Having a robust sales strategy is the key to the success of every business. Therefore, in order to maximize the sales teams’ success, organizations have become increasingly dependent on their sales operations.
By implementing a fully-functional sales operations system, organizations can build data-driven sales strategies, target more territories, increase lead generation, and lay down the solid groundwork for their front-line sales team.
However, integrating sales operations workflow within your organization isn’t enough. Your team needs a way to monitor and measure their ops’ performance to evaluate the actual ROI and find ways to improve the effectiveness of their sales operations planning. That’s where implementing specific KPIs for sales operations can help your organization. By tracking the right KPIs metrics, you can develop a performance-driven sales culture in your organization and achieve tangible business results.
In this article, we’ll explain 8 KPIs that are essential to track the success of sales operations planning.
Before we dive into the KPIs for sales operations, let’s discuss what sales operations KPIs are and why they’re crucial for your business.
Sales operations KPIs are quantifiable values that help organizations track and analyze their sales team’s performance. By using KPIs, or key performance indicators, you can gain insight into the efficiency and success of your sales ops team against specific overarching goals.
Sales KPIs are never a one-size-fits-all solution for organizations, it often depends on the sales operations planning, organization structure, and even individual approaches of sales ops managers.
There is a spectrum of KPIs and to identify which KPIs need to be tracked to benefit sales operations, it's imperative to evaluate the top sales KPIs that align best with your business objectives.
The key to steady sales growth is to understand how your sales pipeline is operating. And, this can be achieved by having a defined set of sales KPIs that can help gain visibility into the health of your sales ops team. These KPIs for sales operations can also benefit your organization in the following ways:
Analyze performance: It allows organizations to monitor and evaluate the performance of their sales ops team, which helps them to identify areas of weakness and improve their overall efficiency.
Help in annual target planning: KPIs can be used to set annual targets for the sales team and gauge the progress made towards achieving them. This keeps the sales ops team focused on the most essential tasks and ensures the organization meets its goals. Furthermore, it allows your team to better predict revenue for the current sales cycle, and determine whether your current processes are effective.
Cooperate in making strategic decisions: By implementing the right sales ops KPIs, organizations can gain valuable insights that are needed to make informed and data-driven decisions. It can provide a clear overview of your sales strategy planning and can help you predict future trends and sales in order to stay competitive in the market and grow your business.
KPIs are a key component of sales operations for assessing if processes and models are functioning properly as well as identifying weaknesses in sales strategy. So, let’s dive into the 8 most important KPIs that are must-haves for your organization.
1. Lead to Opportunity Ratio
This KPI metric measures the percentage rate of your total leads that have managed to qualify as opportunities. It helps the sales ops team to effectively build pipelines and forecast sales volumes.
By using this KPI metric, you can evaluate the efficiency and ability of your sales ops team to accurately qualify high-quality leads through careful consideration and analysis.
How to calculate the lead-to-opportunity ratio
A good lead-to-opportunity conversion rate varies depending on your industry type, business, and even marketing and sales strategy planning. On average, the conversion rate hovers around 13%, with an average time of 84 days.
2. Opportunity to Closure Rate
The key to success lies in closing more deals. With this KPI, you can measure the percentage of opportunities that have successfully closed. It helps analyze the effectiveness of your sales strategy planning, the health of your sales funnel, and the efficiency of your sales ops team in closing rates.
Using this metric, you can gain insights into how well your sales process is operating and quickly summarize the results that your sales operations team has produced in a given period, based on all sales KPIs.
How to calculate the opportunity to closure rate
3. Average Sales Cycle Length
This KPI metric measures the average amount of time that your sales ops team takes, starting from the initial contact with a prospect to closing the deal.
Since speed is the critical factor in a healthy sales pipeline, sales leaders should strive to minimize the average length of the sales cycle in order to maximize the success and efficiency of the sales pipeline. The shorter the sales cycle length, the higher your revenue growth.
With a sales cycle in place, your sales team can develop the predictability of their sales forecasting and create effective sales strategy planning since they always know where their lead is within the cycle.
According to sales benchmark research, the average sales cycle length of B2B organizations is 102 days.
