9 Sales KPIs Every Sales Team Should Be Tracking

More sales data isn’t always better. You need a clear focus on metrics that matter. Here are 9 critical sales KPIs to drive confident decisions and grow revenue.

August 16, 2022 | Time to read: 8 minutes

Ever been overwhelmed by the sheer volume of sales data you’re tracking — and confused by the metrics that matter? You’re not the only one. Research firm McKinsey highlighted this as a troubling trend recently: Too much data and no focus has made it difficult for sales leaders to reach clear “aha” moments that drive confident decisions and sustainable growth.

Fortunately, there’s a clear path forward. To ensure you’re maximizing the ROI of tools, teams, and customer relationships, zero in on sales key performance indicators (KPIs) that make the most of what you have while delivering recurring revenue: a combination of tried-and-true targets, like lead conversion rate, and those that measure long-term value, like customer and employee retention.

Below, we give you everything you need to know about sales KPIs that ensure a healthy, productive, and growing business.

What you’ll learn:

 

What are KPIs in sales?

Key performance indicators (KPIs) in sales are the metrics used to measure how closely the performance of a sales team tracks to predetermined goals and how this performance impacts the business as a whole. This includes metrics like average leads generated per quarter and deal conversion rate.

Why are sales KPIs so important?

Instead of different reps focusing on different metrics — or leaders eyeing a definition of success that sales reps aren’t thinking about — KPIs keep everyone aligned on the metrics that contribute to company growth. It’s important to note that KPIs themselves are not sales targets, but metrics that gauge activity with significant business impact. Sales leaders define target KPIs to ensure teams are tracking to specific revenue goals.

Here’s an example: Joy’s Toys, a toy manufacturer, is focused on growth but doesn’t have a clear target KPI for lead generation that incentivizes reps to keep their pipelines full. Fast-forward a quarter or two and its revenue is “stop-and-go” with reps scrambling to find new opportunities after periods of focusing only on closing deals already in the pipeline. As a result, company growth stalls.

Competitor Saul’s Dolls, on the other hand, has mapped out a clear path to revenue growth that includes target KPIs for lead generation, quota attainment, and customer retention. These are shared with every rep so they can prioritize their time and efforts on prospecting, nurturing, and closing deals with new customers while upselling existing customers — and no critical sales effort is ignored. With this focus, Saul’s Dolls is more likely to hit or surpass its revenue goals.

What are the most important sales KPIs?

Historically, KPIs for sales have focused on core targets like new leads in the pipeline, number of closed deals per quarter, and individual quotas. These are still important, but they often hinge on unpredictable one-off sales. To ensure your company is generating long-term, predictable revenue and maximizing ROI, it’s important to track both foundational sales KPIs and those that gauge the lifetime value of customer and employee relationships.

Here’s a closer look at the most critical sales KPIs:

 
 

1. Annual contract value (ACV)

What it measures: The average sales amount of a customer contract over the course of a year.

Why it’s important: ACV helps sales reps and managers identify opportunities for upselling and cross-selling that increase customer contract value and, ultimately, company revenue. If upselling or cross-selling are not possible (due to product portfolio, pricing structures, etc.), a low ACV may indicate a need for new customers that can drive revenue growth.

How to calculate: (Total sales value of contracts in a year) / (number of contracts) = Average ACV

 
 

2. Customer lifetime value (CLV)

What it measures: The value of all purchases, including upsells, cross-sells, and renewals, that a customer makes over the course of their relationship with your company.

Why it’s important: CLV is a clear indicator of how successfully your team is building the kind of trusting, value-first, and loyal customer relationships that lead to upsells, cross-sells, and renewals, and, as a result, predictable revenue.

How to calculate: (Average purchase value per year) x (average number of purchases per year for each customer) x (average customer lifespan in years) = Customer lifetime value

 
 

3. New leads in pipeline

What it measures: The number of new leads added to each rep’s pipeline during a single quarter.

Why it’s important: Based on your conversion rates (four deals closed for every seven leads, for example), you will likely need a specific number of leads to hit sales targets. If reps’ lead count falls below your target KPI, it can be a sign that you need to spend more time on prospecting.

 
 

4. Average age of leads in pipeline

What it measures: How long leads remain in the pipeline without becoming a closed deal. Usually calculated per rep.

Why it’s important: Reps know a full pipeline is a healthy one — but only if leads are actively moving toward a sale. Stalled deals are a drain on rep time that could be spent moving more viable deals down the pipeline. If you see a trend in stale leads for a particular rep, consider examining their pipeline and remove leads unlikely to close.

How to calculate: (Total age of all active leads per reps) / (Number of active leads) = Average age of leads in pipeline

 
 
 
 
 
 

5. Conversion rate

What it measures: Also known as win rate, this is the percentage of each rep’s leads that are converted to closed deals. Usually tracked by quarter, per rep.

Why it’s important: If a single rep’s conversion rate is higher than the target conversion rate, that rep may be using sales strategies or processes that are particularly effective and can be operationalized for the entire sales team. If lower, you might need to fine-tune or streamline sales tactics to increase conversions. Call recording and analysis tools, alongside regular one-on-one coaching, can help.

