Have you ever seen a crystal ball in movies through which the future can be predicted? That thing is unreal for sure. But having Key Performance Indicators(KPIs) by your side, you can achieve something similar. Wait, is it some magic ball? What are KPIs for? How can KPIs help in improving sales growth? How to optimize them? Let us find out.
What are KPIs, and Why are they Helpful for Businesses?
KPIs, short for Key Performance Indicators, are basically indicators that help business leaders and sales reps to gauge how impactful and effective their efforts are.
KPIs give you insight into your performance over a particular period to make better business decisions in the future. Not only it benefits companies by generating more leads and traffic. But it also helps in improving the ROI of companies.
In other words, we can say that KPIs are actually the metrics that companies track to gauge the effectiveness of sales and marketing efforts. But do you know what the best thing about KPIs is? You can configure them as per your business or team needs.
And why key performance indicators are helpful?
Because these indicators help you understand what strategies are helpful/working and which strategies are not, this information enables you as a business leader to adjust your efforts according to the information.
So if you want to determine your sales performance and make it more effective, dive into this blog and understand how to optimize KPIs for better sales.
5 KPIs for Better Sales
The most crucial thing for any sales organization is to gather the correct information or data. Therefore, the sales leaders must know the utilization and interpretation of the data. And a great way to interpret and use the data is through well-defined KPIs.
If you do not have a clear picture of your sales performance, it will be difficult to predict future sales. Not only that, but without having a clear overview of your business, you can not guide your company and employees in the right direction also.
Opportunity to win ratio
With the help of this sales KPI, we get to know how effectively a sales manager or team closes accounts. While tracking leads to opportunities measures how interests convert into the discussion, this KPI determines how discussion converts into sales.
By analyzing the ratio this KPI provides, you can conveniently gauge your sales team’s success rate in converting leads into sales. With this vital data, you will get insight into your sales team performance and get to know:
- Who are the ones good at creating opportunities but find it challenging to convert leads into sales?
- Who are the ones great at converting leads into sales but not as good in the initial contact with the potential customers?
With the help of the valuable information provided by this KPI, you can train your sales team members and work on the areas where they lack the most.
Sales per rep
This KPI’s(sales per rep) job is to measure the individual ability of every sales rep to generate revenue for your company.
The sales team members, usually, are competitive by nature. So by using this KPI, you can also foster healthy competition among your sales team members, which will encourage them to perform better. Further, you can also use this KPI to identify your sales rep’s weakness and their strengths.
However, establishing a baseline while comparing your team members is the most crucial sales per rep KPI component. You should know that not every sales rep is not created equal in terms of capabilities. Therefore, the baseline that you would establish must account for several differences such as:
- Inbound sales
- Outbound sales
Or else, this KPI can be utilized as a growth and performance improvement tool.
The purpose of this return on marketing investment KPI is to gauge how much revenue a sales campaign has generated or is generating compared to the cost that has been spent on running the campaign.
High-performing marketers invest their money, time, and marketing efforts that contribute to the business’s success. But at the same time, to produce great results, there is a need for a metric that can measure if the time, money, and efforts spent in developing and running a campaign is worth it or not? Return on marketing investment KPI serves this purpose efficiently.
However, not every KPI is perfect. Some KPIs also lack in particular areas. Likewise, ROI KPI also poses a little difficulty. While it is a vital KPI, it may not always detect a direct return in some situations. For instance, if your potential customer views an ad without clicking and visits your site sometime later, it may not be determined by this KPI.
Cost per customer acquisition
By summing up the cost of marketing and sales over a particular time period and dividing it by the no. of new customers gained in that time frame, this KPI can tell us how much it costs to acquire a new customer.
The measurements of this metric can include changing fixed and variable costs, depending on how much insight you want into your acquisition cost.
This KPI measures each steps cost involved in converting a lead into a paying customer(sales). Not only that, but it also determines the cost spent on research and marketing purposes.
So, in short, with the help of cost per customer acquisition KPI, you will be able to know what routes are the most beneficial and efficient for your company and budget. Not to mention, this KPI is also a great way to identify your company’s product priorities.
If your business’s sales growth is positive, your company is on the right track and heading towards your sales goals. So do you not think that tracking your company’s sales growth should be your top priority to grow your business? Sales Revenue is the KPI that allows you to do so!
Sales revenue is an easy to comprehend KPI that enables businesses to track their progress in generating sales revenue. With the help of some valuable data, this KPI allows you to gauge your company’s growth projections and trends. It is beneficial on both individual and collective levels. It does not only track the overall growth of a business. But you can also make use of this KPI to develop dedicated goals for your sales reps.
With that being said, this KPI is a great way to boost your business’s growth, not to mention its revenue.
Interesting fact: Do you know that many companies display their KPIs on a dashboard? These numbers motivate the employees and increase the overall company’s productivity.
The sales KPIs mentioned in this blog can not only boost and optimize your sales processes. But you can also make sure that you and your team are heading in the right direction or not. With the help of these KPIs, you can get insight into the performance of your business. And can direct your team business towards success.
So if you want your company to benefit from these KPIs, what are you waiting for? Consider integrating them into your business now.
We hope that this blog has served your purpose. If you are interested in reading more, check out this blog: