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Top 8 Sales Operations KPIs You Should Start Tracking
June 22, 2024
You have set up sales operations in your company. There are defined processes for lead generation, contacting prospects, providing tools and resources, etc.
With all these established workflows things are going fine as well.
But you feel you need some method for objectively measuring the effectiveness of these operations.
That is where sales operations KPIs come into play.
In this article, we will explore sales operations team KPIs, their importance, and ways to set up KPIs and highlight the top 8 sales operations KPIs.
Let's begin the reading.
What are sales operations KPIs?
Sales operations key performance indicators are metrics used to measure the effectiveness and efficiency of your sales operations.
Some examples of sales operations KPIs examples include Total Sales Volume, Sales Growth Rate, Sales Conversion Rate, Average Deal Size, etc.
These metrics provide valuable insights into your sales process. It helps identify your strengths and areas of improvement.
Gathering this information will help you optimize your sales strategies, and processes and enhance the overall sales operations.
These sales metrics ensure your process is optimized, resources are utilized, and strategies aligned with the overall business objectives.
Taking an objective and data-driven approach will improve your overall sales performance and business growth.
Why are sales operations KPIs important?
Evaluating the performance of your operations must be a standard practice.
This is because making a quantitative analysis of your operations will help in understanding its effectiveness and making the required changes for improvement.
For example, analyzing your sales cycle length will help identify any bottlenecks in your process. Since the gained insight is data-driven there is high accuracy and reliability in it.
It also gives the company clarity on making the right decisions to optimize workflow and allocate resources judiciously.
Similarly, including a wide variety of sales metrics as a part of your analysis will help you gain an overall idea of your sales operations.
Therefore, sales operations KPIs help you make informed decisions, enhance sales performance, and drive business growth.
How to set sales operations KPIs
Realizing the need for measuring your sales operations is a good start.
But that also means you need to pave a systematic path to make the evaluation process structured.
Here is how you can go about setting a sales operations KPI that helps you gain insights and make meaningful improvements.
Align with Business Objectives
Ensure your sales operation KPIs evaluate criteria that help achieve the larger business goals.
For example, evaluating your revenue targets or customer retention metrics will help understand the effectiveness of your sales strategies in achieving your business goals.
Identify Key Areas for Measurement
Focus on the areas where you aim to bring in improvements.
For example, evaluating lead generation or sales cycle efficiency will help in making judicious decisions on resource allocation and designing strategies for optimization.
Select Relevant KPIs
There are a wide range of sales operation KPIs out there. Choose relevant KPIs that provide actionable insights.
For example, a company focusing on increasing sales must focus on sales conversion rate, win rate, etc, to analyze the effectiveness of their strategies.
Involve Stakeholders
Effective sales operation KPIs can be selected with a combined effort from the sales team, managers, and other relevant departments.
For example, sales reps will emphasize individual sales quota attainment, Average deal size
Win rate. While a sales manager will focus on the Sales cycle length, Lead response time
Demo-to-close ratio.
Utilize Data and Tools
Incorporate tools that help streamline the tracking process and give insightful data. This information can further be used for making judicious decisions and strategies.
For example, a sales performance automation solution like Kennect provides live analytics for reps, driving motivation with immediate feedback on sales performance.
Educate Sales Reps
Your sales reps must be aware of the metrics used to evaluate them. This helps them to cater to their performance expectations and goal achievement.
For example, some companies expect sales reps to complete a set of activities like several calls, emails, etc. While others expect a sales target of $10,000 per quarter.
Monitor and Adjust
Your sales operation KPIs must align with your company objectives and performance expectations. As your goals and objectives evolve, so do your KPIs.
In a fast-paced sales environment, setting a streamlined KPI system will provide clarity to both the employer and the employee on how to go about with their sales operations.
Sales Operations KPIs You Should Start Tracking
You search for sales operations KPI and a list of words just gets thrown at you. Now all you are left with is a handful of sales terms and a load of confusion.
So we have prepared a comprehensive list of the top 8 sales operations KPIs that you should start tracking:
- Total Sales Volume: It is the total sales revenue generated within a specific period.
- Refers to the percentage increase in sales over a period.
- Sales Conversion Rate: The percentage of leads or prospects that actually get converted into actual sales.
