Key Performance Indicators, or KPIs, are normally used by most businesses to measure and track their current performance in terms of achieving their business goals and objectives. Ideally, these KPIs should depend on your business nature and current business status.
However, the more we see the current developments in progressing towards a more modernized sales world, the more we need to understand the fact that setting up both a startup team and companies would be harder than before due to tight market competition.
Normally, setting up any kind of business would involve either a five- or ten-year plan. But as much as we want to stick with those pre-planned strategies, we must also realize that unavoidable things and changes may happen along the way. The current pandemic situation could be one of the best examples of those inevitable “changes” that may hinder your company from achieving its objectives.
As a result, a startup team should be able to determine the best sales KPIs that can be applied into their business through this article.
What are the types of KPIs?
In sales, KPIs can be divided into quantity-related and quality-related categories. Basically, KPIs under the quantity-related type directly refer to the financial or numerical sales generated input of your team.
Here are the best-proven sales KPIs under the quantity-related type:
Projecting your team’s monthly or quarterly quota will always be the top priority of each company. This KPI will help you track your current sales standing in terms of your company’s target number of sales. Consequently, this KPI will also help you in making a comparative analysis between your previous and current sales performance.
While keeping track of your current sales standing, it is also important to counter-check the total cost of expenses that you invested for each product proposal or offer. This KPI will give you a chance to know whether your income is actually greater than your expenses.
This KPI is probably one of the most basic indicators for all business types. Your company’s sales growth should be consistently monitored and checked. For startup teams, this KPI is usually applied as it will give you more realistic data with regard to your service/product’s competitiveness in the market.
Also, being transparent with your sales team about the increase in sales will also keep them motivated and do better.
Sales Closing Ratio
This KPI refers to the number of quotes made by your sales team compared to the actual number of closed deals. This is usually critical as it would give your team a realization that while getting a lot of prospects’ engagement can be good, they should also see to it that closing a deal is more crucial.
Service or Product Performance
Understanding your clients’ purchasing demands is important. This KPI will help you prioritize which products/services that you offer lead to better sales revenue.
Let’s say that although you keep on hitting your monthly or quarterly targets but you are still producing a product which barely sells, then you’d still generate a loss. Keeping up with the customer’s trend will help you avoid this kind of loss.
While the quantity-related KPIs seem to encompass most of the important assessment sales trackers, it will also be better for you to know the following quality-related type KPIs if you’re planning to put up a startup team.
Quality-related KPIs refer to results of effectiveness and productivity brought by your team’s sales and marketing strategies.
Created Sales Opportunities
Initially, you might think that this KPI will fall under the quantity-related KPI, but a deeper understanding of this indicator will give you an entirely different view.
Sales opportunities are determined by the efforts of your sales team in creating direct and valuable prospects for your offered service or products. This KPI will help you project your revenue and sales target, thus making it quality-related.
Sales Per Team/Rep
This KPI is measured through the effectiveness of performance made by each sales representative or team. It is basically your sales team’s ability to close and get the deals done. Tracking this KPI will allow you, as an employer or team leader, to determine each of your staff’s strengths and weaknesses.
By knowing what they do best, you can strategically delegate them to tasks which can be advantageous for both of you.
Point of Sale Method
Identifying which sales method works best for your prospects and clients can also be critical as there are already several ways to do it.
However, keeping this KPI on track will lead you to an even better marketing strategy as you’ll get a glimpse of what the customers prefer.
Conversion of Prospects to Sales
Converting a potential client into a closed and signed deal is also a result of your team’s efficiency.
While this KPI may also overlap several of the previously mentioned KPIs, it is still important for us to differentiate sales opportunities into actual sales revenue. Increasing your team’s commitment to actually closing a deal rather than just getting leads would be as important as your sales growth.
How to keep your KPIs on track
Keeping these KPIs on track can be too much work, especially for startup teams which are normally composed of only a few sales representatives. Nowadays, most startup companies won’t risk their business by spending a huge fortune to develop their own KPI dashboard monitoring.
Instead, startup teams usually hire an outsourced sales team like Verde Strategies, which offers a comprehensive lead generation and even an after-sales plan that can best fit your emerging business.
Also, it will be best for startup teams to remember that understanding their initial capability is the key to success in all types of business.