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Discover the best sales indicators to improve your sales strategy and make informed decisions to drive the success of your business with this blog!
Analytics and data creation are crucial actions in marketing, so as the skilled marketer you are, let’s interpret the indicators that are part of the sales domain.
To enhance your sales strategy, it’s essential to consider key sales indicators and always align with data and analysis.
Do you want to precisely understand whether your business is growing or not? Join me to learn how to do it and take precise actions.
Ready? Let’s get started!
What Are Sales Indicators?
Generally, sales indicators are quantitative and qualitative metrics used to measure the performance of sales in a company.
The main purpose of this concept is to gather all possible data throughout the sales process, from lead generation to closing the deal.
This data may include information about user behaviors, conversion rates, and average sales over an estimated time.
They also identify which tactics will lead to the best results.
It’s a term widely used in business and marketing, and let’s see what it offers:
- Provides an objective view of commercial performance, enabling the sales team to make data-driven decisions.
- Optimizes efforts after understanding what works and what doesn’t based on these indicators’ results.
- You can use indicators to measure the performance not only of the sales department but also of marketing or any department in your company.
- Comprises a strategic plan and optimizes key actions to improve them.
- Adapts to changes in the market and trends.
In essence, the impact of these metrics is to understand how actions are performing and to achieve the objectives.
Importance of Sales Indicators
Sales indicators play a crucial role in commercial strategies.
Here are some reasons why they are fundamental:
Identification of Opportunities: Implementing sales metrics makes it possible to identify opportunities for improvement, such as understanding bottlenecks in the sales funnel or knowing market challenges.
Performance Evaluation: Detailed knowledge of the performance of sales teams. This helps recognize weaknesses and strengths, allowing corrective measures for the actions taken.
Monitoring: Monitoring the progress of established goals will lead to adjustments in strategies or changes if necessary, all in pursuit of reaching proposed goals.
Decision-Making: To avoid relying on assumptions or intuitions, the collected data will shed light and provide support for executed strategies, minimizing risks.
What Are the Main Sales Indicators?
Having a solid sales strategy is crucial for success, so using effective sales indicators is key. Let’s look at some of these KPIs with practical examples.
Number of Qualified Leads: One of the most important indicators to analyze, as it helps evaluate the performance of the qualified lead generation strategy. The effectiveness of this measurement allows you to assess the success of the marketing plan.
Example: Through the WhatsApp button on your website, you can acquire ideal customers interested in buying.
Number of Customers: This indicator is part of the first stage of the sales funnel. It shows the number of potential customers interested in buying after providing their contact details.
Example: A marketing campaign with free downloadable material for the user, who, after providing personal information to obtain it, becomes a lead or a new customer.
Number of Sales: It is the most down-to-earth indicator regarding sales volume. You will know exactly how much was sold in a certain period.
Example: A financial institution’s sales advisor is given a prospect database under a strategy, and effectiveness is measured by calculating the number of sales made from the database.
Conversion Rate: Measures the proportion of qualified customers. A high conversion rate indicates that the sales process was efficient.
Example: If a company has 200 monthly website visits and gets 20 leads, then the conversion rate is 20%.
Sales Cycle Time: Measures the average duration from the first contact with the potential customer to the closing of the purchase. This identifies why the user abandons the action.
Example: If the average sales cycle of your business is 50 days from the first contact, and the number of effective sales was 10, the time corresponds to 5 days.
Average Sale Value: This metric calculates the average value of each successful sale and determines if value sales are being achieved.
Example: An e-commerce store has an average order value of $100,000 and completes 100 orders per month, generating $10,000,000 in revenue over 30 days.
Customer Satisfaction (CSI): Evaluates the overall satisfaction of customers during the shopping and service experience. A high score in this indicator can lead to higher retention and positive recommendations.
Example: A user can give their perception of the service received, either in rating or a suggestion.
There are significant numbers of sales indicators; they can vary depending on the type of business or the market.
The important thing is to identify the most relevant indicators for your business and manage to track each of them.
Note: To have a more robust analysis of sales indicators, you can use tools like a sales CRM to have accurate information. Having data will always help in making better decisions.
How to Use Sales Indicators in Your Sales Strategy
Sales indicators are valuable for improving the performance of the sales strategy.
To use these metrics effectively, you can:
Establish Clear Goals: Objectives should be realistic, measurable, and achievable within a specific time frame.
Identify the Most Relevant KPIs: Clearly understand which indicators or KPIs (Key Performance Indicators) you are going to use. It will be crucial in this process. Also, assess whether these metrics align with the proposed objectives.
Analyze Results: Once you have all the information from the collected data, highlight patterns, variations, trends, and actions that can strengthen strategies.
Monitor: Regularly monitor the indicators to justify progress.
The famous phrase from British physicist and mathematician William Thomson, “What gets measured gets managed,” applies both to measurements and commercial strategies.
How Are Sales KPIs Measured?
KPIs (Key Performance Indicators) are factors that measure the performance of a strategy, in this case, sales department actions.
There are possibilities to measure sales KPIs with famous CRMs (Customer Relationship Management), tools responsible for generating reports with data collection.
You can do it with a tool that specializes in structuring sales processes and tracking the sales team to meet set goals.
You must establish your brand’s KPIs and not fall into the practice of measuring everything.
It should be clarified that metrics are different from KPIs, as the former deals with more quantitative aspects, such as the number of sales, the number of new customers, while KPIs focus on qualitative measures.
You can find some KPIs for sales, such as:
ROI (Return on Investment): A metric used to determine the profit obtained from an investment. It helps the sales team know the measurement of the performance of investments made.
Total Revenue: The total amount of money from sales of a product/service in a specific period.
CPC (Cost Per Click): A method of charging for paid ads in which you pay per number of clicks. It helps measure the results of ads.
CPL (Cost Per Lead): This metric verifies the exact profitability of marketing or sales plan actions, i.e., how much it costs to capture a potential customer.
This is a crucial exercise for your strategic plan, so we’ll mention the steps you should consider when implementing these metrics.
Analyze the Problem: Indicate what you want to measure in your company and, of course, that it aligns with the brand’s objectives.
Open Questions: Do the task of asking yourself: What do you want to measure? Do they align with the goals of the company?
Timeline: KPIs can be weekly, monthly, or annual, depending on the actions you are taking.
Report Results: The sales team must be informed of the results and the decisions to be made under this. You will need to establish synergy, which will be essential to meet the objectives.
Advice: You have to reflect and know what happens if you want to obtain reports of sales and marketing indicators, landing both results in a more comprehensive tool or in a Google Data Studio.
It is possible that you are currently building a powerful community with your target audience, but it is not having a return on investment in sales.
Precisely, indicators or metrics allow the above, to know if there is a positive ROI.
More and more companies are looking to position themselves and be the best in the market, so keep going and continue learning from the magical world of sales and marketing with Tribal Worldwide.
