If you have a sales team, it’s important to know how they’re performing against the goals of your business. Measuring and tracking results is the key to success, and that’s where Key Performance Indicators (KPIs) come in. Here’s how to set sales KPIs.
Put simply, KPIs are specific measurements used to show the performance of a department, employees, or a business a whole. KPIs are set against a company’s overall goals, and once set, they inform what your team will focus on, so it’s important to get it right from the outset.
Setting relevant KPIs for your business means your sales process will be slicker, and ensures your team is putting their effort in the right places.
There’s an infinite number of sales KPIs that you can measure, but here are the most common ones that businesses choose to set.
Businesses that respond to initial content within an hour of the first are seven times more likely to qualify that lead than those who wait longer to reach out. So it makes sense that many businesses choose lead response times as a KPI for their sales teams.
Response times can be the difference between converting a customer and losing a lead, so measuring an average response time, as well as the average number of follow-up attempts, will shine a light on the most effective sales activities.
Your sales cycle length is the average time it takes between the first touchpoint with a prospective customer to closing the deal. This KPI measures the efficiency of your sales process and helps you plan your activities according to the cycle length.
Read our 5 top tips for speeding up your sales cycle.
When you’re thinking about how to set sales KPIs, understanding conversion rates is one of the most important things to consider. By breaking down conversion rates into different stages in the sales funnel, you can check the health of your process and identify areas to improve.
Web visitor to lead rate: The ratio between website visitors and how many become leads, i.e. those who’ve filled out a contact form, signed up to your newsletter, or downloaded a piece of content. This KPI will help you assess how well-optimised your website is as a sales and marketing tool.
Lead to MQL rate: The percentage of leads who meet the ‘marketing qualified’ criteria, i.e. those who have shown interest in your brand, and who qualify for nurturing. This KPI helps you assess if your marketing activities are attracting the right audience.
MQL to SQL rate: The percentage of leads who are most likely to convert into customers. This KPI helps you assess how well-aligned your sales and marketing teams are.
Lead to customer rate: The percentage of leads who ultimately become customers. This is the big, overall indicator of how well your sales activities are working. If your rate is low, it’s a sign to review your processes.
Read our top tips for boosting your lead conversion rate.
Measuring your average cost per lead shows how efficient your sales and marketing activities are. The aim is to generate high-quality leads while keeping your cost per lead as low as possible. You should assess any channels which continually return a higher cost per lead.
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