If you want your sales to grow, you will first need to measure and track your progress. This is a given that most salespeople in the world will understand.
Where many people go wrong is that they get stuck in the numbers. Many businesses will continuously find new data to track. This can lead to data overload.
The question shouldn’t be “what else can we analyze?” it should be, “are we analyzing the correct data?”
Simply analyzing sales data does not automatically lead to more sales. Tracking the right sales data will, however, allow you to make informed decisions.
In this article, we’re going to talk about how to track sales KPIs to grow your business.
How Do KPIs Differ From Sales Analytics?
Often, sales analytics and KPIs may cross over; however, there are differences between the two.
Key performance indicators are a staple metric in any business. KPIs are specific metrics that are attached to a company’s goal or objective.
They differ from sales analytics in the respect that they are less general. Sales analytics will look at overall sales.
Sales data will tell you about something that has happened. A KPI, on the other hand, will tell you how it happened.
How to Track Sales KPIs
Before you start tracking sales KPIs, you need to understand why that specific KPI is essential, and how you will use it to your advantage.
The key to picking the right KPI for your business is relevance. Think about what you specifically need to achieve to grow your business and track those essential metrics.
Giving all of your attention to the wrong KPIs can cost your business dearly.
Here are some examples of the type of metric you should monitor as well as how to track key performance indicators.
You need to be continually growing your business. One of the ways that you can do this is by looking for new customers and clients. This is something that works in all industries.
Think about how you can attract potential new customers into your business, and then how you can measure this.
Think about measuring who is bringing in the largest number of new leads and whether your team is hitting their quota.
New Client Aquisition
Once you have the details of a new lead, how are you converting this lead? One KPI that you should be tracking is new client acquisition.
Take the total number of new leads that you bring on board, and work out what percentage of those become customers.
Again, you can set quotas and compare individual employees’ performances based on their conversion rates.
Existing Client Engagement
Bringing new customers into your business is essential for growth, but you will only see growth if you are tracking your ability to retain existing customers.
What are you currently doing to ensure your existing customers keep using your products or services?
Finding ways of measuring KPIs surrounding customer retention and re-engagement is essential. Think about tracking how many customers respond to marketing emails.
Sales by Contact Method
Tracking sales will let you know how profitable your business is and how it is doing on the whole.
However, tracking sales by contact method will give you a more significant indication of how you have achieved your successes or failures so that you can build on these.
In a multi-channel business, there may be numerous points of entry for the client. By tracking each of these routes back, it will be possible for you to understand the effectiveness of your approach.
How satisfied are your customers? One of your KPIs might be an assessment of the customer satisfaction metric.
You can learn about how satisfied your customers are by getting them to complete online surveys. Remember to set your baseline very high and always be aiming for the highest possible percentage.
You can track this by area, location, employee, and you can compare this metric over a period of time.
This KPI is only useful if you act on the information. While it does rely on subjective data, it should be enough to motivate your employees to strive for excellence in their service.
Upsell and Cross-Sell
Are you always striving to increase the value of any sale? Many companies will couple up products together and link-sell them. Track the percentage of sales of product X with the addition of product Y.
In addition to this, there are many companies that will offer an additional product at the point of sale.
Often, this is a high margin product that is designed to only be offered during a purchase. This upsell can be easily tracked as a KPI and performance tables drawn up.
Customer Lifetime Value
In many businesses, it is vital to track the lifetime value of the customer. This will give you an insight into the longevity that your business can reap from its current client list.
By using this KPI, it will give you an idea of how quickly you need to bring new customers on board.
This information will be useful in indicating how much a customer is worth to your business, and how much time and money you should invest in acquiring them.
Putting the Pieces Together
There are, of course, countless different combinations of KPIs that you could track in your business.
Once you know how to track sales KPIs, you will start to understand how they all feed into each other.
Remember, the key to successful data analytics is making sure that you are tracking the right information and that you are using the information.
Don’t track data that isn’t relevant, it’s not only a waste of your time, but it means that you’re missing out on pushing forward in the right areas of your business.
For more helpful articles to help you progress in your small business, be sure to explore the rest of the resources on this site.