Sales KPIs

January 13, 2023

What are they? KPIs are performance measures used by the sales team to identify the performance of activities within the company, with each area of a company having performance indicators to be analyzed. There are many KPIs, and with them, it's possible to optimize performance, analyze the sales funnel, and sales cycle duration. KPIs are not the same as metrics, but a metric can be a key performance indicator, as a KPI is a relevant indicator for the company, whereas a metric is just something to be measured. Here are some key sales performance indicators that will help enhance your business:

Customer Acquisition Cost (CAC): It's the cost a company incurs to acquire new customers, used to measure how much return you've had from the investment made to attract more customers. CAC is measured by the sum of the costs associated with converting a lead into a customer.

Average Ticket: It is analyzed based on the number of deals closed over a certain period, and the calculation of the average ticket can be done based on the number of sales or the number of customers.

Conversion Rate: It's acquired based on the opportunities generated, but only those that converted into sales. Analyzing the conversion rate is relevant as it indicates the strengths and weaknesses of the sales process. The calculation is simple: Conversion Rate = Total Sales ÷ Opportunities Generated.

Churn Rate: It's the index that indicates customer or revenue loss. To calculate it, divide the number of customers lost by the end of the period by the total number of customers who started. For example: if there was a loss of 10 customers out of 100 = 10% churn rate.

Follow-Up Rate: It's used to show how many contacts are needed for a customer to make a purchase. Its main objective is to determine the best time to make the sale, so it's important to follow up on prospect contacts to avoid losing potential customers.

Sales Cycle: It's the time from pre-sale to post-sale. The stages of the sales cycle represent the essential phases to sell a product or service.

Lifetime Value (LTV): It indicates how much value a customer delivers to your business, referring to how much you earn with that customer during their time with your company. This sales KPI evaluates the sum of all the revenue that the customer consumed from your brand during their relationship with it. Although attracting new customers is crucial for any business, Lifetime Value aims at customer retention. For example, if you have a customer who regularly pays a subscription fee of $200 monthly and this customer remains in your base for 12 months, your LTV will be $2,400.

Monthly Recurring Revenue (MRR): It's essential for subscription and SaaS businesses, as it demonstrates the estimated sales of companies that are subscription contracts. With it, you can measure the company's current financial health and plan future gains.

Conclusion

For a company, it's important to have well-defined KPIs, as this will help in the analysis of indicators and identify the strengths and weaknesses of your business. If you enjoyed this text, be sure to check out the latest updates on our blog.

Raquel Sales

Head Marketing - Sales Journey

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