over a set period of time. Knowing your churn rate will empower you to find out why your customers are leaving so you can do something about it. 

Calculate your churn rate by using this formula:‍

Lost Customers / Total Customers at the Start of Time Period x 100

For example, if your business had 200 customers at the beginning of the month and lost 15 by the end of the month, you would divide 15 by 200. Multiplied by 100, you would have a 7% monthly customer churn rate. 

12. Retention per representative

There’s more to success than just closing deals, which is why this metric examines how many customers your employees retain. After all, it’s a well known fact that retaining customers is less costly than attracting new ones. 

It’s essential for business growth that your representatives close the right deals with the right customers to optimize retention rates. The retention rate per representative helps managers to identify particular behaviors surrounding closing wrong deals and encourage staff training accordingly. 

Track retention per representative by monitoring customer churn rate and repeat business revenue. A high churn rate or low repeat business ratio typically indicates that there’s an issue with your business’s sales funnel or customer support system.

13. Win rate

Your business’s win rate is the most obvious indicator of how your pipeline is performing. Tracking this metric regularly ensures that you know if your sales representatives are closing enough deals to hit your targets. 

Win rate allows you to step in and take action if your team is nowhere near their monthly sales targets. 

Use this formula to calculate win rate:

Win Rate = Number of Won Opportunities / Total Number of Opportunities in a Specific Period

14. Repeat business revenue

This metric defines the amount of revenue generated from your current customer base, and typically arises from tactics such as upselling, reorders, and cross-selling. Tracking this KPI helps you identify the value of your current customer base to focus your attention on the right customers to nurture for maximum sales opportunities. 

If your company experiences low repeat business revenue rates, it might be worth investigating aspects of your current processes. For example, you may need to reconsider your pick pack and ship services if you think your shipping speeds need improving.    

Businesses typically track repeat business revenue monthly (MRR), quarterly, or annually (ARR) against a target percentage.

The following formula calculates MRR:

Monthly Recurring Revenue = Number of Paying Customers x Average Revenue per Customer

15. Customer feedback scores 

Whether you deploy CSAT or NPS, you’ll get a good sense of how your business is performing through the lens of your customers. 

CSAT surveys are one of the most popular tactics businesses use to improve customer interactions and enhance the customer experience.

On the other hand, your NPS score is a metric that indicates how likely your customers are to become brand advocates (or not!). Through running an NPS survey via call or email, you’ll glean valuable information as to whether your customer base are typically promoters or detractors.  

What’s next?

This article includes valuable KPIs to deploy for your business. But remember, KPIs are only  effective in practice, not theory. Take the time to proactively approach KPIs with strategies for regular tracking and buy-in from the rest of your team. 

Once you have established the best processes, use them to measure the performance of your sales tasks. Then you can monitor, review, and adjust as necessary to move towards hitting your business’s closed deals and revenue targets.