Category: Sales Metrics


24 KPIs Every Sales Manager Should Measure in 2020

Sales managers — and particularly field sales managers — can often feel like they are trapped in a fog. Without a regular physical presence in the field, it’s difficult to keep tabs on their team and business operations. Instead, they rely heavily on their field representatives to be their eyes and ears.

The best way for field managers to gain visibility into their team’s activity is to collect and measure both team and product performance through KPIs. KPIs, or Key Performance Indicators, are metrics used to track the performance of a business, a department, or individuals against goals.

The key is to choose the KPIs that are most relevant to your industry and business goals — focusing on the wrong ones can be costly to your company. To save you some time, we’ve narrowed down a list of commonly used KPIs — identifying the ones we believe are most important to managing field sales teams.

1. Sales Volume by Location

By comparing sales volumes across locations, including physical stores and online transactions, you’ll see where demand for your product is highest and lowest. From there, you can figure out why. 

If sales volume is large in region A, perhaps there is a higher demand there, in which case you can focus on customizing certain products and services for that region. Or, if you are comparing numbers across physical stores, you can take advantage of A/B testing.

For example, if two locations see relatively similar sales volume in January, try implementing a promotional sale in one location and not the other in February to see if it drives sales.

In addition to promotional sales, you can try other tactics such as shelf displays, discounts, coupons, demos, or samples.

2. Competitor Pricing

While managers and business owners shouldn’t track competitors’ every move, being aware of their pricing can help create a competitive strategy. If your prices don’t differ much, you can consider a price-matching strategy to guarantee your customers the lowest prices — and you the most sales.

Additionally, by keeping track of the average retail price of your products, you can measure the impact of cutting your prices or implementing a promotion.

And make sure you’re training your reps to handle pricing objections appropriately. Try role-play exercises so they’re prepared to discuss price without defaulting to discounts.

3. Existing Client Engagement

Maintaining good rapport with customers after the sale is important to ensure long-term business. By regularly touching base with their customers to understand how things are going and how they can help, salespeople can build trust and keep customers happy.

When reps are consistently available to help, customers know they’ll always have somebody there to support their business needs.

Beyond benefiting your company’s business outlook, keeping in touch with clients supports your business’s strategic goals as well — it’s a sales metric that matters.

Ask your salespeople to keep a tally of interactions they have with each of their customers, then compare the number of touches to the average length of a client relationship.

If, for example, you notice that your top 10 long-term clients touch base with their sales rep approximately once per quarter, take a deeper look. What do those touch bases look like? How often do reps encounter an issue they’re able to help their client solve?

4. Employee Satisfaction

Ready for some sobering news? A 2018 survey by Marc Wayshak found only 17.6% of respondents rate their job satisfaction as “outstanding.” Think that’s bad? 47.1% rated their jobs as just “good.”

Working in sales requires persistence, and sometimes representatives can run out of steam. So one of your biggest challenges is making sure your sales reps are motivated and enjoy their work.

With a remote workforce, how do you keep your sales force in sync? Do they feel like they’re part of a team? Do they agree with the sales methods that you’ve implemented?

Employee feedback is crucial to a successful sales culture. KPIs are used not only to measure your team members, but also your performance as a manager. Employee satisfaction can be difficult to quantify.

Try asking each employee to rank their job satisfaction on a numeric scale, along with a few qualifying questions to understand what’s making them happy or unhappy, then compare the results against your goal. It’s also a good idea to learn how to spot burnout in your salespeople and determine a plan to combat it quickly.

5. Upsell and Cross-Sell Rates

Who are the most qualified leads in your CRM? Your existing customers. Have your reps track their upsell and cross-sell numbers, and use that data to identify whether certain verticals respond well to certain product or service pitches.

For example, if reps have good luck selling Feature X to clients with Product Package Y six months into their tenure with you — this might be a worthwhile milestone to add to your sales process.

Look at when, how, what, and to whom your reps are upselling and cross-selling, and adjust your efforts accordingly.

6. Net Promoter Score (NPS)

Your NPS is a measurement of how likely customers are to recommend your product/service to someone else.

