Sales Management: 10 KPIs to Measure and Improve Sales Performance
October 17, 2022
Great sales management requires a keen focus on the sales metrics that help inform you about the state of your sales team’s performance and help point you in the direction of improvement. It’s nearly impossible to improve as a sales team without knowing the areas where you excel versus where you need to grow.
It’s simply not enough to measure how much you sold this quarter versus the last. There are a host of other sales metrics you must stay on top of if you want to maximize the growth of your sales organization.
This article highlights ten essential sales metrics, or key performance indicators (KPIs), sales leaders can use to measure and improve sales performance amongst their team.
What Are Sales KPIs?
Sales management and KPIs go together like peanut butter and jelly. KPIs are any sales metrics that tell you how well (or poorly) your sales team or individual sales reps are performing. Without a solid grasp on your team’s KPIs, you’re practicing sales anarchy, not sales management.
However, the metric itself is just one component of a KPI. To get the most value out of the KPIs you track, it’s important to measure them against your performance expectation. In other words, measuring your total revenue only tells you so much. Comparing your total revenue to your expected total revenue paints a more complete performance picture.
10 KPIs Critical to Good Sales Management
Below, we highlight ten KPIs that are useful to most sales organizations. However, the actual KPIs you choose to track will depend on the nature of your business and your performance goals. Continue reading to learn more about the following KPIs:
- Total Revenue
- Quota Attainment
- Participation Rate
- Deals Won
- Deal Win Rate
- Sales Forecast Volume
- Sale Forecast Accuracy
- Sales Cycle Length
- Customer Lifetime Value
1. Total Revenue
Most sales teams track their total revenue per quarter, but they don’t always track it in the most efficient way. It’s common for organizations to simply set a revenue goal and see if it’s met at the end of the quarter.
A better way to track total revenue is as a percentage of your quarterly goal over time. For example, if your expectation is to make $6 million in sales in Q1, then you might consider measuring your total revenue every month. If you hit $2 million in January, then you’ve reached 33% of your target.
2. Quota Attainment
Quota attainment is a sales metric that measures what percentage of a target quota your sales team has reached for a specific time period.
Quota attainment is calculated using the following formula:
If your team has a sales quota of $4 Million and has sold $2 Million so far, their quota attainment would be 50%.
3. Participation Rate
Participation rate is a KPI that measures what percentage of your sales team has reached their quota.
If 6 out of 10 of your sales reps have hit their quota, then the participation rate would be 60%.
The participation rate lets sales managers know how well their team is performing as a whole.
Measuring your team’s participation rate helps sales managers identify opportunities for extra coaching for sales reps who are falling behind.
4. Deals Won
Deals won is simply the number of deals your team has closed for a specific period of time. It can also be used to measure how many sales your team needs to make in order to reach quota.
For example, if your team’s quota is $10K and each sale is worth $1K, then your sales reps need to collectively win 10 deals in order to hit their quota.
5. Deal Win Rate
Deal win rate is a metric that tracks the percentage of deals closed as won. It measures how effective your sales reps are at closing deals.
The deal win rate is calculated using this formula:
(Deals won / Total deals closed) x 100
If your deal win rate is low, you should consider offering extra coaching around deal closing to your sales reps.
6. Annual Contract Value (ACV)
The annual contract value is the total amount of revenue a contract brings in each year. The ACV is particularly helpful for companies who have yearly or multi-year contracts.
The annual contract value is calculated using this formula:
ACV = total contract value / contract term in years
7. Sales Forecast Volume
The sales forecast volume is the total revenue you expect to make in the coming period. It’s useful for forecasting your team’s future sales and assessing if your sales reps are on track to reach quota.
8. Sales Forecast Accuracy
Sales forecast accuracy is a measure of how accurate you are at forecasting your sales.
Sales forecast accuracy is calculated using this formula:
(Actual sales volume / Sales forecast volume) x 100
The sales forecast accuracy is expressed as a percentage, where 100% means you were spot on. For example, if your sales forecast volume was $1 Million but you actually only sold 800K, then your sales forecast accuracy would be 80%.
9. Sales Cycle Length
The sales cycle length measures the average length of time it takes your sales reps to close sales opportunities. It is typically measured in days. Obviously, a shorter sales cycle is ideal.
Like participation rate, the sales cycle length can help sales managers identify the need for extra coaching to improve sales performance if, for example, the sales cycle length is abnormally high.
10. Customer Lifetime Value
Customer lifetime value is a measure of the total amount of money a customer is expected to spend over the lifetime of an average business relationship.
The simplest way to calculate customer lifetime value is:
average value of a purchase x number of times the customer will buy each year x average length of the customer relationship (in years)
How Spinify Makes it Easy to Measure Sales KPIs
Spinify makes sales management easy. We offer the best solution for engaging, motivating, and coaching your sales reps with the right KPIs, targets, and metrics. With Spinify, sales managers can choose multiple metrics, KPIs, and targets for your sales reps to improve sales performance.
If you want to choose the perfect KPIs for your sales reps, BOOK A DEMO of our solution today!
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