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Top KPIs And Metrics for Sales Success In 2020

written on 20-3-17-Tue 04:52
Home KPI Top KPIs And Metrics for Sales Success In 2020
Defining Sales KPIs
Percentage Sales Growth
Customer Acquisition Cost (CAC)
Customer Lifetime Value (CLV)
Churn Rate
Product Performance
What Is KPI in Sales?
What KPIs Do You Use to Rate Sales Representatives?
What are an MQL and SQL?
Individuals in this category need to have a conversation with a salesperson. If the salesperson discovers any potential, this person is moved to the SQL category.


When sales teams go out to pitch clients, they most likely have a quota that they are aiming to meet. This quota, coupled with closed sales, every conversion made, and every dollar earned, are vital pieces of information used to keep track of the success of one's sales career. This information is known as metrics, otherwise known as Key Performance Indicators. 

Every successful business needs to make sales in order to stay afloat, meaning they have to maximize sales, and this cannot be achieved without proper tracking. Any company trying to maximize sales must use some specific KPIs to serve as a compass. Sales KPIs will aid anyone on the sales teams to understand their position and the actions that are needed for success.

Whether the sales team goes under review weekly, monthly, quarterly, or annually, identifying the sales KPI will help derive valuable information that can further the sales objectives of the company. With new trends springing up every moment, there is no better time to monitor your sales KPI.

Defining Sales KPIs

A sales KPI is the exact measurement of performance employed in the tracking of the effectiveness of a business's present sales techniques as well as processes within that technique. In simpler terms, it is a measurable value, which shows how various sales processes are performing. It is also known as a sales metric. They evaluate every detail, starting from the number of qualified leads to the number of sales closed. 

These metrics are often utilized by sales managers to assess their sales teams. They come in handy mainly for field sales managers who may not be in the field to keep an eye on the activities of the teams. Company executives also use KPIs to evaluate the overall growth of the organization. If more deals are being closed and the average sales value is increasing, the profits will follow suit. Increasing profits shows the leadership that there is a need to continue scaling up.

Sales KPIs are so vital because they could precisely give an overall insight into the performance of your sales teams as well as product performance in relation to sales and company objectives. They are helpful in tracking the significance of your sales activities. When these indicators are used to measure sale performance, you will have more information needed to optimize your sales funnel coupled with sales cycle duration.

Sales metrics are displayed on a sales dashboard. This tool is not just an interface with complex charts and figures. It combines the actionable metrics and the explanatory graphs to give a quick outlook of a company's performance. To use the sales dashboard effectively, the sales manager should avoid employing the wrong indicators, which have no real impact on the company's performance. 

Depending on your goals, success, visions, and industry, you will need to pick out the essential metrics to measure your company's sales growth. In the course of this article, we will discuss the most insightful and essential sales metrics that will give you a full understanding of what is happening in your sales department. With this, you will be able to close more deals and create more revenue. Ride with us to find out more about these important sales KPIs, how to calculate them as well as the applications. This will ensure that your business witnesses a boost in sales performance in 2020. 



This is the process of moving an individual from the stage of being a prospect to the lead stage, and finally, to the customer stage. conversion refers to any action you desire a user to take. It could be to subscribe to your mailing list, make a purchase, send you a message, etc. Apps and websites have numerous conversion goals, and each one has its own conversion rate.

The conversion rate is calculated by dividing the number of conversions by the total number of visitors. For instance, your website receives about 500 visitors in a month and recorded 80 sales; the conversion rate will be 0.16 or 16%.

Why Your Conversion Rate Is Important

Tracking conversion rates give you an insight into the performance of your apps or web pages. Understanding the rate at which your visitors are undertaking tasks that upscale your business permits you to measure the success rate of the app or website and discover various areas to improve on.

Making improvements in your conversion rate allows you to drive more sales with an exact amount of traffic. Assuming you're spending $2000 per month on advertising and end up driving 1000 visitors to your website, doubling your conversion rate automatically means doubling the value of the amount you spend on the ad. This means you can reduce your ad spend while getting the same benefits you were enjoying before.


Percentage Sales Growth

Percentage Sales Growth evaluates the rise in sales between two given periods as a ratio of the older period's sales. When you assess your income statements, it is imperative to analyze the percentage sales growth between two consecutive business periods in addition to those exact periods in two financial years. If there is a sequential growth between periods, it will help you measure your quarterly and monthly progress throughout the year. Comparing the exact periods in various years will help you measure sales increase without being affected by seasonal fluctuations.

How To Calculate Percentage Sales Growth

We will be taking a step-by-step approach towards calculating the Percentage Sales Growth. Read below.

Step 1

From your income statement, find out the total sales of the most recent quarter and match it with the same quarter in the income statement of the previous year. Also, get the total sales of the quarter before the most recent quarter. For instance, let's say your business made a total sale of $50,000 and $60,000 in the first and second quarters of the year, respectively, and $25,000 in sales in the previous year's second quarter.

Step 2

Deduct the sales of the previous quarter from the sales of the most recent quarter. The result will be $10,000.

