10 Sales KPIs Every Sales Leader Should Be Measuring in 2022
If you work in sales and you want to get a clear-cut view of how your business is performing, then you need to know which KPIs reflect the current situation and which reflect your future goals. Naturally, sales KPIs are different from company to company, and they are always set around company-wide business goals. Depending on business goals, one company may only aim to increase sales revenue, while another one can set KPIs that are also aimed at optimizing the sales budget.
So, which sales KPIs should you include in your next sales dashboard? Sales leaders typically select the following 8:
Average Sales Per Sales Rep
There are two main reasons why average sales per account are the number one Sales KPI to measure:
- It gives you an idea of how well each of your sales reps is performing, and therefore where you need to focus on improving performance.
- It also gives you an indication of whether or not you need to recruit more salespeople.
Revenue Per Employee
The value of revenue per employee is that it both incentivizes and rewards sales leaders for building a high-performing team, rather than just focusing on revenue. This is especially important in organizations where individual employees are responsible for millions of dollars in annual revenue, which can make it difficult to measure their performance on a more granular level.
Average Order Size (AOS)
Average Order Size (AOS) is an important sales metric for e-commerce businesses because it helps you determine the average amount of money a customer spends each time they place an order.
Using this metric can provide insights into what your customers want and how much they are willing to spend. The AOS number will change over time as you add or remove products, target new markets, and pivot your selling strategy.
Customer Lifetime Value
The CLV is an essential metric that enables you to measure the financial value of your customer over their lifetime. CLV can be calculated by taking three variables into account: average revenue per user (ARPU), churn, and net present value (NPV).
A high CLV is essential for growth. If your CLV is low, then the value of each new customer acquisition will have to be higher. This means that you’ll need to spend more on marketing or upsells in order to make up the deficit in revenue growth.
Average Marketing Cost to Acquisition
This metric tracks how much it costs to acquire a customer through marketing programs. It’s often expressed as a cost per acquisition (CPA), which is calculated by dividing the total cost of marketing by the number of new customers acquired. The higher this number, the more expensive it is for the company to acquire a customer. Sales leaders should work closely with marketing to reduce CAC and identify how to get more value from their marketing budget.
If you’ve already sold something to someone, how likely are they to buy more? For example, if a customer buys an iPhone X at $1,000, how much additional revenue is that customer worth? The upsell rate answers that question.
For example, if your upsell rate is 10%, this means 10% of your customers will buy a second product from you after they’ve purchased the first one. Your goal should be to increase this number by 1 or 2 percentage points per month until it reaches 30%.
Sales efficiency measures how effectively your team manages their time to generate revenue. Or in other words – how efficiently your team is converting leads into opportunities and opportunities into closed deals.
If you are leading your sales team, these KPIs can help you stay on track with your team’s performance. To get additional insights, it’s also recommended to benchmark your numbers against other companies in similar industries.
Kristen McGarr is a Fractional Chief Sales Officer helping businesses strategize. She has been helping small to mid-sized businesses grow through effective sales and marketing for 20 years. Kristen considers a strong process and solid analytics to be key factors in any organization’s success.