Sales managers — and particularly field sales managers — can often feel like they're trapped in a fog. Without a physical presence in the field, it’s difficult to keep tabs on their team's performance.
Instead, they rely heavily on their field representatives to be their eyes and ears. The best way for field managers to gain visibility into their team’s activity is to collect and measure their performance through KPIs.
In this post, we'll cover what KPIs are in sales and all the KPIs and metrics you should measure. At the end of this article, we'll share a free sales KPI template and calculator that you can use to get started measuring your team's performance.
What are KPIs in sales?
KPIs are metrics used to track the performance of a business, a department, or individuals against goals. Choosing KPIs that are most relevant to your industry and business goals is key — focusing on the wrong ones can be costly to your company.
What does KPI stand for in sales?
KPI stands for key performance indicator. In sales, KPIs can come in many different forms in order to measure specific activities. Sales managers, reps, and even marketers have sales KPIs that they should track.
To save you some time, we’ve narrowed down a list of commonly used KPIs — identifying the ones we believe are most important to managing field sales teams.
KPIs for Sales Managers
- Sales Volume by Location
- Competitor Pricing
- Existing Client Engagement
- Employee Satisfaction
- Upsell and Cross-Sell Rates
- Sales Cycle Length
- Customer Lifetime Value (CLV)
1. Sales Volume by Location
By comparing sales volumes across locations, including physical stores and online transactions, you'll see where demand for your product is highest and lowest. From there, you can figure out why.
If sales volume is large in region A, perhaps there is a higher demand there, in which case you can focus on customizing certain products and services for that region. Or, if you are comparing numbers across physical stores, you can take advantage of A/B testing.
For example, if two locations see relatively similar sales volume in January, try implementing a promotional sale in one location and not the other in February to see if it drives sales.
In addition to promotional sales, you can try other tactics such as shelf displays, discounts, coupons, demos, or samples.
2. Competitor Pricing
While managers and business owners shouldn’t track competitors’ every move, being aware of their pricing can help create a competitive strategy. If your prices don’t differ much, you can consider a price-matching strategy to guarantee your customers the lowest prices — and you the most sales.
Additionally, by keeping track of the average retail price of your products, you can measure the impact of cutting your prices or implementing a promotion.
And make sure you're training your reps to handle pricing objections appropriately. Try role-play exercises so they're prepared to discuss price without defaulting to discounts.
3. Existing Client Engagement
Maintaining a good rapport with customers after the sale is important to ensure long-term business. By regularly touching base with their customers to understand how things are going and how they can help, salespeople can build trust and keep customers happy.
When reps are consistently available to help, customers know they’ll always have somebody there to support their business needs.
Beyond benefiting your company’s business outlook, keeping in touch with clients supports your business's strategic goals as well — it's a sales metric that matters.
Ask your salespeople to keep a tally of interactions they have with each of their customers, then compare the number of touches to the average length of a client relationship.
If, for example, you notice that your top 10 long-term clients touch base with their sales rep approximately once per quarter, take a deeper look. What do those touch bases look like? How often do reps encounter an issue they're able to help their client solve?
4. Employee Satisfaction
Ready for some sobering news? A 2020 survey by Emplify found that 75% of employees are moderately engaged in their work. Moreover, just 18% of employees can be responsible for thousands of dollars in lost productivity.
Working in sales requires persistence, and sometimes representatives can run out of steam. So one of your biggest challenges is making sure your sales reps are motivated and enjoy their work.
With a remote workforce, how do you keep your sales force in sync? Do they feel like they’re part of a team? Do they agree with the sales methods that you’ve implemented?
Employee feedback is crucial to a successful sales culture. KPIs are used not only to measure your team members but also your performance as a manager. Because employee satisfaction can be difficult to quantify, consider using an eNPS survey, along with a few qualifying questions to understand what’s making them happy or unhappy, then compare the results against your goal. It's also a good idea to learn how to spot burnout in your salespeople and determine a plan to combat it quickly.
5. Upsell and Cross-Sell Rates
Who are the most qualified leads in your CRM? Your existing customers. Have your reps track their upsell and cross-sell numbers, and use that data to identify whether certain verticals respond well to certain product or service pitches.
For example, if reps have good luck selling Feature X to clients with Product Package Y six months into their tenure with you — this might be a worthwhile milestone to add to your sales process.
Look at when, how, what, and to whom your reps are upselling and cross-selling, and adjust your efforts accordingly.
