Effective sales is the foundation of every successful business. If you can’t sell your product or service, you’re out of the market.
That’s why Sales Ops is one of the most important functions in every fast-growing company. Its role is to help create a solid sales strategy and support the front-line sales team.
However, your team needs a way to track their work to ensure their work is helping the sales team. That’s where setting specific KPIs can help you.
What are key performance indicators?
KPIs (key performance indicators) help you see how well your company is moving towards a specified goal.
They allow you to measure the effectiveness of your sales strategy. Tracking them also shows you if your decisions are moving the company in the right direction.
Of course, the exact sales operations KPIs may differ between companies. Usually, they depend on the strategy, company structure, and even individual sales operations managers.
KPIs often depend on the individual approach of teams to achieving the company’s goals.
Why is tracking sales operations KPIs important?
One of the key reasons you should be tracking Sales Ops KPIs is their huge impact on revenue and sales.
Why is that?
Usually, different teams have varying KPIs.
However, if the teams share specific objectives, they might also share certain KPIs. This is the case for Sales Ops, Rev Ops, and the sales team.
For example, Sales Ops often oversee field sales team KPIs. They do that to help them achieve their own sales goals.
So, tracking those shared KPIs is key to understanding the company’s sales and revenue.
Moreover, when sales and Rev Ops align their goals, they can exchange data and insights.
This allows them to improve the company’s sales and revenue-generating processes.
Of course, that doesn’t mean that Sales Ops will work with Rev Ops on all of its functions. But, where the two can cooperate, such cooperation can give sales a huge boost.
Still, fewer than half of B2B SMBs follow the Sales Ops good practices of sharing KPIs with marketing and sales:
Moreover, 1 in 10 companies fail to set any targets for the year ahead. It’s also one of the reasons why 77% of those companies remained small at scale.
And out of those who set them, many set too many, too few, or set them incorrectly. Here are a few sales operations good practices to make those KPIs effective.
What makes a good sales operations KPI?
Setting Sales Ops KPIs doesn’t have to be complicated. One of the foundations of an effective KPI setup is to ensure you’re able to track all of the KPIs.
After all, what’s the point of setting a goal if you ignore it?
Of course, every KPI you set needs to be helpful for the sales ops team. Most importantly, it needs to:
- Help Sales Ops pros understand if their work is moving the company in the right direction. Sales Ops KPIs should track things that result from the actions of the Sales Ops team.
- Help leaders understand if they’re making the right strategic decisions. Don’t make your KPIs too narrow or focused on small numbers (leave specific metrics for that). Effective Sales Ops KPIs should offer a high-level view of your business’s situation.
- Lastly, a good sales operations KPI should be tied to key business goals. They should track the company’s performance in an area that’s critical to hitting those goals.
Of course, just because a KPI follows those rules, doesn’t mean it’ll be effective. You also must ensure that you pick a KPI your company needs. Here are some of the most popular Sales Ops KPIs.
Different types of sales operations KPIs
The below list includes all the most popular KPIs. They’re listed in no particular order. That’s because a particular KPI may be more important for you than for others.
However, certain KPIs give you more insights into company performance than others.
Of course, you don’t have to introduce all of them to make your Sales Ops team work efficiently.
1. Forecast accuracy
This KPI measures how accurately your Sales Ops team leaders can predict future sales.
Why it’s important: Accurate forecasting is a vital KPI for long-term business success. First, it helps make accurate spending decisions regarding key accounts.
Moreover, if you’re growing fast, forecast accuracy helps you plan your future investments.
Lastly, when your Sales Ops shares this KPI with Rev Ops, they can use it to predict overall revenue.
What to look out for: Relying on this metric alone is dangerous. After all, great forecast accuracy in one period doesn’t guarantee future accuracy.
Ideally, you want to have enough past data to be able to see the accuracy of the metric itself over time.
Tracking data for an extended period is key to creating a benchmark that can tell you if your forecasts make sense.
2. Sales cycle length
It tracks the average time it takes from the first contact with a prospective customer to a successful conversion.
Why it’s important: First, the metric helps add predictability to forecasting. When you know how much time it takes to close a deal, you can predict more accurately when it will close.
