Discover your Sales Motions: 10 Sales KPIs Every Sales Team Should Track

February 12, 2019

Although salespeople are traditionally motivated by cash and prize incentives, sales leaders may be surprised by the power that data gives them to increase competitiveness and find the levers that lead to more closed-won deals from their teams. In addition to tracking sales performance, key performance indicators (KPIs) can be used to motivate sales teams and increase the revenue they produce.

10 Sales KPIs to Increase Competition and Close More Revenue

As you establish KPIs for your team, you may find that some are more effective than others. Sales metrics also depend on the structure of your team, the goals of your organization, and the data you have available. Use these sales KPIs as a starting point for creating your own ideal report or dashboard.

1. Sales Leaderboard

A sales leaderboard is a powerful tool to encourage competition among your sales team. By showing how each rep is tracking towards sales goals, it’s easy for the sales manager to see who’s leading the pack and who’s falling behind. If you use an openly shared sales dashboard, the competition gets even fiercer as no one wants to be caught lurking at the bottom of the chart.  

In Action: Depending on your organization’s structure, growth stage, and objectives, you may want to track revenue, number of deals, or deal size by sales rep on your leaderboard. You can also use it alongside quota attainment metrics to ensure you’re setting effective sales targets and quotas for your team.
Formula: Sum of Sales for Rep A, Sum of Sales for Rep B, etc.

2. Sales by Channel

As a sales leader, you want your team to spend their time on leads that are most likely to convert to closed-won deals. Tracking sales by channel shows which lead sources are producing the most or biggest deals, including those managed by the marketing team as well as customer referrals, partner referrals, etc.

In Action: To be more effective, you can evaluate sales by channel by count, value, deal size, and more, and optimize your strategies to get the results you want.
Formula: Sum of Sales from Channel A, Sum of Sales from Channel B, etc.

3. Opportunity-Win Ratio / Win Rate

Opportunity-win ratio, also known as win rate, is an incredibly important performance metric that tells you how well your reps handle at-bats with qualified potential customers.

Most teams will have opportunity-to-win as a stage in their sales funnel, however, if your funnel is more complex—including SQLs, trial periods, etc.—you’ll want to track conversions between each of those stages so you can see whether you have “leaks” in other areas.

In Action: In addition to tracking win rate by team and rep, you may want to calculate by count and by contract value. Your win rate might look excellent on the surface, but measured by contract value, it could show that you’ve missed out on a lot of potential revenue from larger deals. If so, you’ll want to dig in to understand the cause.
Formula: Opportunity-Win Ratio (Count) = (# of Closed-Won Deals) / (# of Opportunities)Opportunity-Win Ratio (Contract Value) = (Total Contract Value of All Closed-Won Deals) / (Total Contract Value of All Opportunities)

To learn more about how to break down the stages of your customer acquisition funnel, check out Lead to Loyal: 6 Steps to Mapping Your Customer Acquistion Cycle Using Your Salesforce Data.

4. Total Contract Value (TCV) & Annual Contract Value (ACV)

To understand the revenue you earn from each sale, use total contract value (TCV) or annual contract value (ACV). While TCV looks at the total period of the contract, ACV only considers the 12-month value.

Two related metrics can tell you more about your sales revenue: average deal size and annual recurring revenue (ARR). Average deal size looks at the average sale price of all closed-won deals, and can be calculated as your average TCV. ARR is similar to ACV, but looks only at recurring revenue, not any one-time fees (implementation, training, etc.) that may be included in a contract.

In Action: If the majority of your contracts are year-long, you may only need ACV—your TCV won’t be much different. On the other hand, if your contracts frequently vary in duration, you’ll want to track both. TCV will show you the big picture while ACV will allow you to compare contracts on an even playing field.
Formula: TCV = Total value of the contractACV = (TCV / Contract Duration in Months) * 12Ex. A $36k deal with a 2-year contract would have a TCV of $36,000 and an ACV of ($36,000 / 24) * 12, or $18,000.

5. Average Revenue Per Account (ARPA)

ARPA, or average revenue per account, tells you how much revenue you earn on average from each account/customer per month.

In Action: Tracking ARPA per rep can be a useful method to encourage cross-selling and upselling on your team as they try to increase the revenue they produce through their accounts.
Formula: ARPA = MRR / # of Active Accounts

6. Average Sales Cycle

How long does it take your team to close a customer? Calculating your average sales cycle is a valuable way to manage expectations and estimate close dates. Various factors can impact sales cycle, such as rep experience level, the specific product or service being sold, company size, geography, etc., and you may want to drill down on each of them.

