Sales Key Performance Indicators

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Sales KPIs

Sales KPIs

‘Key performance indicators’, also known as KPI, are great measuring tools for a business and helps the employers to make necessary changes in order to achieve organizational goals.

A Sales KPI is an assessor of employee performance which is used by the sales department of a corporation and by the heads of hierarchy to monitor the efficiency level of the current agenda. Here are some of the most important sales KPI and metrics:

1. Sales Growth

This indicator measures the growth of the total sales of a company. On obvious terms, the higher the growth, the bigger the business.

It is a KPI designed to get constant updates from sales associates and their industry on which they are primarily focusing on. This KPI is a standard indicator that ensures your business is in the right place.

Some examples of this KPI can be:

  • The usage of professional sales dashboard
  • Being lenient and evaluating total sales

2. Customer Acquisition Cost

Customer Acquisition Cost (CAC) is the summation of the total cost incurred by the business to retain a consumer. Starting from marketing to delivering the product, this KPI includes it all.

This indicator is meant to measure whether the company is able to obtain the CAC from consumer loyalty within the span of a year or not. Otherwise, the business will have to depend on its existing capital for that. Some examples of this KPI can be:

  • Elongate customer royalty value
  • Decrease sales per unit cost and attain economies of scale

3. Sales Target

This KPI’s main aim is to track the strategic goals set by a corporation in order to achieve forecasted success. It answers several questions regarding the original revenue being better than the expected one or what is the groundwork done by the sales team before forecasting it.

This data will enable the sales executive head to track the results and make alterations accordingly. Here are some of the examples of this KPI:

  • The goal should be to exceed the forecasted sales target
  • In case of discrepancies, necessary actions should be taken

4. Customer Churn Rate

As a KPI, it is the most realistic one business can implement while trying to improve its sales rate. The customer churn rate is the number of consumers lost over a specific timeframe and this will give the corporation an authentic overview of the changes in market trends.

The aim is to keep the churn rate below the average line and some examples of this KPI are:

  • Making alterations depending on the market changes
  • Coming up with innovative development strategies to retain customers

5. Average Revenue Per Unit (ARPU)

The title gives away this KPI’s function. This KPI indicates the difference between the ARPU and acquisition cost of a consumer. The ARPU must exceed the acquisition cost or else the business might face a loss.

Moreover, this would indicate that the firm is not producing any profits from the revenue earned. Some examples of this KPI is:

  • The ARPU must keep on rising
  • Customers with big sales incentive must be retained

Sales KPI plays a crucial role in indicating the overall performance of a business and is a suitable tool for analyzing profitability as well.