In a longer sales cycle, this metric helps you see how the different stages of the process impact its length. Then, you can look for ways to optimize them.
Similarly, when your sales cycle length is going up, it may help you spot problems in time to fix them. These often include poorly qualified leads or a new, unprepared salesperson.
What to look out for: Sales cycle length depends on various factors. It differs significantly between B2B and B2C companies. It may vary between individual lead sources or salespeople. A good way to counter the impact of those factors is to segment the audience.
3. Pipeline value/volume
The pipeline volume KPI tracks the number of leads in the pipeline against a pre-set goal. Similarly, the pipeline value KPI does it for the value of leads.
Why it’s important: Each of those KPIs comprises a few sales metrics. Together, they create a KPI that can help you determine if your sales team is on track to meeting its sales goals.
Looking at the performance of individual pipeline stages helps you find issues that prevent you from hitting your goals. As such, it’s a critical metric for understanding how well your sales pipeline performs.
What to look out for: The biggest problem with this KPI is that it only shows you the big picture. To dive deep into it, you must couple it with individual metrics.
4. The ratio of closed deals
It tracks the ratio of people engaged by your sales team to those who were closed.
Why it’s important: First, it tells you how well your salespeople process leads. As such, it can be used as part of a grading system for individual sales reps.
However, it can also help you assess the quality of leads — especially if you track it separately for different segments. That way, you can see if the problem is in the poor quality of leads or insufficient skills of your salespeople.
What to look out for: The data you use to track this KPI tends to fluctuate. The metrics that make up this KPI can depend on things other than lead quality or sales team efficiency.
For example, lead closure may fluctuate throughout the year. Market changes may also impact it. To get accurate results, it’s important to determine if there are such factors – and keep them in mind.
5. Touchpoints to the first meeting/video sales call
This KPI tracks how many touchpoints it takes to book the first sales meeting.
Why it’s important: Just like the ratio of closed deals, this KPI can help both sales and marketing.
For example, it shows how well sales and marketing materials help push people down the funnel. Similarly, it indicates how good your salespeople are at setting the first meeting or sales call.
What to look out for: This KPI is often critical for B2B companies or those with products with a long sales cycle. However, it’s irrelevant for small products.
In some situations, this KPI may not belong to sales at all. This happens if salespeople are the last touchpoint before the meeting (so there are no follow-up calls). In this case, the entire warm-up process is done by marketing, and that’s where this KPI belongs.
6. Product performance (especially when working with Rev Ops)
This KPI helps track the sales performance of individual products.
Why it’s important: First, the KPI helps companies identify the winners and the losers. It also allows investigating why a particular product is easier to sell.
Is it a lack of training? Does your incentive system make it more profitable to push a particular product? Or do salespeople push one product over the other because it’s easier to convert?
What to look out for: Creating a consistent model for comparing product performance is critical. Otherwise, Sales Ops may use this KPI to point the sales team to the wrong products.
There’s a myriad of factors that influence the sales of individual products. For instance, viral marketing campaigns can skew the results of a generally poor product. Or high-volume, low-priced products may be your top seller. Are they outperforming the high-ticket ones?
7. Customer acquisition cost (CAC)
The KPI tracks how much it costs to convert a new customer, on average. It’s a sum of all marketing and sales expenses divided by all customers acquired.
Why it’s important: CAC is a core KPI for every Sales Ops team. CAC is the second biggest startup killer, right behind poor market fit.
The KPI helps you understand if your sales campaigns are profitable and how far you are from breaking even. It’s also a key metric for optimizing their cost. And, if you look at industry averages, it gives you a benchmark of how well (or poorly) your company is performing (on average).
For example, the average organic and inorganic CAC was $205 and $341 for SaaS. While it may seem like a lot, it’s also a lot less than most other industries:
What to look out for: Don’t compare CAC with just the product price. Sometimes, you may still be profitable even if CAC is close to AOV (average order value). For example, this is the case if your CLV is higher than CAC and other costs.
Also, keep in mind that the data for this KPI likes to fluctuate and is different depending on industry and business. So it’s important to calculate it using long-term numbers.
8. Customer lifetime value
CLV tracks how much your business makes per customer for the total time they remain one, on average.
