21 Most Important Sales KPIs & Metrics

Description:Total value of all goods or services sold. You should not include any returns or allowances. It is main share of the revenue.

Calculation Method / Formula:Sales price * number of units sold

Should be High or Low?:If the value drops you may have look closer on your investments, marketing and budget planning.

Description:Sales Units – total number of sold units in a period of time.

Calculation Method / Formula:Total number of sold units

Description:It measures effectiveness of your sales team. If and how much they can influence the growth of income through some period of time. To measure it you need to compare your sales value between some given periods of time.

Calculation Method / Formula:(sales revenue from current month – sales revenue from previous month) / sales revenue from previous month

Should be High or Low?:If your company is growing the number will most likely be fairly higher. Later on, the target will depend if your company is releasing new products or how is your brand value placed on the market among the other companies.

Description:You can measure total number of your customers and how it is changing through the time.

Should be High or Low?:The number should grow within a time, but how fast it grows all depends on effectiveness of marketing strategies and the market demand.

Description:The most used way to monitor sales cycle is to start from the client’s entering till an end when the sale is closed. That metrics depends on your offer and client target. Times will vary depending on number of items your client is going to buy. If you are selling electronic, clients need to get first all technical questions answered, in case of cloths you need to take into account time for try on etc.

Should be High or Low?:If sales cycle length is growing by time, you may think about your sales strategies or try to understand what a cause can be. Maybe if your inventory grew much then your customers also take more time for decision process or maybe there are some problems with your sales manpower.

Description:Average Revenue per User also known as Average Revenue per Unit. Average revenue generated by an average subscriber per month (or year). You can estimate how much a single user is worth for you and decide what kind of advertising or marketing strategies are worth to invest in.

Calculation Method / Formula: Divide the total revenue by the number of subscribers.

Should be High or Low?:This number depends on your offer prices. If your products are fairly not expensive you probably have to think more about reaching more customers and try to keep them with your competitive price offers. But in that case, it may be not worth to invest in pay-per-click advertisement method.

Description:Average Revenue per Customer (similar to APRU). Average revenue generated by an average customer per month (or year). You can estimate how much a single customer is worth for you and decide what kind of advertising or marketing strategies are worth to invest in.

Calculation Method / Formula: Divide the total revenue by the number of customers.

Should be High or Low?:This number depends on your offer prices. If your products are fairly not expensive you probably have to think more about reaching more customers and try to keep them with your competitive price offers. But in that case, it may be not worth to invest in pay-per-click advertisement method.

Description:It is a total cost of advertising to convince a potential customer to buy your product or service. It may show you how good is your marketing strategy. The target of any marketing should be gaining as much as possible new customers not just visitors without real value. You have to remember to include in the expense’s salaries, costs of software, equipment, rent etc. Conversion is very often mix with acquisition of a client it is important to know the difference, acquisition means gaining a potential client that starts a subscription but he haven’t spent money yet while conversion counts only customers who spent already money on your product or services.

Calculation Method / Formula:(Total Marketing + Sales Expenses) / number of New Customers Gained

Should be High or Low?:It is related to your campaign and marketing strategies. You should choose it according to your target based on a value of an average customer.

Description:This is a ratio between total number of leads and number of customers coming from the given group of leads. It shows how many of them actually bought some of your products. The target is to have this ratio fairly high but even if conversion rate is not very high, but the number of leads is growing your total sales will grow as well.

Calculation Method / Formula:number of new customers / total number of all leads

Should be High or Low?:You may check how your strategies or product improvement influence on the conversion rate and based on that choose some directions in growing your company.

Description:Since acquiring leads and customers through cost-per-click advertising is usually expensive, it is very important to compare it with ROI. If number of your new prospects is much higher than the acquired customers, the actual profitability of paid campaigns may drop to very low results. Conversion is very often mix with acquisition of a client it is important to know the difference,

Calculation Method / Formula:Average toal cost to gain a new customer

Should be High or Low?:If the cost is growing most likely you have a lot of visits of new potential prospects, but the conversion rate is going down.

Description:Total revenue coming from the customers compared with the cost related to this income measured in given period of time. It is very similar metrics to Customer lifetime value. The main difference is that in CLV we take into calculation all the money spent now and in the future for example due to active subscription by the customer while the customer profitability is based on the sales current and previous only. However, most of the time it is calculated exactly the same as CLV

Calculation Method / Formula:revenue earned (in period of time) – costs related to the customer relationship (in the same period of time)

Should be High or Low?: To keep this metrics on a proper level you should be tracking sales teamwork and adjust the number or employees to actual demand. If there are not enough employees your real costs may increase due to the bad customer experience etc. However, overemployment may also cause your company unnecessary extra expenses.

Description:Estimate value of the net profit coming from the entire future relationship with a client. It is the total amount of profit that average client is likely to spend over the time while being a client (Customer lifespan).

Calculation Method / Formula:one of the ways to measure LTV is:
Average value of sale * number of transactions * Retention time * profit margin

Should be High or Low?:Lower or higher number depends on type of your products or services. You can set some target and with correct investments in development and marketing strategies you can try to increase that number.

Description:Also called the attrition rate. It is a percentage of churned customers out of all customers connected either by some contract or subscription for services or products in some period of time (in a month). The main reason usually for the attrition of the customer is poor customer experience or slow service performance.

Should be High or Low?:To decrease the percentage and increase the customer satisfaction you may consider develop tactics how to value your customers and how to build a relationship with the customer.

Description:It’s important to understand your operational effectiveness by tracking the operating expense ratio. It is related to daily company’s core operations. The lower those expenses are, the higher profit is made. operating revenue and operating expenses are related to your company’s main activity

Calculation Method / Formula: Sales Expenses/ Revenue

Should be High or Low?:You can track changes and estimate possible outcomes on operating improvements.

Description:How many projects out of total were delivered within set budget. It can give a projection on the further estimations. Projects overestimated are calculated as on budget, which can give a little false output value. If calculated just for one project it will just give the idea of percentage how accurate was the budget estimation in compare to reality.

Should be High or Low?:If the number is much below 100, it is also good to calculate % of projects with overestimated budget. That can give some lead for mistakes in estimation process itself.