In Action: You can also use your average sales cycle metric for sales pipeline cleanup to identify “deadwood” opportunities that aren’t progressing and may be less likely to close.
Formula: Step 1: Add together the # of days from first contact to customer conversion for all sales combined. Step 2: Average Sales Cycle = (Total # of Days) / # of Deals

7. Churn Rate

You want your team to close a lot of deals, but you also want paying customers to stick around. An effective way to help your reps understand the importance of this principle is to track churn rate by rep. Remember, a salesperson who closes a lot of deals that end up churning may be costing the company more in the long term.

In Action: As with many other metrics, you can look at churn in two ways: Customer or Logo Churn, which is based solely on deal count, and Revenue Churn, which allows you to measure both lost customers and downgrades.
Formula: Customer (Logo) Churn Rate = (# Customers at Start of Period - # Customers at End of Period) / # Customers at Start of PeriodRevenue Churn Rate = (Revenue Earned Last Period - Revenue Earned This Period) / Revenue Earned Last Period

8. Growth Rate

Growth rate can be a highly motivating metric, particularly in the early days of the company, when it’s much easier to see rapid, “hockey stick” sales growth. Over time, you’ll need to produce much more new revenue each month to sustain it, at which point growth rate may not be as useful for your team.

In Action: Gather the team together to celebrate each milestone you hit. Getting people involved and invested in the success of the company as a whole can boost energy among your sales team.
Formula: Growth Rate = (Current Period Net Sales - Prior Period Net Sales) / Prior Period Net Sales

9. Quota Attainment

Your sales reps live by quota. As you set sales goals and identify targets, quota attainment is critical to consider: How many of your reps are hitting their number? How close are you to reaching your overarching team goal? Are your quotas and stretch goals high enough to maximize performance, but low enough to be within reach?

In Action: You’ll want to calculate quota attainment both by dollar value and by rep to truly understand and empower their performance.
Formula: Quota Attainment (Reps) = # of Reps Who Attained Quota / Total # of RepsQuota Attainment (Value) = Total Sales ($) / Sales Target ($)

10. Monthly Revenue vs. Forecast

Tracking your monthly revenue against your sales forecast allows you see how you’re progressing towards your sales goal. Many teams depend on reps to self-report their revenue forecast, but for such an important sales metric, you should rely on data to calculate it.

In Action: If you fall significantly short of your forecast, you can dig into your data and discuss the problem with your team to see what went wrong and how to prevent it in the future.
Formula: Total Revenue: Please reference your organization’s CRM or accounting software.Revenue Forecast: Simple formula: Forecast Revenue = (Predicted # of Customers) x (Average Deal Size)More specific: Forecast Revenue = Weekly Ops Created * Win Rate * Avg. Deal Size * Sales Cycle Distribution

BONUS. Golden Motions Analysis

Golden motions analysis isn’t necessarily a metric or formula, but it can help you better predict purchase by analyzing correlations between customer and rep behaviors. This analysis can help you set activity goals, such as number of dials or emails sent, to help your team close more deals.

In Action: If one of your reps is having big success with a particular strategy, have them share it with the team so that everyone can try it out and add it to their playbook.
Formula: Frequency of ‘Motion’ vs. Frequency of Outcome

Check out the webinar, 6 Sales Metrics You Should Be Tracking (But Probably Aren’t), or read the recap.

Get More from Your Sales Team

Revenue is the lifeblood of a company, and sales teams are critical to closing new revenue. As a sales leader, it’s your job to get the most out of your reps, and help them get the most out of every deal. The best way to accomplish this is to analyze and evaluate your team’s performance using data. Sales KPIs help your team understand and meet expectations, so you can focus on solving problems in the business.

Maximize the Power of Metrics with a Sales Dashboard

If you want to truly motivate your team with data, you have to get the numbers in front of them on a regular (if not continual) basis. While you can send out emailed reports on a daily or weekly basis, this approach weakens the power of the KPIs to impact rep behaviors.

On the other hand, displaying KPIs on a sales dashboard amplifies that power, especially with your sales leaderboard. Never underestimate the power of public glory—or public humiliation. Everyone wants to see their name at the top, to be known as the top performer. Tracking the other metrics we’ve suggested can help you help your reps improve their individual performance and close more deals.



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