Step 3

Use the previous quarter's sales to divide your result, then multiply it by 100 to get the percentage format of the sequential sales growth. Dividing $10,000 with $50,000, the result will be 0.2. Then, multiply 0.2 by 100. So, the sequential percentage growth of that quarter is 20%. This implies that there was a 20% sales growth in the second quarter compared to the first quarter.

Step 4

Deduct the sales in the quarter of the previous year from the sales of the most recent quarter. Here, you will subtract $25,000 from $60,000. 

Step 5

Take the sales of the previous year's quarter and multiply by 100. This will get you the figure of the most recent quarter's YoY percentage sales growth. Dividing $35,000 with $25,000, the result will be 1.4. Then, multiply 1.4 by 100 to get the percentage of year-over-year sales growth. This implies that you recorded a 140% increase in the recent year's second quarter compared to the second quarter of the previous year. 

Customer Acquisition Cost (CAC)

As the name suggests, this is the money spent on convincing a potential client to purchase a product or service. The use of this metric has been growing with the increasing emergence of web-based companies and Internet advertising campaigns. All these could be tracked with this metric. Typically, a business had to make use of traditional advertising and devise methods to keep track of the customer via their decision-making process. 

Presently, a lot of Internet companies can run highly targeted campaigns and keep track of clients as they evolve from interested leads to lifetime loyal customers. In the sales environment, CAC is utilized by both investors and companies. 

What Does the CAC Metric Indicate?

As we said earlier, this metric is important to both investors and companies. This includes the early-stage investor who employs it in analyzing how scalable a new Internet-based company will be. With this, the company's profitability can be determined by taking a look at the disparity between the amount of money that can be gotten from consumers and the costs involved in extracting it.

Let's take the upstream oil market; for example, if there is oil supply in a local that requires heavy infrastructural investments, the cost involved in extracting the oil may outweigh the market price per barrel. Investors also view web-based companies from this standpoint. What concerns them is the present relationship and not the promises of upscaling the metric in the future.

How To Measure CAC

This sales KPI can be measured by dividing every cost spent on getting more customers by the number of clients gotten within the exact period that money was spent. For instance, if a company spends $500 on marketing annually and got 250 customers within that period, their Customer Acquisition Cost is $2.

There are limitations involved in using this metric; you should take cognizance of that before application. For example, a business might have invested money in SEO marketing or marketing in a new area, and outcomes aren't expected until a later period. Although these are rare instances, it may affect the calculation of CAC. 

Customer Lifetime Value (CLV)

Customer Lifetime Value is a KPI that shows the total revenue a company can generate from a single customer. It puts the customer's revenue value into consideration while comparing that figure to the business's expected customer lifespan. It is important to track this KPI because keeping paying customers with your business for an extended period automatically means you will make more profit. Customer Lifetime Value could also be referred to as customer profitability.

How to Measure CLV

This metric is measure by conjoining the profit generated and the cost expended in relating to customers. CLV indicates how much a client is worth to your business. If the company gets a lesser return than the amount to spend on turning an individual into a paying customer, it means their marketing strategy needs some changes.

Also, you can use this KPI to measure the profitability of various groups of customers. In business, it is important to decipher the buyer personas or customer groups that bring the most revenue to your organization. You can categorize by age, interests, locations, industry, etc. Then, assess the CLV of all categories to determine the segments that drive higher profit. If possible, let go of customers who are making conversion difficult, thereby reducing your net profit.

The application of CLV is not limited to measuring customer profitability. It could also be used to assess the ability of your sales managers to engage existing clients. Their capacity to constantly providing value to the clients can also be gauged by the value offered back. A high average CLV indicates your sales manager is actively involved with their customers. It depicts that you have the ability to establish a good relationship with clients and keep them loyal to your company for a long time. It is an important KPI to check while assessing a sales manager's overall performance. Always analyze the information obtained to find out why you got those results.

Churn Rate

The churn rate measures the frequency at which clients quit doing business with a company. It is also known as customer churn or rate of attrition and is typically expressed as a percentage of subscribers who terminate their subscriptions with a particular time frame. If a company wishes to expand its client base, the churn rate has to be less than the growth rate (which is the number of new customers).

Understanding Churn Rate

An increasing churn rate has an adverse effect on profits and limits growth. This KPI is mostly used by subscriber-based companies like cable service providers, telecommunications companies, etc. In most cases, a lot of these companies compete, and this makes it easy for individuals to move from one provider to another.

The churn rate isn't just about customers switching providers; it also involves the termination of service without switching. It is a valuable measure of revenue for subscriber-based companies. The measure of a good or bad churn rate varies across industries.

Churn and Growth Rates

A business can evaluate its growth rate as well as its churn rate to determine if it made a profit or loss. Churn rate keeps track of lost customers, whereas the growth rate keeps track of new customers. If the growth rate is lesser than the churn rate, the business recorded a loss in its client base. However, if the churn rate is lesser than the growth rate, then the business experienced growth.