The survey asks participants to rank the likelihood of a recommendation on a scale of 0-10. Their numerical ranking is divided into three categories:

  • Promoters (9-10): They like you — they really like you. Not only will these customers likely renew, but they also won’t hesitate to recommend you to friends or colleagues.
  • Passives (7-8): They’re satisfied, but that’s about it. Passives are ripe for the competitive picking, because they feel your product/service is status quo.
  • Detractors (0-6): They don’t like you — they really don’t like you. Detractors will likely churn, might tell others to avoid doing business with you, and will do the most damage to your brand.

Send your NPS regularly — and remember not to send it too early to new customers. There will always be kinks that need to be worked out of the system before an NPS is sent.

Cadence of survey sends depends on your business and goals. As a rule of thumb, start by sending an NPS every three-to-six months.

To calculate your score, subtract the percentage of detractors from the percentage of promoters. You can also use this handy NPS calculator.

7. Sales Cycle Length

Similarly, it’s important to look at the average length of your team’s sales cycle. Are some reps closing in three weeks while others are closing in six? What are the respective churn rates six months from onboarding?

Analyze what sales cycle length produces the highest number of closed-won business. And don’t forget to also look at how successful those deals are down the line.

If you have a rep who’s closing business in record time, but you find that their customers are dissatisfied with your solution and often churn after nine months, a longer sales cycle might yield a healthier business.

Once you have data on your KPIs, analyze the information to understand why you got those results. Then, determine how you can improve performance and follow through with action. And remember, as important as establishing KPIs are, they must be always tied to an overarching goal.

8. Customer Lifetime Value (CLV)

As per HubSpot’s own definition, “Customer lifetime value is the metric that indicates the total revenue a business can reasonably expect from a single customer account. It considers a customer’s revenue value, and compares that number to the company’s predicted customer lifespan.”

It’s a crucial metric to determine which customer segments or buyer personas will drive the most revenue for a company.

Its applications aren’t limited to accounting for broad portions of your customer base. The figure can also be used to gauge the value of individual accounts and, in turn, your account managers’ ability to engage existing clients. Their ability to consistently provide value to their clients can be measured, in large part, by the value they offer back.

An account manager can demonstrate they’re actively involved with their clients with a high average customer lifetime value. It shows they know how to establish rapport and keep clients loyal to your business as time goes on. It’s a valuable KPI to bear in mind when getting a feel for account managers’ overall performance.

Your business development representatives are actively prospecting, often using cold outreach methods. The following KPIs can help sales managers track BDR performance:

1. Activities

The number of BDR sales activities per rep in a set amount of time can give you an indication of their productivity level. You might consider measuring:

  • Number of calls
  • Number of emails
  • Meetings scheduled

Keep in mind that this won’t tell the whole story. Some reps may focus on quality over quantity. However, it does give you a baseline for measuring productivity.

2. Opportunities Created

This is the metric that managers most consistently monitor.

As alluded to in the previous section, sales activity means nothing unless it results in tangible pipeline growth. For this reason, productivity metrics such as sales activity are best compared to the number of opportunities created by the BDR.

You’ll get insight into which activities are working best and which reps are generating the most results from their efforts.

How are your salespeople contributing to the expansion of your business in their given territory? Who’s reaching their quota? What percentage of your team is hitting their number? Is quota too high? Too low?

Share this data with your team so they can see how they stack up against other reps. There’s nothing like a little competition to get your team motivated.

3. Proposals Sent

Whether the BDR hands off or nurtures the relationship themselves, the number of proposals sent can give you an indication if BDRs are prospecting to the right people and generating SQLs and opportunities that have a genuine interest.

4. Deals Won

While a BDR isn’t responsible for closing business, you want to keep a pulse on how much new business results from your outbound efforts. Monitoring the number of deals won per rep and across the rest of the team can help you make sound decisions when budgeting and reinvesting in sales plays.

5. Client Acquisition Rates

Another commonly used measurement is rate of client acquisition. Of the new prospects your reps reach out to, how many convert to customers? It’s natural for some salespeople to perform better than others — but if there are large discrepancies between conversion rates, dig deeper.

Are lower-performing reps approaching bad-fit prospects? Is there something that over-performers do in sales meetings that others don’t?

Compare conversion rates to the number of prospects a rep reaches out to. If you find that conversions decrease after a certain number of touches, use that number as a benchmark to prevent your reps from getting burned out or stretched too thin.

Finally, use conversion rates to compare different outreach methods, such as emailing or cold calling versus pursuing face-to-face interactions.