Why it’s important: With CAC, this metric helps you understand your profitability per customer. After all, the goal of each company is to maximize its CLV. As such, it’s one of the core KPIs used when aligning the work of Sales Ops and Rev Ops.
What to look out for: CLV is great if you want to look for ways to maximize revenue per customer. However, that’s more of a Rev Ops job. As a result, it’s only useful for sales when coupled with CAC or AOV.
Additionally, it’s not reliable in small customer bases, where a few outliers can skew the results.
9. Customer churn rate
This KPI tells you the percentage of customers you lose over a given period.
Why it’s important: A critical KPI for product marketing that Sales Ops can leverage. A high churn rate (especially if it’s happening early) can indicate a problem with sales.
For example, your salespeople might be overpromising just to get a conversion. If that’s the case, customers will ditch you as soon as they realize they’ve been tricked into making a purchase.
Moreover, increasing retention is one of the most effective ways of increasing profits. A 5% increase in retention can increase profits by 25% to 95%.
What to look out for: Unless your sales is also involved in customer retention, it’s better to focus your resources on other KPIs.
10. Lead-to-opportunity ratio
This KPI tracks the ratio of total leads to those that the sales team managed to qualify. Often, it looks at the leads the sales team received from marketing.
Why it’s important: The importance of this metric will depend on the roles of your Sales Ops team. For example, if your Sales Ops team helps qualify the leads for the sales team, it’ll help you track and understand Sales Ops performance.
Similarly, lead quality might be the problem if the KPI is far behind the set goal. In this case, it’s worth investigating if there’s a misalignment between marketing and sales.
What to look out for: If the tracked results are far from expected, it’s important to find the underlying problem before you start pointing fingers.
For example, it’s easy to blame marketing for poor lead quality. However, what if your sales team fails to qualify them?
11. Average lead response time
This KPI tracks the time from when the team receives the lead to the first contact.
Why it’s important: A quick response is often one of the key factors to closing a lead.
Data shows that, on average, contact rates significantly drop off after 5 minutes. Qualification rate drops 21x from 5 to 30 minutes:
Additionally, tracking this KPI helps you find ways to increase your team’s speed and efficiency. It’s also a great way of growing awareness of the importance of a prompt response.
What to look out for: Don’t just focus on tracking this KPI for the entire company. When it comes to response time, it’s worth looking at individual sales reps. Why?
Lead response time is often a very individual thing. As such, individual sales reps may have problems with it for different reasons. Looking at each sales rep might help find those reasons (as well as a solution to any problems).
How to track KPIs
Whichever KPI you choose, the good news is you don’t have to track them manually.
Today, marketing automation software allows you to automate data collection and cleanup. It can even automatically merge data if it’s coming from different sources.
Once the data flows in, you can create personalized dashboards. Such dashboards then let your team members view and focus on KPIs that matter the most to them.
Remember that you may need different KPI tracking tools to track those KPIs. Those may differ based on the KPIs that you choose.
Of course, picking a tool is just the first step. The key to successful sales operations KPI tracking automation is to:
- Pick metrics that your Sales Ops team needs. This requires that you take the team’s structure and roles into consideration.
- Ensure that the data you collect is secure.
- Create milestones so that your team is more motivated to keep improving.
- Look at the individual stages of each KPI to find any issues that could be driving numbers down.
A good KPI automation helps your team track critical KPIs with little effort. With data delivered right to a dashboard, your Sales Ops team can be even more efficient at improving critical areas.
Start tracking the right Sales Ops KPIs
Tracking Sales Ops KPIs helps your sales team grow and sell more. As a result, it helps it stay competitive and keep growing.
First, the data that you collect allows you to find issues in the sales process. It then enables your Sales Ops team to share valuable feedback with the field sales team.
Moreover, tracking certain KPIs is critical for creating your company’s sales strategy, which is one of the key roles of sales operations.
Once you set out to track Sales Ops KPIs, don’t forget to automate the process. And it’s not just sales operations tools that can help you do that.
For example, a marketing automation tool such as Encharge can help you manage and segment your audience. And as mentioned earlier, segmentation is key to tracking certain sales operations KPIs
Of course, there’s a whole lot more that Encharge can help your business withBook a free call with our consultant to learn how it can help you grow and automate your business.