How to calculate average sales cycle length
4. Customer Acquisition Cost (CAC)
From marketing campaigns to outbound sales for acquiring new customers, it all costs money. With this KPI, you can track all expenses spent on converting leads into customers.
This KPI for sales strategy assesses the cost-effectiveness of your sales funnel by evaluating the resources you need to close a deal and also identify areas in need of adjustment. Keeping track of CAC will give you a benchmark for evaluating your organization's profitability versus its costs.
How to calculate customer acquisition cost
5. Average Ticket Size
Average ticket size measures the average amount of money that each customer spends on one visit. By tracking this KPI, you can analyze the performance of measures that your sales ops team is taking to boost sales revenue.
You can also increase the average ticket size by offering discounts, point-of-sale promotions, and keeping a range of products with all sizes available.
How to calculate average ticket size
6. Average Customer Lifespan (ACL)
This KPI measures the average length of time that a customer remains a customer of your business. It is used to assess customer satisfaction and loyalty. For instance, having a high ACL signifies that customers are pleased with your services, while a low ACL may imply a high customer churn rate. Furthermore, it can be implemented to identify trends and patterns in customer behavior and modify the sales strategy planning accordingly.
How to calculate ACL
7. Customer Lifetime Value (CLV)
A customer lifetime value is an average of the amount your business earns per customer during the period they remain loyal to your business. It’s one of the core KPIs for sales operations that can help understand your organization’s profitability per customer. Furthermore, it can assist your sales team in identifying the right leads by providing them with customers' key attributes. This can help them focus on the prospects who have a high ROI potential and close the right deals.
How to calculate CLV
8. Forecasted Pipeline Value
Forecasted pipeline value is a metric that predicts the potential revenue that an organization can expect to develop from its current sales funnel. By tracking this KPI, you can plan a budget for future expenditure and sales growth. It can also be used to identify potential issues, for instance, if your forecasted pipeline value is unexpectedly lower than expected, it may indicate problems with the sales strategy planning, like poor qualified leads or low closing rates.
How to calculate forecasted pipeline value
Sales operations KPIs help sales leaders and sales reps to examine the performance of their teams. However, in order to do this, it’s imperative that everyone in your organization has access to accurate CRM data. By visualizing the right data, your sales ops team can optimize their sales pipeline, track progress against targets, and focus on what matters the most. For instance, the right CRM data can help in measuring the reliable customer lifetime value, which is a core KPI for sales operations to determine the overall value of a customer's lifespan to your business.
Therefore, it’s essential to ensure that the CRM data is accurate, complete, and up-to-date in order to get the most value out of it.
According to a Linkedin report, 58% of sales ops professionals have issues finding accurate data within their organization.
However, If your system has bad CRM data quality then the metrics and reports derived from it will also be inaccurate or incomplete. It will ultimately lead to a skewed understanding of customer value.
Therefore, having good CRM data quality is important as it can provide the sales ops team with the valuable insights that are needed to make data-driven decisions, forecast future sales, and improve the overall performance of the sales team.
The client is a San Francisco-based organization that revamps the way businesses engage and communicate with their customers. They primarily catered to non-profit organizations and had data of more than 1 million accounts. Also, their CRM system contained generic customer data with no classification, which resulted in low conversion rates and poor revenue generation.
However, Daffodil Software helped the client with its Data Enrichment Services. By going through over 5000 records each day, our data stewards divided the CRM data into sections (specifically into taxation and business focus areas).
As a result, they gained better visibility into their CRM data. With our data enrichment approaches, their sales team refined their GTM strategy after finding their niche market and were able to run successful campaigns and leverage newer opportunities consistently. Read about this case study, here.
By tracking relevant, actionable, and measurable KPIs you can get a better understanding of your business performance and what you need to do to achieve overarching goals. It can help identify how your sales ops team is doing in creating the perfect tactical roadmap for closing deals faster. We’ve shared 8 robust sales KPI metrics that can help track the success of your sales ops team but these are only effective if you actively measure them and act on them.
If you want to measure the performance of your sales ops team to gain insight into how they are proceeding toward their end goals and help you maximize your revenue, then Daffodil is the right data enrichment partner for you. We’ll help you optimize your sales process and refine your sales strategy to drive better results.