While some of the KPIs in the previous section may also apply to your sales development representatives, keep in mind that SDRs primarily respond to inbound leads. For this reason, you should be tracking their performance with these KPIs as well:

1. Average Response Time

If a lead is flagged as qualified by your marketing team, or if that lead indicated interest by filling out a form, there’s no time to waste and no need to keep the lead waiting. Always benchmark response time and encourage reps to improve it. That way, they’re catching leads while the pain or problem is top of mind.

2. Percentage of Leads Followed Up With

You want your SDRs to be making contact with all qualified leads, and that won’t happen if your team is cherry picking. This metric can also give you insight into productivity and bandwidth.

3. Positive vs. Negative Reply Rates

When tracking this KPI, consider all prospect replies through any channel as being binary — the prospect either is or isn’t interested. It’s based on sentiment, not customer acquisition. That’s what differentiates this metric from others.

It’s also notable in that it’s measured at a prospect level, meaning all that matters is the total number of prospects contacted. However many emails, calls, or other touches it took to contact them isn’t reflected in the figure. The metric is expressed as a percentage — if 50 prospects were contacted and three responded positively, the positive reply rate is 6%.

SDRs should track this figure, tagging positive replies to identify trends. This metric can expose flaws and highlight benefits in aspects of your sales process like outreach cadence, prospecting approach, and channel preferences.

4. System Touches

Ideally, you’d like your sales process to be fairly “low touch,” meaning your salespeople are closing new business efficiently for your company and your consumer.

If you review a salesperson’s quarterly numbers and see that they missed their quota and had a very high number of touchpoints per closed-lost deals (say, five video meetings, 11 emails, and seven phone calls), it might be time to revisit how effective that rep’s strategy is.

Analyze your most successful reps’ average touchpoints. Do their closed-won deals average three video meetings, eight emails, and four phone calls? Ask these reps to share their strategies, techniques, and advice to streamline your team’s average, collective sales cycle.

5. Meeting Acceptance Rates

Consistently landing appointment acceptances is a mark of an exceptional sales rep. It means they can create a sense of urgency with prospects. Oftentimes, prospects try to push meetings off, don’t take them seriously, or just flat out stop responding. If an SDR lands meetings on a regular basis, it means they’re making their prospects prioritize your product or service in their schedules. 

This rate is calculated by dividing the number of meetings a rep schedules by the total number of replies they receive from prospects. It’s a valuable metric for understanding both your reps’ sales acumen and the efficacy of your sales training, specifically when it comes to objection handling.

6. SQL-to-Customer Conversion Rate

Your SDRs may not have much control over how many leads are generated, but they certainly have a hand in turning those leads into customers.

Low conversion rates across the board can indicate an issue with your lead generation and qualification process. Low conversion rates with specific reps can help you make decisions about ongoing training and development.

7. Deal Win-Loss Ratio

While SDRs may not be involved in closing the deal, the win/loss ratio can indicate the quality of the experience the prospect had along the way.

For organizations with sales and marketing departments, it can be difficult to measure sales performance. After all, how do you know the handoff is successful?

Here are KPIs that can give you a clue:

1. Percentage of Leads in Each Lifecycle Stage

If you break down leads by lifecycle stage (e.g. Lead, MQL, SQL), you may be able to see the pinch points and bottlenecks across the two departments.

Marketing is responsible for increasing the percentage of leads that make it to MQL, the handoff happens between MQL and SQL, and Sales is responsible for turning SQLs into opportunities. However, if Sales isn’t getting the right leads, sales numbers will be affected. You’d start to diagnose pipeline issues with these metrics.

2. MQL-to-Customer Conversion Rate

With that in mind, both Marketing and Sales have interest in the MQL-to-customer conversion rate.

Marketing because they supply the MQls, and Sales because they turn those MQLs into customers. Therefore, raising this number should be a shared objective.

3. Average Length of Customer Lifecycle

The customer lifecycle refers to the different stages a customer goes through on their path to purchase (and beyond). It’s in an organization’s best interest to decrease the time between first impression and first purchase — in theory, that will reduce acquisition cost and generate customers more efficiently.

Marketing and Sales both have a stake in this lifecycle and can continue to iterate improvements to shorten it.

4. Volume of New Opportunities

Opportunities turn into deals and customers. Without qualified leads, opportunities can’t happen. Without Sales, those leads don’t become opportunities.

