Affiliate Tracking - Chapter 1: What is it?
(And why do you need it?)
READY? - SET - GROW! - Sales KPIs
You are probably reading these lines, since you already know how important KPIs are (Key performance Indicators). And if this is the first time you encounter this term, you are more than welcome to read all about it here.
But to Sum up the basics, KPIs are the core of every measurable process. They are essential keys to measure your strategies effectiveness, and as a result determine your success and goals’ achievements.
Sales KPI
READY?
KPIs in sales, are metrics that tell your financial story. The story of your conversions, revenue and the state of your business decisions inside and outside.
There are a lot of metrics related to sales (really. tons), but they are usually very effective and useful when focusing on a number of defined major business goals and secondary objectives to support them. KPIs can be related to various resources of your business, such as conversions, customers, marketing team, time frames, and of course your employees. But the most relevant KPIs are the ones which will help you define the right strategy, and promote your goals.
As mentioned before, there are endless sources of information regarding every action in your business. As long as it is measurable – it can be quantified and examined. The key to success is understanding the most important processes in your business and finding the most relevant metrics for it accordingly. Which will eventually give you insights that will be translated into actions that you can start right away. In the business world time equals money, and to optimize your time resource, setting the right KPIs, for creating the most appropriate strategies for your business, is extremely important. E-commerce businesses vs. SaaS-based businesses for example, will choose different sets of KPIs, as they focus on different goals (in this case: high customer numbers and growth based on individual purchases, versus recurring revenue).
SET
Defining which is a right KPI for you, is extremely important. The right KPI is the one that will make your work efficient and save you time and money. For that to happen, you will need to start at the end. No, don’t go to the bank and collect the money yet, but it will happen, and probably faster than you might think ! Identifying the company’s overall goals will be the beginning of the process, and taking initial actions will be the end of the
Choosing your best Sales KPIs starts with these 5 steps!
- Identify specific goals.
- Setting team and personal objectives.
- Determining actions that promote your goals (work in reverse order!).
- Selecting relevant KPIs
- Process transparency.
Identify specific goals
Is your goal: the company growth? How would you define growth? Is it adding more customers? Increasing annual income? In the field of sales, there are usually one or two major primary goals and a number of secondary objectives to support them. Your major goal might be to add more customers, and the objectives can be increasing the number of new customers per month.
Setting team and personal objectives.
Set individual objectives, that will help the business reach its primary goals. Work together with your marketing team to set these objectives. Once you have identified goals, examine which secondary ones can be measured and serve to achieve them. Here are some examples for goals and supporting objectives:
Determining actions that promote your goals
Choose one primary goal, and select specific actions that will help promote it. Consult with your team: which are the actions that can be taken immediately, and will help achieve these goals. If, for example, the goal is to increase the number of new customers per month in 30%, think about the steps your team needs to take to achieve this goal. This can be: Team A needs to have X phone calls a month, or team B, should schedule X meetings with potential customers in a month, Etc. Defining specific actions will allow you to select better and more accurate KPIs.
Selecting relevant KPIs
Now that you know what specific actions are required to achieve your goals, you can choose specific KPIs that will meet them. The more accurate and specific you are, the more effectively you will be able to track your daily, weekly or monthly progress. Ongoing monitoring of goal achievement will help you determine the right marketing and sales strategies. You will be able to gauge the efficiency of the processes, and identify weaknesses in the process. A good KPI will be one that will reflect your current situation, and tell you what actions are required to improve outcomes. For example: If not enough meetings have been scheduled during a month, according to a goal you have set, you should talk to your marketing team, and resolve this specific problem.
Process transparency
Every control process should begin and end with clear data that is presented transparently. We believe that in order to create and maintain an efficient process, a reliable and interactive professional KPIs Dashboard must be created. This is the right way to ensure the relevant data is reflected to its specific team. Clear reliable data will help you and your team understand weak points and the actions required to solve them. This is one of the things we in Kronoseal specialize in; Setting professional dashboards with the most relevant KPIs sets for your business goals.
GROW!
Leading Sales KPIs -
If sales are the heart of every selling business, then KPIs are the heart beats that allow everything to work well. But enough metaphors! If you kept reading till here, let us help you make your business profitable!
Here are some of the top Sales KPIs trending:
Sales
Total Sales that can be monitored by the hour, day, week, month, quarter, or year. This allows you to compare different time frames to the previous ones.
Gross Profit
Subtract the total cost on your products from the Total sales. This KPI is one of the basic KPIs that simply tells if your business is earning or losing money on its sales.
Conversion Rate
Total Number of buying customers divided by the total number of visitors.
This KPI shows you how long it takes for a lead to convert to a customer. It also indicates your productivity, a good rate will tell you that you are on the right path to achieve your goals.
Customer Lifetime Value (CLV)
This is a KPI that determines how much revenue your company can expect from individual customers. Meaning how much they are worth to the company, during their relationship with the company. This metric allows you to focus on relationships, trust and customer loyalty.
Customer Acquisition Cost (CAC)
Costs Spent Acquiring Customers / New Customers. Meaning how much it actually costs your company to acquire a new customer.
This also includes marketing, advertising, salaries, and other hidden costs, that is why the customer acquisition cost is also a marketing KPI that tracks how efficient your marketing efforts are.
Average Order Value (AOV)
This KPI tells you how much a customer typically spends on a single order on a website or mobile app. To calculate your company’s average order value,divide total revenue by the number of orders.
This is a very important KPI, and essential to growing revenue for your business. This KPI can also give you some important insights; Like how much do you spend on new customers, do your marketing efforts allow a return on investment (ROI), and what are the profit margins of your business.
Remember, These are only a few of an endless number of metrics you can choose from. The key is to select the most relevant ones that will answer your business’ goals.
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The bottom line is that KPIs measure success, predict success, and are a necessary tool for success.
Every business wants to be successful, and every business can have infinity ways to get there, the question is at what cost and in what time frame?
KPIs are created and built to maximize your efforts, to the minimum necessary to maintain the right path to success, and to drive effective ways to take actions in the right direction.