Which type of data do you usually pay close attention to as a business owner? Sales data remains to be one of the most crucial aspects that drives any business. As a business owner or sales manager, you should learn some tips on keeping track of your sales pipeline leads. However, there are different types of sales data that you can get from a typical business set up.
Sales managers have a hard trying to figure out all the sales data that comes from different fields. The good news is that they can rely on Key Performance Indicators (KPIs) to track the sales targets and results. Let us explore some of the key KPIs that you should observe:
Sales Close Ratio
Not every quote that your sales team sends out there will convert to a sale. This KPI compares the number of quotes that the team sent out and the deals that were closed. It is the KPI that will determine the amount of time that the sales team spends on pursuing an opportunity. If the sales closing ratio is high, it is clear that the sales team is spending too much time trying to close a deal. It can also be an indication that the sales team is not attracting quality leads.
Average Profit Margin
It is the profits that pay employees and keep the business afloat. A business that has diverse product packages or offerings relies on this KPI a lot. It also comes in handy if you have a business that allows the sales rep to have flexibility in pricing. Some products can have a low-profit margin, while others have high margins. Those with high-profit margins will compensate for those with low margins to ensure that the business makes economic sense.
Monthly Sales Growth
It is a measure of the increase or decrease in sales revenue every month. Monthly monitoring of sales helps sales managers identify and act on sales revenue trends. Such people will thus not rely on reflective reporting as they have real-time information. You can then set realistic and attainable goals based on the data that you gather every month.
A sound business should have a sales target that it should hit maybe weekly, monthly, quarterly, semiannually, or annually. It is this KPI that will determine if the sales teams are performing up to the expectations. The framework and targets should be sustainable as sales teams that are given unrealistic targets end up frustrated or burned out.
A business must go out there to create opportunities. Thus, you must ensure that you make calls, send messages, or even emails to your potential customers, depending on the business structure you have. As a sales manager, you thus have to pay close attention to the calls that every employee makes per day, week, or month. This KPI will determine the number of leads that you are likely to get from your efforts.
Sales Opportunities Created
Not all calls that you make will create opportunities. Some of the calls will go unanswered while some of the emails will bounce. You can track the opportunities that the sales reps are creating through this KPI. You can thus forecast future sales and know the opportunities that are worth pursuing. This KPI pursues who have responded to the call and those who fit the ideal customer profile. You can determine the type of calls that are bringing the best leads.
Lead Conversion Rate
Creating a sales opportunity does translate to a sale. This KPI provides a proven plan that you can replicate to gain future customers. This KPI can help you track back where previous customers came from. You can also use this KPI to identify some of the factors that may have made you lose some potential customers in the past. The lead conversion rate will also show the ratio between customer conversions against qualified prospects contacted.
Average Conversion Time
A shrewd business owner must consider the time it takes to convert a lead. This KPI shows the sales funnel’s productivity and thus know the efforts you need to dedicate to convert a lead into a sale. Time is always money, and it won’t make any economic sense when you wait for two months to close a deal worth $10. This KPI comes in handy when the company wants to create sales and revenue projections.
Existing Client Engagement
You may have noted the cost of acquiring a new customer is always higher than that of retaining an existing one. You must thus maintain a good rapport with the customers if you want them to remain long-term. A business should keep in touch with customers to know how they are faring and areas they may need help with. Customers should know that they have a business that they can always reach out to and get help.
Some businesses have some amazing products but always have trouble attracting customers. Checking the competitors’ pricing will help you price your products competitively and attract the right customers. Pricing your products higher than competitors may scare away potential customers. On the other hand, low pricing might create an impression that your products are of low quality.
You could be having related products on your website. How often do you get a customer who buys another product on top of what you promoted? For instance, someone may come looking for camping boots, buy it, and then add a bag on top. Your existing customers are the most qualified leads in your CRM. A business owner will be interested in when, how, and to whom the sales reps are cross-selling.
Customer Lifetime Value (CLV)
What is the maximum amount that you are likely to get from a customer account? The metric will also determine the estimated lifespan of a customer. This KPI comes in handy when you want to determine the most-valued customers and what they are likely to bring to the business. This metric will broadly depend on the value that the business creates for existing customers.