Determining the right KIPs is one of the most critical steps for sales operations success. Without them, it’s hard to know if your sales operations team is progressing toward goals or if there is any part in their workflow you can improve to boost their performance further.
In this article, let’s look at key sales operations KPIs you should be paying attention to in your sales operations strategies.
What Are Sales Operations KPIs?
Sales operations key performance indicators, or KPIs (sometimes called sales operations metrics), are performance measurements used to track and assess the effectiveness and efficiency of your sales operations activities.
Every organization may have different sales operations KPIs, depending on their industry, business objectives, sales team’s structure, and other factors.
Importance of Tracking Sales Operations Metrics
Sales operations KPIs give you valuable insights into your sales performance. For example, they tell you if your sales team achieves a target within a particular time, how many opportunities they’ve had, how many resources they’ve used to acquire a lead and turn them into a buying customer, and more.
Sales operations KPIs also help you understand how your sales operations team is performing, how their insights help your sales reps sell better, and where you can help them to increase their productivity.
Sales Operations KPIs to Track
1. Average Sales Cycle Length
What it is: How long does it take on average for a deal to close.
How to calculate it: Total number of days to close all deals divided by the total number of closed deals.
Why it matters: Average sales cycle length tells you if you should improve your sales processes or coach your reps to reduce the cycle length. This metric is also useful when setting sales targets and forecasting revenue.
2. Win/Loss Ratio
What it is: The percentage of deals you’ve won and lost in a specific period.
How to calculate it: The total number of won opportunities divided by the total number of lost opportunities.
Why it matters: It helps you understand why you win/lose, predict the success rate and create a more accurate sales forecast for the future.
3. Close Rate
What it is: The percentage of prospects that turn into actual customers.
How to calculate it: The number of closed deals (wins) divided by the total number of lead opportunities.
Why it matters: The average close rate for sale indicates your sales team’s performance. How well are they doing when it comes to qualifying leads, creating proposals, negotiating, and closing deals.
4. Cost Per Lead
What it is: The amount of money needed to acquire a new lead.
How to calculate it: The amount of money spent on lead acquisition during a period divided by the total number of leads you gained in the same period.
Why it matters: It helps your sales team know how much money they need to spend to acquire a prospect. Ideally, you should keep the cost per lead as low as possible.
5. Average Lead Response Time
What it is: The time it takes on average for your sales rep to follow up with a lead after the lead engages with your business through downloading your ebook, submitting a form, etc.
How to calculate it: First, find the response time of every new contact by taking time/date of the contact minus time/date of follow-up. Then, you can find the average lead response time by dividing the sum of time to respond for all contacts by the total number of contacts.
Why it matters: It tells you if you should speed up the process of following up a lead after they first contact you and create a better experience for your potential customer. If you take too long to respond, your prospect may switch to your competitor. Meanwhile, if you act fast, you create a great first impression and increase customer satisfaction.
6. Customer Acquisition Cost
What it is: The amount of money needed to acquire a new customer.
How to calculate it: The total amount of money spent on customer acquisition divided by the total number of new customers gained during a specific period.
Why it matters: Knowing customer acquisition cost ensures that your money is well spent and you’re getting a good return on investment. It also helps you create a better strategy for acquiring new customers while not having to spend too much.
7. Customer Churn Rate
What it is: The percentage of customers stopping using your product or service within a given timeframe.
How to calculate it: Total customers churned (total customers beginning of a timeframe minus total customers end of the timeframe) divided by total customers beginning of the timeframe.
Why it matters: Customer churn rate reveals if your retention strategies are working. It also tells how satisfied your current customers are with your product or service.
8. Average Sales Time
What is it: Time sales reps spend on selling activities — one of the key metrics of a sales reps activities tracking system.
Why it matters: Average sales time indicates your sales reps’ productivity — the less time it takes for them to convert a lead, the higher their productivity. This metric also shows if your rep is spending a lot of their time on non-revenue generating tasks and what you can do to help them solve this problem.
9. Sales Efficiency
What it is: How much revenue you’ve made for every $1 you’ve spent on sales and marketing within a given period.
How to calculate it: Total revenue divided by the total cost of sales and marketing activities.
Why it matters: Sales efficiency shows the effectiveness of your sales and marketing efforts.
Track Your Sales Operations KPIs With Revenue Grid
Revenue Grid provides you with a detailed picture of your sales performance. It helps you measure critical sales operations metrics and presents them in an easy-to-understand way. All the data is up-to-date and actionable.
For example, with Revenue Grid’s Team Analytics tool, you can quickly understand the status of deals in each rep’s pipeline, how much time they spend on selling, and what else they need to move a lead further down the sales funnel — all in one place.