A VP of sales (The Vice President of Sales) is responsible for tracking key metrics and performance, as well as ensuring that their sales reps perform at the highest level possible.
This post will cover what it means to be a VP of sales, what sales metrics you should focus on, and what you need to know to do the job well.
VP of Sales Job Description
What Is a VP of Sales?
A VP of sales (The Vice President of Sales) is a hands-on executive with a proven track record of growing business revenue. They are tasked with leading the sales team by setting the vision for their sales strategy and managing the team to achieve it. The VP of sales also works closely with other executives and departments to make sure all aspects of the business are aligned with the sales goals.
As a VP of sales, you’ll also want to keep an eye on how well your team is doing in terms of meeting quotas, hitting targets, and keeping up with customer service requests. The goal here is to ensure that everyone knows their role and where they stand regarding their own performance and the company as a whole.
Key Responsibilities of a VP of Sales
- Managing a team of salespeople and setting performance expectations for each employee on the team.
- Developing a strategy for growing revenue at the company by identifying target markets, establishing partnerships with key players in those markets, and designing go-to-market plans to reach out to potential customers.
- Tracking and creating sales pipeline reports using sales tools such as Salesforce or HubSpot.
- Measuring progress against key performance indicators like total revenue generated per month or year-over-year growth rates in revenue generated by each sales rep on their team.
- Providing sales reps with training and coaching programs to help them upgrade their skillsets.
Metrics a VP of Sales Should Track
KPIs are metrics used to measure the success of an initiative or process. They’re often used with other analytics tools, like customer relationship management software (CRM), to help companies understand how well they’re meeting their goals.
The most important thing you need to understand about KPIs is that they should align with your business goals. For example, if your organization wants to increase revenue by 25% over the next year, then one of your KPIs should be related to revenue growth. You could measure it by tracking metrics like new leads per month or average monthly revenue growth rate.
Here are some critical metrics a VIP of Sales should track:
Revenue Growth
Revenue growth indicates how well your sales team is doing at closing deals. Growth here means more profit for your business.
Leads Acquired per Month
This metric tells you how many leads are coming in through each channel. Hence, you can adjust accordingly if one channel isn’t working out as well as expected.
Account Growth Rate
Account growth rate measures how much revenue each account is contributing over time. If this number increases steadily, it means more people are buying products from several places—and that means you’re doing something right! But if it starts to dip down or flatline, something may need fixing (and fast).
Lead Response Time
How long does it take from when a lead is submitted until it’s responded to? It’s important that leads are responded to as quickly as possible, so you don’t lose them to another company.
Average Deal Size
This metric measures the average amount each deal brings in for your company every month. If this number goes up over time, it means your business is growing—which is great!
Close Ratio
Your close ratio is simply the percentage of opportunities closed by your team divided by their total number. This metric lets you know how well your reps are closing deals, so it’s essential to ensure they’re following up with leads who aren’t ready yet or getting new ones in line for when they are.
Average Sales Cycle Length
How long does it take a prospect to first hear about your product or service until they make their purchase? Keeping this number low is key to ensuring consistent growth in revenue over time.
You should also create benchmarks for each KPI based on industry averages or historical data if possible. Once you have established these benchmarks, it’ll be easier to determine if there are any areas where your team needs improvement or where they are exceeding expectations.
KPIs for VP of Sales
When evaluating the performance of your VP of sales, it’s important to keep their objectives in mind. Here are some areas to keep an eye on:
- How many have sales cycles been initiated by this person? Are they doing an excellent job of identifying potential customers and getting them engaged?
- How many leads have been qualified by this person? Are they doing an excellent job of helping the team get closer to closing deals?
- How many opportunities in the pipeline are there at any given time? Is this number increasing over time?
- How many closed deals have happened under this person’s leadership? Do they have a good track record for driving revenue into the company coffers?
You can use the metrics above to build a set of KPIs to evaluate how well your VP of sales is doing their job.
That said, researchers from Havard Business Reviews recommend that you should also use performance KPIs to make sales leaders aware of their blind spots. “Although financial results (such as sales and profits) are a key metric for evaluating sales leader performance, leaders also need feedback about how they contribute to results. Do they have the necessary capabilities? Are they engaging in the right activities? Coaching by superiors and mentors is critical for helping leaders avoid blind spots and strengthen their leadership skills.”
Hiring Your VP of Sales Today
A VP of sales is a crucial role because they take charge of handling all aspects of sales, from hiring to training to marketing and beyond. They’re also tasked with ensuring all sales goals are met and helping you grow your business. Use the information above to hire the best VP of sales for your business.