If you work in sales, either as a leader or as a salesperson, you've probably heard of KPIs, an English acronym that stands for Key Performance Indicators. Sales indicators are essential to monitor your company's business and results..
If you've never used these indicators, it's important to know that this is a great way to better understand your company's sales and know if your processes are working or not. Thus, you can take action to improve your results.
In this article, we will explain what these sales indicators are and what are the main KPIs you must monitor and analyze.
What are KPIs?
KPI is an acronym that means Key Performance Indicator or, in its translation, key performance indicator. KPIs are tools that serve to measure the results of a team, whether individual or collective and according to a pre-set goal.
When we talk about sales indicators, we refer to metrics that show how the sales team performance according to the defined objectives.
Monitoring these indicators is essential to understand how company sales are doing and to keep track of the team's efforts. After all, it's important to know what's being done and how it's being executed. More than that: how much is it helping sales?
Therefore, these metrics make it easier for managers to understand whether strategies are working and what can be maintained, improved, replaced and even eliminated.
In addition, KPIs help guiding the sales team to find out if they are on the right path towards the pre-established goals and whether it will be necessary to make adjustments to this path in order to maximize results.
What are the main sales indicators?
There are several sales indicators that you can use to track your team's performance. We have listed 4 of them to get you started on your analysis. Check it out:
1 - Total leads generated in the month
Anyone who works in marketing and sales knows this, but we'll explain it: a lead is the contact of a possible customer who left their data and their personal or professional information (email, name or phone number) in exchange for something. It can be an ebook developed by the company,a discount coupon or even information about a product.
Based on this contact, the company starts a relationship with the with the objective of making a sale. And analyzing the total number of leads arriving per month is important in order to find out how many opportunities have been created.
Lead management is essential for a company to grow and generate better results. To this end, the best guideline is to analyze the stage in which these contacts are according to the sales funnel: top (first contact), middle (already knows a little about the company) or bottom of the funnel (ready to receive a sale approach).
2 - Conversion rate
Here you will analyze how many of those generated leads turned into sales.Consider, for example, that your team received 30 opportunities, 10 of which were converted into sales, 10 are under negotiation and 10 have been lost.
This is the rate you need to be aware of in order to know how each salesperson's work is developing and how effective they are in the sales process. Perhaps these numbers can be improved with new strategies, possibly redeeming lost opportunities.
3 - Average ticket
The average ticket represents the average value of sales in a given period. This is one of the main sales indicators, as it points out the sales team's ability to close deals for the company.
The average ticket can be calculated by identifying how many sales were made and their total revenue in a given period. A very simple example to help you: imagine that your team made five new sales in April:
- Two sales of R$ 500.00;
- Two sales of R$ 750.00, the highest contract value at the moment;
- One sale of R$ 350.00, the lowest value the company practices.
In order to find out what the average ticket for the month is, you must add these values up and divide the sum by the number of sales. In other words, with a total of R$ 2850.00 in sales, the average ticket for the month was R$ 570.00.
4 - Total proposals sent
This KPI enables you to analyze the number of people who have requested a commercial proposal. It is important to analyze this indicator in order to find out how much your product is attracting customers' attention.
In addition, it informs you on the productivity of your salesforce, whether they are sending the proposals within the established deadline and if the approach is being well implemented.
These are just four sales indicators, but there are many more. What's important here is monitoring those that best suit your business and pragmatically analyzing them in order to be able to define strategies towards better results.
Did you like this? There's much more on the Play2sell blog!