Setting sales and marketing KPIs remains the easiest and most basic way to track your team’s performance. When your team meets its KPIs, it assures managers that their sales strategy works.
But, what are sales and marketing KPIs you need to track?
In this guide, we’ll provide you with what you need to know about setting sales KPIs. This helps ensure that they are the most effective indicators of a good team and individual performance.
WHAT ARE KEY PERFORMANCE INDICATORS (KPIs)?
Key Performance Indicators (KPIs) are the critical benchmarks of progress toward your business goals. It helps you focus on strategic and operational improvement. In addition, KPIs create an analytical basis for decision-making, and help focus attention on what needs to be improved.
Through KPIs, managers and team members know what matters most, letting them focus on indicators that they lack.
According to KPI.org, KPIs are good for business if it:
- Provides objective evidence of progress towards achieving the desired result
- Measures what needs to be tracked to help achieve better business decisions
- Offers a comparison that shows the degree of performance change over time
- Tracks efficiency, effectiveness, quality, timeliness, governance, compliance, behaviors, economics, project performance, personnel performance, and resource utilization
- Balances between leading and lagging indicators
8 SALES AND MARKETING KPIs YOU NEED TO TRACK IN 2022
Cost per Lead (CPL)
Cost per lead, commonly known as CPL, enables sales and marketing managers to measure the cost-effectiveness of their marketing campaigns to generate new sales leads. It allocates a dollar amount to each lead your campaign collects, allowing managers to analyze the effectiveness of online ad options, such as AdWords or social ads.
In addition, an effective CPL should be low with a large overall number of viable leads.
MARKETING QUALIFIED LEADS (MQLs)
A Marketing Qualified Lead (MQL) is a customer interested in your products and services. MQLs are leads who often intentionally engage with your brand by performing actions, such as submitting contact information, subscribing to a program, downloading materials, or visiting your website.
Tracking your MQLs lets you see if your campaigns effectively generate leads ready to purchase your products and services.
Including customer retention in your KPIs is vital as it measures your business’s effectiveness in retaining clients over the long term. This is important because engaging new customers cost your business more than working with current clients.
COST PER CUSTOMER ACQUISITION
Sales managers can calculate cost acquisition by dividing all the costs spent on acquiring more customers (marketing and sales expenses) by the number of customers acquired in the period the money was spent.
For example, if your business spent $1,000 on marketing and sales efforts in a year and generated 50 customers in the same period, your CAC is $20.
Once you have calculated the CAC of your organization, you can see if the value is tolerable when compared against other key business metrics. In doing so, you will also discover crucial insights about your marketing, sales, and customer service campaigns.
ROI might be the most important indicator to track and assess. This allows you to measure how much revenue you get through a specific marketing campaign, then compare it to the costs of running it.
To compute ROI, you take the sales growth from that business or product line, subtract the marketing costs, and then divide it by the marketing cost.
SALES QUALIFIED LEADS (SQLs)
The sales qualified leads indicator gives you an overview of the number of potential customers who become sales opportunities. Through this metric, you’ll determine the strengths and weaknesses of your lead generation and sales pipeline.
It is crucial to track your opportunity-to-win ratio as it gives you the success rate in converting qualified leads into closed deals. This shows you who among your team is good at creating opportunities but not as good at closing deals.
Of course, you also have to track the progress of your organization in closing deals and generating sales revenue. This shows you your current status and determines your company’s growth trends and projections.
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