Churn Rate in Employment

Churn rate could also be used to measure employee turnover in business. This means it offers a way to analyze a company's retention patterns and the hiring process. Generally, it is helpful if the employee's longevity in your business is low. If the analysis is carried out across all departments, it will help pinpoint the more productive ones.

Product Performance

This KPI rates product sales based on the amount of revenue it generates and gives the sales team a clear insight into the products performing well in the market. Also, you should rate the bad performers to find out which products are failing to get customers' attention.

When monitoring product performance, it is crucial to evaluate the specific factors affecting each product. For example, does a viral marketing campaign boost the sales of a particular product? Or, are you making low sales because your competitors are selling similar items at a more affordable rate?

Product performance does not always point to revenue performance. For example, affordable high-volume products could account for over 60% of shipped products and be critical to your business model; however, it may not be part of the top 5 products when it comes to revenue generation. Like other KPIs, you must apply metrics and measures that are constant with your business goals and model. These constants include;

  • Revenue: The total amount of money earned over a given period.
  • Units Sold: The total amount of units of a particular product sold.
  • Purchase Value: The total value of each product purchased.

For a business to have a positive product performance, it should record an increase in the number of units per order, product sales revenue, and the average dollar value of each product purchased.

data analysis


Modern sales teams display their KPIs on a dashboard. This brings visibility and transparency amongst team members and helps to improve sales productivity because the data goes a long way to motivate the teams. Ensure your sales teams have the right KPIs, and you'll be on your way to record massive profits.


How do you measure sales performance?

  • Total revenue
  • Revenue by product or product line
  • Market penetration
  • Percentage of revenue from new business
  • Percentage of revenue acquired from existing customers 
  • Year-over-year growth

What are good sales KPIs?

  • Sales Growth
  • Sales Target
  • Customer Acquisition Cost
  • Average Revenue per Unit
  • Customer Lifetime Value
  • Customer Churn Rate
  • Average Sales Cycle Length
  • Lead-to-Opportunity Ratio

The Top 10 Most Important Retail KPIs for Small Businesses

  • Gross Margin Indicator
  • Retail Sell-Through Rate
  • Year-Over-Year Sales
  • Sales Per Square Foot
  • Average Spend
  • Customer Conversion Rates
  • Inventory Turnover Rate
  • Product Return Rates

What Is KPI in Sales?

KPI in sales refers to performance tracking used by sales teams or company executives. It is used to track the efficiency of important sales activities in a company. These metrics help to improve the sales performance of the company.

What KPIs Do You Use to Rate Sales Representatives?

Choosing the right KPIs to track for each member of your sales team is important because you could lose some money if you focus on the wrong ones. Picking the right ones ensures you maximize the productivity of each member. You have to pick KPIs that are appropriate for your business goals and industry.

To save you the time and stress of trying to figure that out by yourself, we have outlined a few metrics to measure the productivity of your sales reps.

Individual Sales Numbers by Store

We wouldn't have a complete list without it. Having an idea of how much sales each team member is making is important as it will help you compare them to others. This helps to increase healthy competition between sales reps.

Rate of New Contacts

This metric points out the individuals who are meeting their quota and contributing to business growth. If most of your sales reps have low contact rates, it will be difficult to achieve your business goals, and that will be needing a fix if you wish to stay afloat.

Opportunity to Win Ratio

Your reps may be in contact with leads, how many of them are converting the leads to clients? If the numbers are low, then your sales reps need more knowledge or help on how to close sales. By doing an individual assessment, you will easily see the reps who are falling behind and those who are smashing their goals.

What are an MQL and SQL?

MQL stands for Marketing Qualified Lead. MQL is an individual who is more likely to become a paying client when compared to a normal person. A company connects with many people; it could be through their website, webinars, trade shows, social media handles, etc. The products and services you offer may just be the right fit for some individuals; however, it may not be suitable for another group of individuals, and they may never be in a position to purchase your products at all. The individuals mentioned in the former group who have the tendency or potential to buy from you are referred to as marketing qualified leads. 

You could use lead-scoring programs to separate the MQLs from the unqualified leads. Create certain actions or tasks and assign points to them; these actions may include:

  • Chatting with you on social media
  • Reading an email sent
  • Filling out an online form
  • Downloading an E-book

If someone amasses enough points as a result of actions taken over time, then he has qualified as an MQL. The interest he has shown means he is likely to have a relaxed conversation with a sales rep within your company.

On the other hand, SQL means Sales Qualified Lead. In this case, it involves an individual who has not only shown genuine interest in your products but has a considerable amount of interest towards making a purchase. They like your product offering and are also in need of the product, which means they are like to buy from you soon. Though defining MQLs can easily be handled by automated software that assigns scores, SQL could be a little trickier to define. This will involve a dialogue between the potential lead and a sales rep.

The sales qualified lead 

  • May ask specific questions concerning the cost of your product and how it works.
  • May be confused about how your products align with what they have been using
  • May be unsure about the suitability of your products
  • May need answers that aren't stated in the marketing materials they have come across.

Individuals in this category need to have a conversation with a salesperson. If the salesperson discovers any potential, this person is moved to the SQL category.

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