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In 2019, remote work accounted for a small percentage of working U.S. Americans. Just a year later, a 2020 remote work survey revealed that nearly 66% of Americans work from home at least once a week.
The continual rise of remote work presents new challenges for gaining insight into sales performance – both individuals and teams. The industry, however, is no stranger to digital workflow transitions. While team-management structures may be changing, key performance indicators (KPIs) remain one of the most effective ways to monitor sales rep productivity and track sales success – even from a home office.
To ensure your sales team is on the right path, and your reps are optimizing the sales process, we’ll be diving into:
Sales KPIs measure the outcome or effectiveness of a specific selling activity against overarching goals. When it comes to KPIs, there is no one-size-fits-all solution for every company. There are hundreds of potential options depending on your business goals.
When determining which sales metrics to track, it’s essential to evaluate the top sales KPIs that most align with the outcomes you’re aiming to achieve. Focusing on the wrong metrics can misguide your sales team and set everyone up for failure.
But don’t stress — we’ve sifted through the clutter and narrowed down the Top Five Sales KPIs for judging sales success:
While individual and team quotas are intrinsically connected to the sales process, looking beyond the numbers is essential to nurturing prospects. Put yourself in their shoes. A deeper emotional connection is necessary to sway today’s tech-savvy decision-makers, after all.
To measure this emotional relationship, use conversational intelligence — arguably the most important sales KPI you should be tracking, and for a good reason.
This is invaluable empathy-metric was reviewed in Salesforce’s third-annual State of Sales report, which revealed 78% of business buyers look for salespeople who act as trusted advisors. The way a sales rep connects with a prospect is a good indicator of the outcome you’ll see down the pipeline.
To track conversational intelligence, you’ll first need visibility into every customer touchpoint. Cirrus Insight's Email Integration feature can track conversational intelligence by helping you implement and measure conversation progress over extended periods of time.
The searchable timeline format located directly in your inbox gives you a birds-eye-view into your entire sales team’s communications. Browse historical Salesforce data, and gain insight into every email chain, meeting, and call, all in one place. With streamlined visibility into customer conversations, you can evaluate the quality of communication, identify action steps, and personalize any needed follow-ups.
Gong is another great tool for recording sales conversations, then tracking effectiveness via meta data extracted from the call.
The average amount of time between the first touchpoint with a prospect to closing the of a deal is known as the sales cycle length. A short sales cycle is usually optimal. However, there is a sweet spot. You don’t want to rush a potential buyer into a sale they aren’t ready to make. Conversely, a long sales cycle can make them feel undervalued, after all.
By measuring the length of your sales cycle, you can forecast won deals based on the number of qualified leads in your sales pipeline during a specific time.
To get your average sales cycle length within your specified time frame, use the following equation:
Sales Cycle Length = Length of all Deals by the Day / Total Number of Deals
Marketing and sales should be working in tandem to qualify new leads and transform them into paying customers. Implementing a sales conversion rate is an efficient way to integrate both departments and increase sales success.
In short, this sales KPI analyzes your sales team’s ability to convert leads into customers.
There are two equations most commonly used to calculate Sales Conversion Rate:
1. Conversion Rate = (Total Number of Sales / Number of Qualified Leads) X 1002. Conversion Rate = (Total Number of Sales / Unique Clicks) X 100
In sales, the customer retention rate refers to the number of recurring customers over a specific amount of time. As customer acquisition cost continues to rise, retention rate is a vital statistic for any profitable business.
By now, it’s no secret retaining customers is more cost-effective than continually seeking out new leads. According to research cited by Harvard Business Review, a 5% increase in customer retention rates increases profits by 25-90%.
To determine your customer retention rate, you’ll need to know:
Once you’ve compiled that information, your formula will look like the following:
Customer Retention Rate = [(E-N) / S] X 100
Customer lifetime value (CLV) is an educated prediction of the total sales revenue expected from a single customer throughout the transactional relationship. Unlike sales quotas, CLV encourages sales reps to develop mutual connections with their prospects.
The CLV metric is vital for understanding the type of buyer personas that are the most profitable and to tailor your sales strategies to target similar customers.
To configure the CLV metric, start by multiplying the average customer retention rate by the average number of purchases. Once you have the total, multiply that number by the average deal total.
CLV = (average customer retention rate) X (average number of purchases) X (average deal total)
Work-styles may be changing, but there are still ways to keep track of your sales team’s productivity and success by tracking KPIs for sales. Above all else, thoroughly evaluating sales metrics against the set goals for your team ensures proper tracking, improved workflows, and ramped up sales productivity.
Using top sales KPIs like the five above will help provide a personalized experience for today's digitally savvy buyers