What Sales KPIs Should You Focus On?

by | Nov 16, 2023 | Blog, GTM Playbook

Focusing on the right KPIs helps frontline sales teams make strategic decisions to consistently hit sales targets.

For sales teams, Q4 is the moment when months of planning, execution, and hard work culminate in a high-energy effort to hit closure goals. While Q4 is an exciting time in sales, it also requires managers to balance competing priorities and execute real-time planning to meet shared goals. 

Sales leaders looking to make effective, data-driven decisions at this time benefit from identifying KPIs, or key performance indicators. Sales KPIs measure progress toward specific goals that drive sustainable revenue growth. In essence, they align CRM metrics with company-wide strategic priorities. By prioritizing the right KPIs in Q4 and beyond, sales teams can boost performance and set themselves up for success in the year to come.   

While there are lots of meaningful sales KPIs for frontline managers and sales teams to track, these are seven high-impact indicators that teams can use to gauge performance and guide sales growth. We’ve also included methods for measuring and implementing them. 

Product Demos per Week

  1. You’re prioritizing regular product demos.

Sales reps know that pipeline health depends on consistent top-of-funnel activity. A regular cadence of demos — each with defined next steps — helps build brand awareness and encourage conversion. 

Having a proven, customizable sales follow-up process that adds value at every touchpoint is crucial to staying on prospects’ radar and leading them through sales funnel stages. For enterprise sales in particular, reps should be engaging current customers and prospects with pilots and proof of concepts, and sales managers should establish ideal conversion rates on those demos.

Product demos are also a valuable opportunity for sales reps to learn about prospects’ needs, pain points, and business goals. These conversations help build trust and credibility, and can generate powerful insights that benefit sales, marketing, and product development teams.

In practice, you can measure product demo effectiveness by using several metrics: the frequency score, which measures the number of demos conducted weekly against the target number; the conversion rate, which calculates the percentage of demos leading to a next step or sales progression; and overall effectiveness, which combines these metrics for a comprehensive effectiveness score.

Deal Velocity

  1. You’re getting prospects to a decision efficiently. 

Every customer you talk with ultimately gets to make a decision about whether your product is a good fit. While close ratio (the ratio of closed won customers to all opportunities) is an important KPI for revenue growth, sales efficiency depends on strong sales velocity. Your goal is to help prospects get to a conclusion as seamlessly, confidently, and quickly as possible.

There are specific strategies sales teams can use to improve deal velocity. During discovery, sales reps should align themselves with prospects’ company-wide initiatives. If the prospect has an initiative that your product can speak to directly, you are more likely to reach the right stakeholders and get a faster decision.

Sales reps can also develop a comprehensive understanding of a prospect’s pain points and communicate what those pain points cost that company. This creates a sense of urgency around the decision-making and implementation.

Shortening the sales cycle length is a win-win — it allows you to help customers meet their needs more efficiently and avoids ongoing-but-stagnant conversations with prospects who aren’t ready to close.

To measure deal velocity effectively, a combination of key metrics can be implemented. First, track the average sales cycle length to gauge the time taken from initial contact to deal closure. Next, assess the closed won ratio, which is the proportion of successful deals compared to all closed opportunities. Additionally, monitor the time taken for prospects to reach a decision after the final meeting. Also, observe the rate at which deals progress through sales funnel stages, indicating how swiftly prospects move towards a decision. Finally, an overall deal velocity score, derived from a weighted average of these metrics, can provide a comprehensive view of the sales cycle’s speed and efficiency, highlighting areas for improvement in streamlining the sales process.

Talk Time

  1. Sales reps are spending at least 40% of their time talking to customers each week.

Customer interactions are at the heart of sales, and sales teams’ calendars should reflect that. Mid-market sales reps should aim to spend at least 40% of their time interacting with customers on a week-to-week basis. This represents 15+ hours each week where reps are focused on demos and outreach. These ongoing conversations help your team understand customer needs — and help customers understand how your product could support their business strategies.

How much time reps are spending with customers is important, but so is balancing that time proportionately between working with existing customers and looking for new leads. Some sales reps use a 30:30:30 rule, where they focus thirty percent of their efforts on net-new customers, thirty percent on growing their relationship with current customers (by sharing new products or increasing pricing, for instance), and thirty percent on customers who are up for renewal.

For effective measurement of sales reps’ engagement with customers, focus on tracking customer interactions like demos, emails and phone calls. Also, decide on specific CRM activities to monitor within your team.

Kaizen: Continuous Improvement

  1. Your team’s sales metrics are improving each quarter.

Frontline sales managers should aim to understand and improve their team’s baseline metrics. This includes knowing the average time a deal moves through each sales funnel stage and trying to constantly beat that average — at the individual, team, and company level. Having these metrics onhand allows managers to set clear priorities and attainable goals for their team and to demonstrate their team’s contributions to overall revenue planning. 

Managers can help reps balance their efforts on closing deals and with future-focused pipeline building. QBRs, or quarterly business reviews, are an opportunity for sales managers to review sales analytics, review pipeline health, and align on performance goals with their team members for upcoming quarters.

To adopt the kaizen principle in sales, develop a sales metric KPI for continuous quarterly improvement. Set clear targets for reducing the average time deals spend in each funnel stage at the individual, team and company level. Use data from QBRs to evaluate progress. 

Management Efficiency

  1. Your sales management drives efficiency.

Sales managers support frontline reps by making sure that their team keeps its focus on the customer experience.

Prioritizing sales productivity means taking administrative tasks off your team’s plate, and shielding individual reps from unnecessary tasks and internal demands. Let your team know when to escalate blockers, requests, and other time-drains to management. Doing so shows that you have skin in the game and are committed to helping everyone meet their quotas and goals.

To measure sales management efficiency, gauge sales reps’ satisfaction with their manager through a biannual survey, concentrating on how effectively managers assist in removing obstacles and managing administrative tasks.

Forecast Accuracy

  1. Your frontline managers are leveraging effective sales forecasting.

If you’re a frontline manager, forecasting is central to your sales performance evaluation and planning. Creating consistent and accurate sales forecasts allows you to make data-driven decisions and coach your team to more wins. 

Wrangling data beyond the CRM sometimes requires lots of spreadsheets and conversations to capture historical metrics and give them relevant context. But when push comes to shove, compiling this data creates visibility around sales performance across departments and builds trust and accountability among teams.

A simple way to calculate forecast accuracy is to divide the actual sales by the forecasted sales and then multiplying by 100 to get a percentage.

Team Health

  1. As a frontline manager, you’re prioritizing culture and growth on your team.

One important KPI for sales performance management, especially in remote work culture, is what leaders do to build trust and foster a sense of belonging on their teams. 

Effective sales managers leverage data to identify KPIs for performance review and foster a sense of “data citizenship” where maintaining accurate data is a shared mission. They build teams where multiple people are top performers, and leverage the competitive synergy of the whole team so that goals are met (and celebrated) together.

To gain insights about team culture and well-being, organizations could lean into HR-led survey initiatives or encourage managers to track their perception of employee happiness and stress over time. These metrics can help managers implement change to support their team and create a culture of accountability, support, and growth.

Photo by John Schnobrich on Unsplash

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