Once you have data on your KPIs, analyze the information to understand why you got those results. Then, determine how you can improve performance and follow through with action. And remember — as important as establishing KPIs are, they must be always tied to an overarching goal.

Editor’s note: This post was originally published in June, 24 2019 and has been updated for comprehensiveness.


How to Define, Calculate, and Improve Sales Win Rate…

Of the many sales metrics that businesses track, none is scrutinized more closely than the prized win rate.

When a company has clearly defined win rate criteria, calculates its win rate frequently, and takes insight-based action to improve win rate, it is setting itself up to turn a higher percentage of prospects into customers.

Before we get to a few tips for improving win rate in your company, let’s revisit the definition of a win rate, explain how to calculate it, and remind you of a few best practices when it comes to setting goals and criteria for your win rate.

Companies use win rate to determine which time periods, sales reps, and win/loss reasons produce the strongest likelihood that a prospect will become a customer for the business.

How to Calculate Your Sales Win Rate

In the simplest terms, sales win rate is calculated by dividing closed-won deals by all deal-stage prospects that either did or did not become customers. We recommend using a Sales Win Rate Calculator to help you determine and track your win rate for accuracy and consistency.

To calculate your sales win rate manually, you can use the following equation:

For example, if in one quarter you had 25 wins out of a total of 100, that would yield a 25% win rate for that time period.

To fully understand your win rate – and ultimately make improvements to it – there are a few best practices to follow.

1. Be Consistent with Your Win/Loss Definitions

Some companies choose to include “No Decision” in their win-loss rate metric, meaning if a prospect has had a demo, seen a quote, and ultimately decides not to purchase from you or any of your competitors, that contact would be reflected in your win rate.

Other companies divide wins solely by the number of prospects that made a buying decision – meaning only prospects that decide to go (or stay) with a competitor would count as losses compared to wins.

Depending on your industry and your buyers, either one of these situations could make sense. However, the key takeaway here is to be consistent in which accounts are and are not included in your win rate calculation.

2. Use a Sales Win Rate Calculator

Download This Template

To avoid miscalculations and set up a sales win rate tracking system, use a Sales Win Rate Calculator to track which percentages of your prospects closed into deals. You can also use this calculator to break down wins and losses by reason to see which parts of your product or sales process have the biggest impact on your bottom line.

3. Determine Time Frames

To develop a universal understanding of win rate in your sales department, specify the when represented by your calculation. It’s fine to calculate and share a perpetual win rate and track it over the course of the company’s history, but you may want to get more granular than that. To that end, consider calculating win rate by month, quarter, or year – and specifying which one is the norm so your company can follow along with progress.

4. Choose Win/Loss Criteria

Your prospects could choose to (or not to) become a customer for a myriad of reasons, but the rationale can typically be bucketed into one of a few predominant reasons. Here are a few of the most commonly utilized:

  • Features: The features of your product or service did not meet the requirements of the prospect.
  • Price: Your final asking price exceeded what the prospect was willing to pay.
  • Competition: The prospect decided to either go with – or stay with – a direct competitor.
  • Need: The perceived value of your product was not apparent to your prospect, and thus they felt no need to close.
  • Timing: Your prospect is interested, but was either unable or unwilling to close at this time.

Note that these last two reasons – need and timing – can sometimes be lumped into “No Decision,” as no buying decision was made regarding you or a competitor. Perhaps a year down the line, the prospect may be in need of your product, or might be in a better place to consider what you’re selling.

Either way, ensure these and all of your loss reasons are clearly defined so that Sales Ops can understand the why behind the dreaded “Closed-Lost” notification in the CRM.

5. Categorize Deal Stages

Once a contact is classified as an SQL, make sure there are stages that reflect the buyer’s journey during these sales-focused discussions. While these stages will vary in each business, some of the most frequently utilized could include:

  • Demo or Quote Requested
  • Demo Held
  • Quote Sent
  • Revised Quote Sent
  • Stakeholder Bought In
  • Contract Sent

Breaking down your stages appropriately – and marking accounts with the proper stage in your CRM – gives your team the power to achieve more granular insights when analyzing win rate by criteria.

How to Improve Sales Win Rate

Looking to improve your sales win rate? Check out these tips from some of HubSpot’s top salespeople.