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6. Sales Cycle Length
Similarly, it's important to look at the average length of your team's sales cycle. Are some reps closing in three weeks while others are closing in six? What are the respective churn rates six months from onboarding?
Analyze what sales cycle length produces the highest number of closed-won business. And don't forget to also look at how successful those deals are down the line.
If you have a rep who's closing business in record time, but you find that their customers are dissatisfied with your solution and often churn after nine months, a longer sales cycle might yield a healthier business.
Once you have data on your KPIs, analyze the information to understand why you got those results. Then, determine how you can improve performance and follow through with action. And remember, as important as establishing KPIs are, they must be always tied to an overarching goal.
7. Close Ratio
Close ratio measures how efficiently a salesperson or team is closing deals based on the leads they’ve worked. This metric works in conjunction with system touches to help quantify the effectiveness of your sales team’s outreach strategy. Close ratio can be calculated by dividing the number of actual closed deals by the number of lead opportunities the salesperson had during a given time period.
KPIs for Business Development Reps
- Opportunities Created
- Proposals Sent
- Deals Won
- Client Acquisition Rates
Your business development representatives are actively prospecting, often using cold outreach methods. The following KPIs can help sales managers track BDR performance:
The number of BDR sales activities per rep in a set amount of time can give you an indication of their productivity level. You might consider measuring:
- Number of calls
- Number of emails
- Meetings scheduled
Keep in mind that this won't tell the whole story. Some reps may focus on quality over quantity. However, it does give you a baseline for measuring productivity.
2. Opportunities Created
This is a metric that managers consistently monitor.
As alluded to in the previous section, sales activity means nothing unless it results in tangible pipeline growth. For this reason, productivity metrics such as sales activity are best compared to the number of opportunities created by the BDR.
You'll get insight into which activities are working best and which reps are generating the most results from their efforts.
How are your salespeople contributing to the expansion of your business in their given territory? Who’s reaching their quota? What percentage of your team is hitting their number? Is quota too high? Too low?
Share this data with your team so they can see how they stack up against other reps. There’s nothing like a little competition to get your team motivated.
3. Proposals Sent
Whether the BDR nurtures the relationship themselves or hands a prospect to the account manager, the number of proposals sent can give you an indication if BDRs are prospecting to the right people and generating SQLs and opportunities that have a genuine interest.
4. Deals Won
While a BDR isn't responsible for closing business, you want to keep a pulse on how much new business results from your outbound efforts. Monitoring the number of deals won per rep and across the rest of the team can help you make sound decisions when budgeting and reinvesting in sales plays.
5. Client Acquisition Rates
Another commonly used measurement is the rate of client acquisition. Of the new prospects your reps reach out to, how many convert to customers? It’s natural for some salespeople to perform better than others — but if there are large discrepancies between conversion rates, dig deeper.
Are lower-performing reps approaching bad-fit prospects? Is there something that over-performers do in sales meetings that others don’t?
Compare conversion rates to the number of prospects a rep reaches out to. If you find that conversions decrease after a certain number of touches, use that number as a benchmark to prevent your reps from getting burned out or stretched too thin.
Finally, use conversion rates to compare different outreach methods, such as emailing or cold calling versus pursuing face-to-face interactions.
KPIs for Sales Development Reps
- Average Response Time
- Percentage of Leads Followed Up With
- Positive vs. Negative Reply Rates
- System Touches
- Meeting Acceptance Rates
- SQL-to-Customer Conversion Rate
- Deal Win-Loss Ratio
While some of the KPIs in the previous section may also apply to your sales development representatives, keep in mind that SDRs primarily respond to inbound leads. For this reason, you should be tracking their performance with these KPIs as well:
1. Average Response Time
If a lead is flagged as qualified by your marketing team, or if that lead indicates interest by filling out a form, there's no time to waste and no need to keep the lead waiting. Always benchmark response time and encourage reps to improve it. That way, they're catching leads while the pain or problem is top of mind.
2. Percentage of Leads Followed Up With
You want your SDRs to be making contact with all qualified leads, and that won't happen if your team is cherry-picking. This metric can also give you insight into productivity and bandwidth.
3. Positive vs. Negative Reply Rates
When tracking this KPI, consider all prospect replies through any channel as being binary — the prospect either is or isn't interested. It's based on sentiment, not customer acquisition. That's what differentiates this metric from others.