- Average Deal Size: It is the average revenue generated per closed deal.
- Customer Acquisition Cost: The total sales and marketing cost incurred to acquire a new customer.
- Customer Lifetime Value: It is the total revenue expected to be generated from a customer over the entire period of their relationship.
- Sales Cycle Length: The average time taken between the first point of contact to the closing of a deal.
- Win rate: The percentage of deals won compared to the total number of deals closed or won.
Now we admit that this is just the tip of the iceberg of what sales operation KPIs. But these sales metrics will comprehensively analyze your sales operations to give a thorough understanding of your overall sales health.
Additional Sales Operation KPIs
Sales operation KPIs don't end with these 8 metrics. That would be like giving a glimpse of the whole picture.
So here is a bigger picture of sales operations KPIs. This longer list will give you an extensive idea to help improve your sales operations evaluation.
- Lead Response Time
- Sales Pipeline Coverage
- Quota Attainment
- Churn Rate
- Sales per Representative
- Product Performance
- Market Penetration
- Sales by Region
- Average Profit Margin
- Upsell and Cross-sell Rates
- New Customer Acquisition Rate
- Sales Forecast Accuracy
- Customer Satisfaction Score (CSAT)
- Net Promoter Score (NPS)
- Referral Rate
- Sales Activity Metrics
- Sales Velocity
- Customer Retention Rate
- Sales Opportunity Volume
- Sales Opportunity Value
It's true the list is long. So are the possibilities such a comprehensive evaluation opens up as well.
The choice of KPI depends on many subjective factors. The company objectives, what areas of improvement you plan to make, and what your desired outcomes are.
What is the difference between Procedural and Resource Metrics?
As you have seen, sales operation KPIs are extensive. But these metrics can be divided into two based on what they strive to evaluate- procedural and resource metrics.
Procedural metrics
As the name suggests, the metrics evaluate procedures, processes, or activities.
For example, a company gets many inbound leads through its website and marketing campaigns. The chances of closing a deal with these leads depend on how fast you respond to these new inquiries.
It is the activity of following up that needs to be evaluated in such a circumstance. In other words, the effectiveness of your lead response time determines the efficiency of your sales process.
Resource Metrics
The focus of evaluation here is on the allocation, utilization, and efficiency of resources.
For example, a company wants to evaluate how much it costs to acquire a new customer. They gather information about the money put into their sales and marketing campaigns.
The metrics highlight the cost-effectiveness of these campaigns and the return on investment gained. Gathering this information will help the company improve its sales and marketing campaigns.
So here is a list of procedural and resource metrics to help you get a better idea.
Keeping a tab of both these metrics gives you a comprehensive view of your overall sales operations.
Using Data to Optimize Sales Operations
Data is transforming the way we know business operations.
It is important and inevitable.
The simple reason for this increasing popularity of data is the valuable and actionable insights it provides. Information that optimizes your sales operations, drives efficiency, and enhances your overall sales performance.
Just think about the great leaps sales operations KPIs make.
Your lead response time highlights drawbacks in the sales process.
Your Customer Acquisition Cost provides an understanding of return on investment.
Your call-to-meeting ratio or email response time reveals the efficiency of your sales process.
We have mentioned just three KPIs to make our point. You already know the list is long.
With just these three KPIs you can streamline workflow, make cost-effective budget allocation, and improve sales rep upskilling respectively.
Data is unavoidable. You need to monitor and analyze these data points to ensure the competitiveness of your business in the current market.
The perks: informed decision-making, refined sales process, high conversion rate, sales closing, revenue growth, and many more.
Final Thought
The choice is yours. In the long list of sales operations KPIs available, what best suits your operations is a subjective decision.
However, there is no question whether KPIs are a requirement or not.
At this stage of business operations, it's inevitable.
We understand that there are a lot of KPIs out there and each has its own relevance. In such a circumstance monitoring and tracking these metrics becomes a tedious part.
That is why sales performance automation solutions make things easy.
Choose Kennect’s sales performance management with confidence. We equip you with the insights and tools needed to make informed decisions that propel your sales performance forward.
Equip your managers with real-time performance analytics optimized strategy and targeted coaching.
For more information on how Kennect tracks your KPIs and boosts performance, Book A Demo with us.
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