How to calculate: (Number of deals closed during a quarter) / (number of leads in the pipeline) x 100 = Conversion rate

 
 

6. Rep retention

What it measures: Percentage of reps who remain in your organization a set period of time after hire. Typically measured yearly.

Why it’s important: A low rep retention rate can disrupt carefully nurtured customer relationships, which can result in lost upsells/cross-sells — or just lost customers. It can also mean more money spent onboarding reps hired to replace those who leave. When rep retention is high, customer relationships remain intact and team stability is maintained.

How to calculate: (Number of total reps at the end of the year – new reps hired during the year)/(total number of reps at the start of the year) x 100 = Rep retention

 
 

7. Average rep ramp time

What it measures: The amount of time it takes a rep to get from the first day on the job to first prospect outreach.

Why it’s important: A quicker ramp time indicates your enablement and training are effective, your tools and processes are intuitive, and you’re hiring qualified candidates. This results in faster sales and more engaged reps. If you find ramp time is slow, consider revisiting onboarding programs, changing your tools, or streamlining your processes.

How to calculate: (Total time in days it takes all new reps to get from day one to first prospect outreach) / (total number of new reps) = Average rep ramp time

 
 

8. Referrals

What it measures: The number of referrals for new customers from existing customers secured by each rep during a given quarter.

Why it’s important: When your customers are over-the-moon happy with your products or services, they can serve as advocates, promoting you to prospects who otherwise may not be familiar with your brand. This makes it easier for reps to sell, leading to faster sales cycles and more closed deals.

 
 

9. Customer retention

What it measures: The percentage of customers who continue to buy and use your products/services. The inverse metric is churn rate — the percentage of customers who decide to stop buying or using your products/services.

Why it’s important: While new customers add to revenue, they also take significant resources to secure. By watching customer retention and focusing on opportunities to upsell and cross-sell, you’re generating predictable revenue with a loyal customer base — and maximizing ROI. If you see customer retention slip, you may need to revisit rep engagement strategies to ensure your team is prioritizing existing customer relationships.

How to calculate: (Overall number of customers at the end of the year – net new customers acquired during the year) / (number of customers at the start of the year) x 100 = Customer retention

 
 
 
 

What sales KPI dashboards should you use?

A sales KPI dashboard helps leaders sift through a whirlwind of sales data to figure out what is actually impacting company growth. Not all dashboards are created equal, however. The best ones — powered by an intuitive CRM — don’t just display numbers, they provide a clear picture of sales and company health so everyone from sales reps to leaders can make decisions that keep revenue flowing. To make sure everyone is in the loop, you need dashboards that provide high-level status updates to C-suite executives and more granular, deal-based dashboards for your reps.

Here are the dashboards we recommend for tracking sales KPIs:

For chief revenue officers (CROs) and sales leaders:

  • Home “State of the Union” Dashboard: This provides an overview of top-level, year-to-date performance by target KPIs. It gives you the most important metrics for your business on one screen, including notable open and closed deals (usually the biggest accounts by value), top sales reps by quota attainment, and overall sales performance vs. forecast.

For sales managers:

  • Pipeline Dashboard: Get a snapshot of each rep’s pipeline with this dashboard, including average sales cycles, average deal amounts, and conversion rates. You’ll get clarity on the progression of deals in each pipeline and identify problem areas you need to address quickly.
  • Team Activities Dashboard: See what your team’s doing to stay on top of active deals. Look at their total, completed, and overdue tasks and review each rep’s call and email logs. This dashboard is key for monitoring rep engagement and sales process efficiency.

For sales operations (sales ops) teams:

  • Performance Dashboard: Drill into closed deals by region, account, or product so you can see what’s contributing to high deal win rates or slowing conversions. Once you know the “why,” you can recommend strategy shifts for your team.
  • Stage Analysis Dashboard: This dashboard shows how deals across all reps are moving through the stages of the sales process, revealing bottlenecks and at-risk opportunities. Trends and patterns can reveal opportunities for process improvements.

For sales reps:

  • Rep and Team Leaderboard Dashboards: This is an overview of individual rep and team performance data, including quota attainment, leads in pipe, pipe generation, closed/won deals, average sales cycle time, and sales activities. This is where reps spend most of their time, tracking deals on a daily basis.

For more guidance, check out our article on key sales KPI dashboards that can help you hit or exceed your revenue targets.

What’s next?

There’s no shortage of sales KPIs to track — but zeroing in on the right ones depends on what’s important to your business right now. First, identify overarching goals. For example, are you focused on driving growth or maximizing revenue with existing resources and investments?

Once you’re aligned on larger goals, you can select relevant sales KPIs to track and target metrics that will ensure you hit your broader business goals. Be sure to set up dashboards in a CRM accessible to all teams so you can see a clear view of progress toward the goals you’ve defined.

 

More Resources

 
Blog Post
See the seven sales dashboards every leader needs.
Webinar
Learn how Salesforce drives predictable pipeline with forecasting.
Demo
See how Sales Cloud gives you real-time visibility into your pipeline.
 
 

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