It's also notable in that it's measured at a prospect level, meaning all that matters is the total number of prospects contacted. However many emails, calls, or other touches it took to contact them aren't reflected in the figure. The metric is expressed as a percentage — if 50 prospects were contacted and three responded positively, the positive reply rate is 6%.
SDRs should track this figure, tagging positive replies to identify trends. This metric can reveal flaws and highlight benefits in aspects of your sales process like outreach cadence, prospecting approach, and channel preferences.
4. System Touches
Ideally, you'd like your sales process to be fairly "low touch," meaning your salespeople are closing new business efficiently for your company and your consumer.
If you review a salesperson's quarterly numbers and see that they missed their quota and had a very high number of touchpoints per closed-lost deals (say, five video meetings, 11 emails, and seven phone calls), it might be time to revisit how effective that rep's strategy is.
Analyze your most successful reps' average touchpoints. Do their closed-won deals average three video meetings, eight emails, and four phone calls? Ask these reps to share their strategies, techniques, and advice to streamline your team's average, collective sales cycle.
5. Meeting Acceptance Rates
Consistently landing appointment acceptances is a mark of an exceptional sales rep. It means they can create a sense of urgency with prospects. Oftentimes, prospects try to push meetings off, don't take them seriously, or just flat out stop responding. If an SDR lands meetings on a regular basis, it means they're making their prospects prioritize your product or service in their schedules.
This rate is calculated by dividing the number of meetings a rep schedules by the total number of replies they receive from prospects. It's a valuable metric for understanding both your reps' sales acumen and the efficacy of your sales training, specifically when it comes to objection handling.
6. SQL-to-Customer Conversion Rate
Your SDRs may not have much control over how many leads are generated, but they certainly have a hand in turning those leads into customers.
Low conversion rates across the board can indicate an issue with your lead generation and qualification process. Low conversion rates with specific reps can help you make decisions about ongoing training and development.
7. Deal Win-Loss Ratio
While SDRs may not be involved in closing the deal, the win/loss ratio can indicate the quality of the experience the prospect had along the way.
KPIs for Sales and Marketing to Track
- Percentage of Leads in Each Lifecycle Stage
- MQL-to-Customer Conversion Rate
- Average Length of Customer Lifecycle
- Volume of New Opportunities
- Cost Per Lead
- Cost Per Acquisition
- Customer Retention Rate
- Average Revenue Per Account
- Net Promoter Score (NPS)
- Customer Lifetime Value (CLV)
For organizations with sales and marketing departments, it can be difficult to measure sales performance. After all, how do you know the handoff is successful?
Here are KPIs that can give you a clue:
1. Percentage of Leads in Each Lifecycle Stage
If you break down leads by lifecycle stage (e.g. Lead, MQL, SQL), you may be able to see the pinch points and bottlenecks across the two departments.
Marketing is responsible for increasing the percentage of leads that make it to MQL, the handoff happens between MQL and SQL, and Sales is responsible for turning SQLs into opportunities. However, if Sales isn't getting the right leads, sales numbers will be affected. You'd start to diagnose pipeline issues with these metrics.
2. MQL-to-Customer Conversion Rate
With that in mind, both Marketing and Sales have an interest in the MQL-to-customer conversion rate.
Marketing because they supply the MQLs, and Sales because they turn those MQLs into customers. Therefore, raising this number should be a shared objective.
3. Average Length of Customer Lifecycle
The customer lifecycle refers to the different stages a customer goes through on their path to purchase (and beyond). It's in an organization's best interest to decrease the time between first impression and first purchase — in theory, that will reduce acquisition cost and generate customers more efficiently.
Marketing and Sales both have a stake in this lifecycle and can continue to iterate improvements to shorten it.
4. Volume of New Opportunities
In order to achieve alignment between sales and marketing teams, tracking the volume of new opportunities is going to be important. Before measuring this KPI, both teams will need to agree on what a new opportunity is. While there is no universal definition, a sales opportunity is usually a qualified prospect who has a high probability of becoming a customer. The sales pipeline begins with opportunities, which turn into deals and customers. Marketing and sales must work together to qualify leads and create more opportunities.
5. Cost Per Lead
This metric helps quantify the success of a marketing campaign by measuring how well leads are making their way from marketing to sales. The lower the cost per lead, the more effective the campaign is at bringing in leads for the sales team.
You can calculate the cost per lead by dividing the campaign budget by the number of leads acquired from the campaign.
