How To Define Your KPIs For The New Year

How To Define Your KPIs For The New Year

Traditionally, sales totals have defined the success of companies, while building relationships to expand your brand base and your company’s footprint has been the primary KPIs (Key Performance Indicators). While one-on-one customer relationships empowered traditional sales in the physical marketplace, today, sales teams focus on customer experience, with the intent of instilling a sense of trust that relies 100% on impeccable customer support, and the underlying principle that, when consumers are ready, they will be there for them.

KPIs For Sales in Software Application Services Have Always Differed From The Traditional Sales Matrix

In the software as a service (SaaS) sector, turning qualified business leads into monthly customers that stick with your software platforms and upgrade their services indicates success in sales, rather than just the number of customers your sales teams convert each month. Get organized in the new year; select the key performance indicators that will help your sales and marketing initiatives turn into solid numbers.  You may need to reevaluate your KPIs for your online sales efforts in today’s marketplace.

Since e-commerce is changing the sales landscape, some universal key performance indicators (KPIs) will always find their place in the sales matrix but by and large, as industries change, modern businesses will adapt to those changes with new KPIs. Let’s look at some crucial sales KPIs to consider when you’re planning your strategy for the new year.

How Do You Define Your KPIs?

The essential elements that must come together when defining sales KPIs involves establishing an objective that everyone agrees upon and that everyone involved is defining KPIs in the same way. This conversation, while basic, can prove to be one of the most important conversations in mapping out how to increase sales and expand your business to the next level. Also, choosing fixed, forecastable, reliable KPIs can help keep your sales team motivated.

Set Your Business Objectives


  • Create a core team that will be responsible for defining company-wide objectives. Keep this group as concise as possible to ensure everyone remains engaged and aligned with the objectives.


  • Your core team interviews department heads, asking your leaders where they see the company in five years and what quarterly steps they think should be implemented to reach their goals.


  • Each core member answers these questions and proceeds with conducting a collective SWOT analysis, measuring strengths, weaknesses, opportunities, and threats.


  • Assemble information from interviews and SWOT analysis, collectively; then the core team sets organizational SMART objectives: Specific, Measurable, Attainable, Relevant, Time-bound.

After the core team has decided on the organizational objectives for a new company or new year, take the time to make sure everyone is on the same page about these objectives and open a discussion about the common mistakes companies make when trying to establish and implement sales KPIs. These mistakes occur when KPIs are specific to your business’s goals, companies base KPIs on instincts, rather than facts and when companies adopt community-held ideas, rather than inventing their own standards. Getting to those KPIs:

·        Monthly Sales Growth

Measuring sales increases and decreases on a monthly basis helps sales professionals see and react to sales revenue trends, rather than analyzing sales reflection reports. Individuals and teams stay motivated by realistic sales revenue goals.


·        Sales Per Sales Rep

Sales team leaders can view sales made by each rep, helpful in setting personal goals and establishing a sales baseline. While this KPI can be useful in assessing each reps’ strengths and weaknesses, it should not be used to cultivate a cutthroat competitive culture that pits reps against each other. Some reps may take longer to close a sale, but those customers may stay with your company longer.


·        Sales Opportunities

Sales teams can view all leads and opportunities and determine which scenarios are most worth pursuing, organized in terms of opportunity value and the likelihood of closing the deal. Listed with estimated purchase values, this KPI helps teams prioritize their sales efforts.


·        Sales Closing Ratio

Determining the ratio between how many quotes your sales team generated and how many resulted in closings helps your company to see how much time a sales rep or the entire sales team puts in pursuing a sales opportunity. Improving your closing ratio can take the form of more quality leads and/or the sales team spending less time closing deals.


·        Sales Target

Comparing sales totals over a defined period of time and setting sales goals can motivate teams to step up their sales numbers. Keeping within a realistic timeframe and avoiding the pressure to meet unattainable goals can prevent burnout.

·        Average Profit Margins

Especially important in companies with broad and diverse product offerings or packages of offerings, to allow pricing flexibility in securing customers.


·        Monthly Sales Bookings

Measures closed deals and signed or committed sales. This KPI drives SaaS sales and can be split into a number of sub-categories, such as regional sales or sales per employee.


·        Sales By Contact

This KPI measures which contact method results in more sales. It allows teams to restructure their contact methods, capitalizing on those that work and possibly phasing out or automating those that don’t.


·        Lead-To-Sales Percentage

Determining the ratio between the number of leads and closed deals helps sales teams decide which leads are quality leads, which methods perform well in closing future deals and which offerings or messages created an impact. This KPI should be shared and regularly discussed by marketing and sales teams, towards improving leads, as fewer high-quality leads work better than a higher number of low-quality leads.

·        Monthly Calls Or Email Messages Per Sales Rep

Allows outbound teams to look at the number of calls/emails made by each rep to potential customers and can also be broken down to show calls answered and emails opened, time spent on each call, the general interest level as well as determining the number of potential prospects per number of calls/emails.

·        Average Cost Per Lead

How much does it cost for your company to generate a single lead? A Facebook campaign that generates leads at $20 each, can be the way to go if your product sells for $500 per month and your sales team is closing a significant amount of these deals. The most thorough and accurate average cost per lead KPI considers all marketing expenses, including employee salaries.

·        Retention And Churn Rates

A true sign of the change in today’s sales teams. For companies focused on inbound marketing, such as blogs, sales teams are responsible for not only closing deals but also helping ensure the customer they closed remains happy and doesn’t “churn out.” For more on calculating Customer Churn Rates.

·        Average Purchase Value

Helping to place a quantifiable value on each potential sale, this KPI measures the average value of each sale. Used along with pricing models and other metrics, the average purchase value of each lead estimates its true dollar value.

·        Product Performance

Assists sales teams in recognizing trends when products or services are outselling other products. It’s important to determine what factors are contributing to exceptional sales. Did the product get some major press or did a competitor raise their price point on a similar item?

Check out some other KPIs, such as Customer Lifetime ValueNew and Expansion MRR, and Number of Monthly Onboarding and Demo Calls that may be right for your company.

In gearing up for the new year, outsourcing your fulfillment and inventory management operations will allow you to focus on optimizing your sales and marketing efforts and find the time to implement some of these sales KPIs into your sales strategy. Partnering with Phase V Fulfillment can help grow your business and get your year off to a great start!

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