Top 10 sales KPIs you should be measuring in 2021
Defining clear goals such as sales growth of 25%, profit increase of 5% or an acquisition of 138 new customers is an excellent and necessary step to determine company’s direction for a particular year. Does it mean that everybody inside the company knows automatically what he is expected to do in order to execute this goal? Not necessarily
The same goal, different actions
Defined goal carries a totally different meaning for a sales director and an ordinary salesman. Analogous situation may concern other departments. That being the case top – down goal first of all, should be interpreted by particular business lines, then broken down into components and later on forwarded to particular employees as an individual objective.
Turn general goals into individual ones
It is worth defining individual goals by using a reverse engineering method. For instance: How many deals do I need to finalize to reach my target? Knowing the number of deals I need to clinch as well as lead-to-customer conversion rate I am able to calculate how many prospects should enter the pipeline. What does that mean from the quantity of leads perspective? What type of channels am I going to use to acquire them?
Pick the right sales KPIs
Here is a list of top 10 KPIs in B2B sales coupled with description and justification, why should you keep an eye on them:
- A number of calls made and a quantity of emails sent by a sales rep daily, weekly and monthly
Take advantage of that KPI if you wish to feed your pipeline with a greater amount of leads. By monitoring a number of conversations with potential customers you will find out what is the intensity of prospecting activities of the whole team and that of individual salespeople.
- Lead response time
Nobody likes endless waiting for a reply. The same applies to your customers. Regardless of whether they enquire by phone or via email reaction time should be swift. That is what lead response time is accountable for. The quicker the reaction the greater the chance of having a successful sales process
- Lead to opportunity conversion rate
By keeping an eye on a percentage of leads that convert ultimately to opportunities you will gain a valuable information concerning effectiveness of prospecting activities. You can analyze the abovementioned indicator e.g. in terms of particular marketing campaigns to see which are effective and which are not. Invite your marketing director to monitor this indicator. A slight cosmetic alteration of a profile of a targeted customer may increase an effectiveness of marketing campaigns even by 100%!
- Pipeline value
Undoubtedly, it is one of the most important sales KPIs in B2B sales. Pipeline value has an incredible meaning for future results. If a total value of all the opportunities in your pipeline is low, reaching a designated target seems problematic. How to prevent that? Calculate what the opportunity to customer conversion rate is. If your closing ratio amounts 20% and a target 1M USD than the value of a pipeline should be kept on the level of no less than 5M USD. To put it bluntly, you need a number of opportunities worth 5M USD, so that having a closing ratio on the level of 20% allows you to achieve sales result of 1M USD.
- Duration of a sales process
It is an indicator which illustrates how much time a lead to customer conversion takes. If a value of your pipeline this quarter has reached a safe level, it does not mean that the final result of that quarter will be equally satisfactory. Assuming that the sales cycle in your area takes 6 months the result of your quarter will heavily depend on whether you took care of your pipeline a half a year ago.
- An average transaction value
Knowing an average transaction value (profit generated from sales to new customers divided by a number of new customers) you will be able to state an exact number of opportunities, if successful, will allow you to hit your sales plan. If your target equals 1M USD and an average transaction value stands at 50k USD you need at least 20 opportunities on the last stage of a sales process. Having a confirmed status of these opportunities indicates that you are on the right track to realize your target.
- Customer acquisition cost
Do you realize how much time you need to spend in order to acquire a new customers? When you aggregate all expenses including expenditure on marketing campaigns and adverts e.g. social media, you will find out if a total cost of acquiring a customer does not exceed the revenue, which that customer may generate. It is a great indicator which helps you to optimize your costs.
- Forecast accuracy
If you use a CRM provided by Salesforce or a different one which allows you to determine a status of a pending opportunity inside a pipeline then, you are in the know that the sales likelihood between 60-90% means, that a sales rep declared a deal closure within a designated period of time. The higher the percentage the more confident the sales rep is about a successful deal finalization. Even if that certainty is strengthened by additional assessment, it may happen that the deal won’t be concluded or conclusion will arrive at a later date. That is what forecast accuracy is all about. It will clearly outline the declaration of a sale rep to a real business conversion rate.
- Monthly sales growth rate
If your results are flat it means that your business has been dwindling. The following indicator allows you to assess current sales results, and in the event of unexpected falls implement necessary improvements. Monitoring quarterly and annual results is necessary however, month to month results allow you to undertake prompt steps in real – time.
It is of no surprise that the following indicator concludes our list. The king of KPIs, on the face of which you lay your business foundations. In order to execute your goals you need all the teams on board. The level of target achievement is not only indicative of efficiency, determination and effectiveness of a sales department, but every single division supporting business. Ideally if it exceeds 100% every year.
Wishing you 100% target achievement every year I would like to encourage you to use selected sales KIPs. I am more than sure it will give you the confidence the ship you are captain of is sailing towards the right destination. At the same time your ship crew will gain the conviction their captain knows what to do even during stormy weather.