A KPI (Key Performance Indicator) is a way to measure the impact of your sales processes and procedures on the business. This blog provides ten examples of B2B sales KPIs, which will help you understand the importance of these metrics and how to implement them in your sales process.
The Importance of B2B Sales KPIs
Sales KPIs are the most important metrics for sales teams and managers because they are used to determine the sales team’s effectiveness. The sales KPIs can be used throughout the year to develop a sales activity plan, as a basis for key performance evaluation, or to see if the team needs to make any changes to improve the performance. Sales KPIs are also important for business owners because they identify trends that can impact the business, for example, if it is losing money in a certain geographical area.
Some of the most commonly used sales KPIs include:
- Sales revenue is the main sales metric for businesses since it shows how much money is made from sales. However, it does not always present a complete picture of the performance of the business since it does not show how much profit was made from the sales. If the business has many costs associated with the revenue, such as marketing costs or overhead costs, the profit from the sales might be very small or even negative.
- Conversion rate: This shows what percentage of website visitors buy products or services from the company. If a company has a website that generates ten leads per day, but only two people buy a product after visiting the website, the conversion rate is 20%. If the conversion rate were higher, the number of sales would be higher.
- Churn rate: This shows the number of customers who stop buying or using a product or service and therefore must be replaced. For example, if a company has 1,000 customers and loses 50 customers in one month, it has a churn rate of 5%. If the churn rate were higher, the business would have to spend more money on acquiring new customers to replace those who left.
- Average order value: This shows how much each customer spends on average each time they buy from a business. If the average order value is $50, then each customer spends an average of $50 per purchase. If the average order value is $100, then each customer spends an average of $100 per purchase.
- Cost per acquisition: This shows how much money a business spends on each customer acquisition. If the cost per acquisition is $100, the business spends $100 to acquire each new customer. If the cost is $10, the business spends $10 to acquire each new customer.
The B2B Sales KPI Examples
#1: Revenue per Sales Rep
The revenue per sales rep is a good example of a B2B sales KPI. This metric shows how much revenue your sales team generates per sales rep. For example, if you have 20 employees, you may have three sales reps, meaning each rep is responsible for $600,000 in revenue. On the other hand, if you have ten employees, you may have two reps, and each rep will be responsible for $300,000 in revenue.
The revenue per sales rep KPI will give you a good indication of the efficiency of your sales team and the effectiveness of your hiring process. If you have hired sales reps who are not as effective as your other employees, this metric will help you identify the problem.
#2: Average Revenue per Account
If you sell products to larger organizations, tracking your average revenue per account is a good idea. This metric indicates how much money you generate for your company from each customer and shows how well your sales team is doing at upselling. For example, if you have ten customers with an average of $10,000 in annual expenditures with your company, you have $100,000 in annual revenue from these accounts. If you have 30 customers with an average of $5,000 in annual expenditures, you have $150,000 in annual revenue from these accounts.
#3: Percentage of Opportunities Won/Lost
This KPI shows how many deals your sales team has won over the past three months. It also indicates how well your sales team executes the sales process. If you want to improve this metric, you can focus on training your sales team on how to improve their closing skills.
#4: Number of Leads/Opportunities
The number of leads and opportunities your sales team has created over the past three months is a good example of a B2B sales KPI. The number of leads and opportunities will give you an idea of how effective your lead generation campaigns are and how well your sales team is following up with leads. If you have a lot of leads and opportunities, you may have a good lead generation strategy.
#5: Number of Meetings per Lead/Opportunity
The number of meetings your sales team has scheduled with leads and opportunities over the past three months is another good example of a B2B sales KPI. If you have a lot of meetings scheduled, you can assume that your sales team is following up with leads and opportunities.
#6: Number of Opportunities Won/Lost
This KPI shows how many deals your sales team has won over the past three months. It also indicates how well your sales team executes the sales process. If you want to improve this metric, you can focus on training your sales team on how to improve their closing skills.
#7: Number of Meetings per Opportunity
The number of meetings your sales team has had with leads and opportunities over the past three months is a good example of a B2B sales KPI. If you have a lot of meetings scheduled, you can assume that your sales team is following up with leads and opportunities.
#8: Time to Close/Time to Win
This KPI shows how long it takes your sales team to close a deal. It also indicates how well your sales team executes the sales process. For example, if you have a large number of opportunities that are still open after six months, it’s an indication that your sales team is not closing deals on time. You can improve this metric by training your sales team to improve their closing skills and increase the closing time.
#9: Number of Meetings per Opportunity
The number of meetings your sales team has held with leads and opportunities over the past three months is a good example of a B2B sales KPI. If you have a lot of meetings scheduled, you can assume that your sales team is following up with leads and opportunities.
#10: Number of Contract Signals per Opportunity
The number of contract signals your sales team has given to leads and opportunities over the past three months is an example of a B2B sales KPI. This metric indicates how well your sales team follows up with leads and opportunities. You can improve this metric by training your sales team to communicate with leads and opportunities effectively.
Conclusion
As a B2B sales manager, you should clearly understand your business goals and how to measure the impact of your sales processes. These 10 B2B sales KPIs will help you determine whether your sales team effectively closes deals and generates revenue for your business. If some of these metrics are not in line with your business goals, it’s a good idea to focus on strengthening these areas.