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6 KPIs to help salespeople excelThe following 6 KPIs for sales staff help managers identify and track the prioritization of the most critical data to the business. KPIs help managers track only the most necessary metrics for the company.&nbsp;<h2 style="text-align:justify;">KPI 1: Gross/net profit margin</h2>Gross/net profit margin is an important KPI for the sales team. Because a business's overall business growth depends on the amount of money left over after expenses are paid. What profit margin should the company aim for? According to financial services firm Brex, 5% is generally considered a low margin, with 10% good and 20% high. The target profit margin of a business depends largely on the type and industry of the business. Example: You might run a small-scale, highly profitable business that provides quality service to high-end clients. Or, you could run a low-margin, bulk retailer.&nbsp;<blockquote>Gross profit = Net cost of goods sold and services (COGS).&nbsp;</blockquote>However, gross margin is not as simple as the formula.Not all debits count as expenses. Just as not all credits count as income. This critical distinction is made by excluding certain items from the calculation. Next, use gross profit data to determine net profit, i.e. income after paying certain "operating expenses":&nbsp;<blockquote>Net profit = Gross profit – (Total operating expenses + Tax + Interest + Depreciation + Allocation)&nbsp;</blockquote>Before considering factors such as loan payments and interest rates, your company may be profitable. Also, consider the depreciation tax deduction to determine whether that quarter is a loss or a profit. In addition, administrators should view the number of days of outstanding sales when tracking key sales KPIs. In particular, the time required for customer payments directly affects profitability.<figure class="image"><img src="https://api.estuary.solutions/estuary-web-mediafile/file/245d9904-d0d0-405a-9fe6-320e692f7375" alt="Profit is a measure of the company's business growth. "><figcaption>Profit is a measure of the company's business growth.&nbsp;</figcaption></figure>KPI 2: Sales revenue&nbsp;In the KPI table for sales staff, the sales revenue index is indispensable. Revenue may not accurately indicate the overall situation of the business, but it can help managers make a detailed analysis. When managing a sales team, managers need to understand the impact of different marketing activities on revenue.&nbsp;<ul><li style="text-align:justify;">How to increase revenue by 5%?&nbsp;</li><li style="text-align:justify;">How much does the business need to pay for sales and marketing?&nbsp;</li><li style="text-align:justify;">What is the balance between too much and too little advertising?&nbsp;</li></ul>The primary sales revenue formula: Revenue = Selling price per unit x number of units sold. The secret is to chain these formulas together without missing a procedure that the administrator needs to calculate the sales revenue for each price separately. Indeed the business will profit from different sales platforms and retail stores.&nbsp;<h2 style="text-align:justify;">KPI 3: Activity to find potential customers</h2>Motivate the sales team to measure the time, effort, and resources they invest in acquiring new leads and tracking customer phone calls and emails, prospect meetings, product and service demonstrations and any other activity. Sales managers need to build and follow many elements of lead generation activities to use them as KPIs for sales staff. Therefore, the sales team needs to report this information regularly to the manager. Through reports of outliers, sudden or significant changes in statistics help signal growth and decline. Measuring the cost of acquiring new customers is an important KPI for the sales team.<figure class="image"><img src="https://api.estuary.solutions/estuary-web-mediafile/file/82e89d45-82c8-401b-8619-cecc7d17c431" alt="Estimating the cost of acquiring new customers is an important KPI for the sales team."><figcaption>Estimating the cost of acquiring new customers is an important KPI for the sales team.</figcaption></figure><h2 style="text-align:justify;">KPI 4: The customer retention index&nbsp;</h2>The customer retention index is also a KPI for sales staff set by many sales leaders. Team leaders can measure the change in the number of customers over a certain period. Subtract the number of "lost customers" (CL – Customer Lost) from the number of "customers gained" (CG – Customer Gained):&nbsp;<blockquote>CG – CL = C&nbsp;</blockquote>Note that this formula may return a negative value. Example: If a business loses 20 customers and gains ten more, the number of customers (ΔC) will change by -10:&nbsp;<blockquote>CG [10] – CL [20] = C [-10].&nbsp;</blockquote>Managers can combine this data with the lead data in the previous section to calculate customer churn. This is one of the most important sales KPIs for evaluating sales performance.&nbsp;<h2>KPI 5: Churn ratio</h2>With this KPI for sales staff, managers can answer the critical question: "Are we attracting more customers than we lose?"It is easier to retain old customers than to attract new ones, as we all know. This KPI will determine whether your sales and customer service teams prioritize customer retention or first-time sales.To calculate customer churn, use the metrics from the previous step. When dealing with numbers, in steps 5 and 6, make sure they all represent the same time.Divide the number of customers (∆C) you lost/gained over some time (∆T - Time) by the total number of customers you served during that period (C - Customer):<blockquote>Customer's Churn = C / T x C</blockquote><figure class="image"><img src="https://api.estuary.solutions/estuary-web-mediafile/file/ce0276ff-c6ed-4bb7-987e-3ea3a4fe5f5e" alt="Don't forget to measure the rate of customers leaving your business!"><figcaption>Don't forget to measure the rate of customers leaving your business!</figcaption></figure><h2>KPI 6: Annual growth in sales</h2>Managers can calculate year-to-date sales (YTD) growth using the following standard formula:<blockquote>( Vc – Vs ) / Vs x 100 = ∆V%</blockquote>Vc (Volume current): current sales volumeVs (Volume start): initial sales volume∆V%: sales growth indexMost of these formulas only convert decimals to percentages. You only need two data points to calculate your company's annual sales growth.For example, the current sales volume (Vc) is 25,000 customers. At the beginning of the year, there were 20,000 customers (Vs). Using these two numbers, an annual sales growth of 25% can be calculated:<blockquote>( Vc [25,000] – Vs [20,000] ) / Vs [20,000] x 100 = ∆V [25%]</blockquote>Managers can use this formula to determine the percentage change over time and for all types of volumes. For example, it can calculate current sales volume (and a host of other possibilities).Above are some KPIs for sales staff and sales formulas that managers or sales leaders need to pay attention to. Sticking to the sales KPIs of the sales team will help administrators save time, human resources and budget. That will be one of the methods to help managers be aware of what's going on without studying too much into the financial statements.In addition, businesses can also use the Customer Care System on mobile applications (IWS). In addition to storing and tracking customer information, this platform also integrates sales management and KPIs for each employee, helping administrators make timely decisions.&nbsp;<a target="_blank" rel="noopener noreferrer" href="https://estuary.solutions/contact?msg=Request+Demo+Internal+Working+System&amp;service_id=3">REQUEST SOFTWARE DEMO FROM ESTUARY</a>&nbsp;

Increase sales efficiency by building smart KPIs

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Setting KPIs for salespeople is a valuable method of measuring the sales team's success. KPIs (Key Performance Indicators) help managers capture the sales team's performance accurately, thereby knowing how the implementation is going.

Increase sales efficiency by building smart KPIs

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