6. Cost Per Acquisition
From the market research to deal closed, cost per acquisition measures every effort a business takes to acquire a new customer. An acquisition may be defined in different ways such as form fills, asset downloads, or actual deals closed. If you’re measuring this for both marketing and sales, deals closed may be more informative for both teams.
Cost per acquisition tells you just how much your business spent to welcome that customer onboard. By comparing this metric over time, your marketing and sales teams can learn what works and focus on those activities. In turn, the cost per acquisition should decrease, making both teams more efficient at closing new business.
7. Customer Retention Rate
Just because a customer signed a contract with your company doesn’t mean you’re done earning their business. Tracking how well your team is meeting the customer’s needs is key to customer retention. Customer retention measures how well a business retains its customers and their revenue over time. While there are several ways you can measure customer retention, it’s easier to have a single metric to review on a regular basis. You can calculate a single number by measuring customer retention rate with this formula.
8. Average Revenue Per Account
Do you know how much, on average, your accounts spend with your business? If not, you should start to track this KPI. Understanding the average revenue for an account can help your marketing team identify audiences with more relevant campaigns and help your sales team take an account-based selling approach to new prospects with similar business models to accounts with high average revenue.
9. Net Promoter Score (NPS)
Your NPS is a measurement of how likely customers are to recommend your product/service to someone else.
The survey asks participants to rank the likelihood of a recommendation on a scale of 0-10. Their numerical ranking is divided into three categories:
- Promoters (9-10): They like you — they really like you. Not only will these customers likely renew, but they also won't hesitate to recommend you to friends or colleagues.
- Passives (7-8): They're satisfied, but that's about it. Passives feel your product/service is status quo.
- Detractors (0-6): They don't like you — they really don't like you. Detractors will likely churn, might tell others to avoid doing business with you, and will do the most damage to your brand.
Send your NPS regularly — and remember not to send it too early to new customers. There will always be kinks that need to be worked out of the system before an NPS is sent.
The cadence of survey sends depends on your business and goals. As a rule of thumb, start by sending an NPS every three-to-six months.
To calculate your score, subtract the percentage of detractors from the percentage of promoters. You can also use this handy NPS formula.
10. Customer Lifetime Value (CLV)
"Customer lifetime value is the metric that indicates the total revenue a business can reasonably expect from a single customer account. It considers a customer's revenue value, and compares that number to the company's predicted customer lifespan."
It's a crucial metric to determine which customer segments or buyer personas will drive the most revenue for a company.
Its applications aren't limited to accounting for broad portions of your customer base. The figure can also be used to gauge the value of individual accounts and, in turn, your account managers' ability to engage existing clients. Their ability to consistently provide value to their clients can be measured, in large part, by the value they offer back.
An account manager can demonstrate that they're actively involved with their clients with a high average customer lifetime value. It shows they know how to establish rapport and keep clients loyal to your business as time goes on. It's a valuable KPI to bear in mind when getting a feel for account managers' overall performance.
Sales KPI Template & Calculator
Free Resource: Sales Metrics Calculator
We know these can be a lot of KPIs to keep track of, and by no means do you need to start measuring each of these next quarter. Below are the best sales metrics to track when you're first starting. All of these metrics can be calculated in this free template.
- Average Deal Size: Measure this metric when you first get started to set a benchmark for future goals.
- Win Rate: Gauge how many closed-won deals your team is closing.
- Demo-Close Ratio: Accurately forecast your pipeline by understanding how many demos your sales reps are scheduling.
- Quota Setting Calculator: Know rather than guess what your team's quota should be next quarter.
- Commission Calculator: Set up a fair and attainable compensation structure for your team.
- Customer Acquisition Cost (CAC): See how much it costs your business to bring a customer on board.
- Customer Lifetime Value (CLV): Determine the value that your customers will bring over the entire time that they do business with you.
- CAC-to-CLV: A ratio to determine how much it costs to bring a customer on vs the value they bring over time.
- Revenue by Product: Understand which products bring in the most sales so your team can sell strategically to meet the customers' and the business's needs.
- Customer Retention Rate: Measure how many customers continue doing business with your company over time.
- Revenue Churn: Measure how many customers stop doing business with your company over time.
- Employee Turnover Rate: Track how many employees leave the company in a given time period.
Track KPIs That Matter
Once you have data on your KPIs, analyze the information to understand why you got those results. Then, determine how you can improve performance and follow through with action. And remember — as important as establishing KPIs are, they must be always tied to an overarching goal.
Editor's note: This post was originally published in June 2019, and has been updated for comprehensiveness.