1. Analyze win-loss rate by important criteria.

As outlined above, it’s essential to have clearly defined loss reasons, deal stages, and classification of reps, because establishing these criteria means you can factor them into your win-loss rate analysis.

For example, analyzing win rate by rep can help you identify which reps need further sales training or should be placed on a performance improvement plan, and analyzing by loss reason can help your sales enablement team better prepare reps to speak on specific competitors or feature-specific questions.

To help you determine specific win and loss rates by these criteria, download HubSpot’s Sales Metrics Calculator to uncover helpful insights.

2. Define clear next steps.

HubSpot Account Executive Sarina Kowaguchi found that setting and clarifying the next steps in the sales process increases the likelihood of closing the sale.

“Our manager gave our team an exercise to complete – to look at all of the deals we had lost in the prior month, and identify why we lost the deal, and our learnings from it,” Sarina explained.

“A common theme across the team was the lack of concrete next steps, resulting in a deal to fizzle out or go ‘dark.'”

One strategy Sarina’s team implemented was setting up a 15-minute call with clients in between steps – even when all that was left in the process was singing the quote link. She says, “We would explain that the call would be cancelled if the quote was signed prior to the meeting time, but if it was not, we would meet and could use the time to answer any questions.”

As a result, Sarina says her team has been able to “more precisely forecast when quotes would be executed, drive sales processes forward on shorter timelines, and eliminate the back and forth of asking prospects ‘if they had a chance to sign the quote yet.'”

3. Involve the decision maker as soon as possible.

One way to improve win rate down the line is to simply ensure any Decision Makers are involved with the process immediately. That way, if the sale has no serious potential, the DM will block it ASAP, but if the sale is possible, DMs will be looped in from the get-go and not serve as a roadblock down the line. Sarina offers the following insight:

“We noticed that many of the deals we lost started off as great conversations with ‘surprise’ roadblocks at the very end of the sales process.

This was often due to the true decision maker being looped in too late into the sales process (typically only at the end when pricing was presented), and they weren’t bought-in to our pitch. This resulted in deals getting pushed outside of our initial estimated timeline or not moving forward altogether.

We learned to always ask, ‘what does your internal evaluation process look like?’ and ‘who else is involved in the evaluation process?’ so we aren’t caught off guard at the end of the evaluation.”

This emphasis on looping in the right people sooner paid off by sending more qualified prospects through the pipeline.

4. Set expectations and anticipate potential roadblocks at the start.

Building off the previous step, Senior Account Executive Tori Rotermund said:

“Make sure you’re both on the same page about the evaluation process, and understand how your prospects want to evaluate so you can tailor your process,” adding that reps need to “call out red flags and objections immediately and address them so there aren’t surprises or deal blockers at the end of the sales process.”

Knowing to only move forward with prospects who are legitimately interested in what you’re selling saves you and your prospects’ time, and by removing prospects who have an abundance of unavoidable roadblocks from the pipeline, you’ll see a more efficient sales cycle – and a higher win rate to go along with it.

5. Don’t make assumptions.

Ian Byrne, Enterprise Territory Manager for HubSpot, says the key point in all aspects of closing a deal is to not make assumptions.

“If you have gaps, try to identify and close them as soon as possible,” he explained.

More specifically, Ian emphasizes the need to know your audience as a sales rep, such as:

  • What drives them from a personal and professional perspective.
  • What success looks like to them.
  • What the impact would be to themselves or their business with (or without) what it is you’re selling.

6. Establish exit criteria.

HubSpot Senior Sales Manager Mintis Hankerson emphasized how her team’s focus on exit criteria has improved the quality of and openness during sales conversations, which contributed to a stronger win rate.

“For exit criteria, we focus on always understanding the pain points of the business, a clear indication on if HubSpot solves those pains, and if our software brings a return on investment to the business,” Mintis explained.

Elaborating on how this approach creates an atmosphere that doesn’t focus on a hard sell, Mintis went on to say that “if we focus on those three things, then our sales process shifts from one of sales desperation to one of mutual value,” teeing prospects up for more enthusiasm and willingness to buy.

How to Track Sales Win Rate

The only way to ensure you’re improving your win rate over time is to calculate, document, and track your win rates by rep, loss reason, and/or deal stage over time. We recommend keeping track of your win-loss rate with HubSpot’s Sales Metrics Calculator, which helps you calculate and visualize win rate and determine areas where you should focus your sales improvement efforts.

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