Sales KPIs: Finding the Best KPIs for your Sales Team

Rising Indicator

09 Feb Sales KPIs: Finding the Best KPIs for your Sales Team

Your sales team drives revenue. It’s the group that takes all the hard work that the rest of the company has put into researching customer needs, creating a great product, and marketing its strengths. Because of how important this group is, you want to watch and see how effective they are at generating revenue. But with all the data that your business produces, determining the right KPIs for you to monitor can be extremely challenging. Of course, you want to monitor revenue. But there are a lot of factors that go into how the sales team generates that revenue.

To figure this out, we’ll need to talk about leading and lagging indicators.

Leading vs. Lagging

You can group most metrics into either leading – the actions that lead to results – or lagging – the results that lag behind actions. Leading KPIs measure the activities your sales team perform in order to generate revenue. Sometimes these are easy to measure – total sales calls, total new opportunities. But some are more difficult because they measure qualitative information, like lead quality ratings or predicted opportunity costs.

Here’s a few of the more common leading KPIs:

  • Outbound Calls Per Hour
  • Weighted sum of deal size in sales pipeline
  • Number of closed sales opportunities won
  • Number of closed sales opportunities lost
  • Average cost per lead of inbound marketing
  • Online Telesales Training percentage

Lagging KPIs, meanwhile, show the results of your sales activity. Think of it as the score you get for the actions you take. You can measure these pretty easily. Most sales teams live and die on these metrics. In fact, your primary sales KPI probably lives in this category. But you can’t directly affect these KPIs as easily, as they take some time to reflect the work you put into them. Sometimes, won’t know what actions exactly moved the dials on your lagging KPIs until six months to a year later.

Here’s a few of the more common lagging KPIs:

  • Sales to-date
  • Attrition or churn
  • Average discount margin % of items sold
  • Customer Growth Rate
  • Customer Retention Rate
  • Revenue per Contract
  • Average customer acquisitions costs
  • Sell Cycle


Leading and Lagging Together

Pie ChartJust measuring how you’re doing with lagging indicators won’t cut it. You’ll get a clear picture of how your sales team is performing, but you won’t have any idea about how to improve them. You’ll be able to spot long term trends, but you won’t have any control over them in your day-to-day sales activities. But if you can link your activities tracked by leading metrics to the results tracked by lagging metrics, you can start making real improvements in your sales process and revenue stream.

One of the first things to do is figure out your sales cycle. That means breaking down each of the steps of the process, from initial lead acquisition to closing a deal. You can use leading KPIs to help figure out the length of time between each stage. Use KPIs like the average time from customer contact to sales response or to sales opportunity to monitor them and set lower targets. The shorter the sales process is, the easier it is to link your activities to the results.

Monitoring KPIs that time your sales cycle can also help spot roadblocks. If it takes weeks from when a lead comes in to when the salespeople make the first contact, you may have spotted a roadblock. Maybe the lead information isn’t readily available, maybe the sales staff is swamped by their existing work. Whatever the cause, you can pin down the places where prospects get stuck and determine more efficient processes.

When you make changes, you’ll need to monitor how well your sales reps comply with these changes. If you change a sales script or marketing process, there’s going to be a few veterans who bristle at being told to modify their routine or a few new hires who slip up. Track these errors and see how they affect the sales cycle. You may need to add more training to get all reps onboard – another KPI you can track through the change process.

When you’ve got a handle on your process, you can start identifying what changes work. You may need to experiment to see which leading KPIs best reflect your team’s efforts and show the most impact on your primary lagging KPIs. Check your historical data and find KPIs that correlate with changes in your primary metrics. Take into account sales cycle timing, as well as changes in process that may have affected those results. But with a little analysis and planning, you can create a dashboard view that perfectly captures the work your team puts in and the results that they get.