10 Sales KPIs You Should Be Tracking for Pipeline Performance
Understanding how your sales pipeline is performing is key to everything for sales leaders. Without being able to see what is happening and why – you can’t accurately forecast, predict revenue for the period, or, fundamentally, know if your sales process works. However, getting a strong grip on what shows progress can be extremely difficult, and a lack of visibility into performance can mean that you are unsure what decisions are the correct ones. Thankfully, we have a solution for you – below are 10 of the top sales KPIs that you should be keeping a close eye on to understand your pipeline success (or failure).
1. Win Rate
Win rate is probably the most important pipeline sales KPIs to track, as it gives you a holistic view of how your pipeline is performing and if you are, actually, closing deals. It is the key metric for success and should be used as your measure to gain an overview of pipeline performance. If your win rate is low then your team isn’t closing deals, meaning action needs to be taken. Equally, if there is a downward trend in your weekly rate then it could be a signal of a larger issue. Reviewing where your customers are dropping out of the sales process can help you to identify roadblocks in your pipeline and how to improve them.
2. Sales Cycle
Understanding how long a prospect takes to move through your entire customer journey enables you to more effectively forecast deal closure dates and predict when revenue. If you have a long sales cycle (longer than 30 days) it can make monthly predictions difficult and reduce revenue expectations across the period. However, the power of tracking your sales cycle length provides insight into where changes can be made to optimize the process and potentially reduce the time prospects spend moving through the journey.
3. Average Deal Value
Tracking the value of your average deal gives you a solid foundation to predict revenue within a given period and where you are sitting against quota. Deal value averages tend to be based around the type of company or business the prospect is and how closely they fit with your ICPs. You can use the insight into your average values to optimize the velocity of your sales pipeline by highlighting where your most profitable deals are coming from enabling you to develop new or tweak strategies or processes to increase performance.
4. Number of Opportunities (Pipeline Coverage)
By opportunities we mean SQLs, it is important to know how many leads you have within your pipeline as it gives you a working awareness of the potential of your pipeline; giving you a grounding for your forecast projections. Furthermore, as a KPI, the number of opportunities that are in your pipeline indicates how successful your marketing and sales strategies are. By measuring where each of your opportunities is in the sales process and how long they have stayed there, you can evaluate the effectiveness of your sales teams and understanding how many deals your teams can process within a given time frame.
5. Sales Pipeline Velocity (Number of opportunities x Win Rate x Average Deal Value ÷ Current Sales Cycle)
This is a cumulative metric that effectively builds on the data from the last four. Pipeline velocity gives you the insight you need to understand how quickly your prospects are moving through the pipeline and completing their journey. By combining the above metrics you are able to identify where in your pipeline there are choke points that slow down or break the flow and thus reduce your likelihood of hitting quota. Your Sales Pipeline Velocity is your master metric for your pipeline health, giving you insight into where and how it is performing.
6. Drop-Off By Deal Stage
Building awareness of what is going well with your pipeline is only half of the story, as a sales leader you need to not just know where things are performing well but also what is slowing growth or reducing effectiveness. Assessing your pipeline by where your prospects drop out (either don’t buy or stop engaging with your team) starts to build a picture of where your roadblocks are. Not only this but if you segment the drop off based on what stage the prospect is at you can more effectively identify the exact reason for the drop-off.
7. Conversion Rates Through Stages
Tracking conversion rates through your deal stages is effectively the opposite of deal drop-off. However, both of these sales KPIs work in tandem to give you a clearer insight into what is and isn’t working within the sales process. By analyzing how well each stage converts and where or how in the stage they drop off you can gain insight into performance issues such as:
- If sales reps need additional coaching,
- If marketing collateral isn’t compelling enough,
- If the proposition isn’t effective,
- If the sales strategy isn’t working.
Building relationships with stakeholders and advocates within your target accounts is key to driving a deal forward without it you will struggle to gain traction. This is a well know fact of B2B sales, but relationships aren’t a metric that is tracked by sales leaders. By taking the number of relationships your team has successfully cultivated within an account, you can benchmark the amount needed to successfully convert accounts. Helping your team to focus on building into prospective companies as well as targeting the right people within to continuously drive the deal forward.
At Ebsta, we place a lot of emphasis on tracking engagement as a sales KPI. Engagement tracks the response and interaction rates that your prospects have with your outreach material or activities. Without tracking engagement you cannot effectively understand if your collateral or sales activities are actually contributing to or pushing your potential customer forward in the journey.
Additionally, by tracking engagement you can identify accounts that are at risk of being lost quicker. Without engagement, the only way to track how well your sales team is interacting with prospective customers is based on their levels of activity, which only gives you a subjective viewpoint.
10. Level of Activity
As we just mentioned, levels of activity are generally tracked as part of the engagement KPI. This means that you are only tracking one side of the activity story, just because reps are emailing or calling prospects on a daily basis does not mean that they are getting any response or engagement from the other side. This said, tracking levels of activity on an individual rep basis gives you insight into their performance and how other rep’s processes could be optimized. If you can see that one rep can push a deal to close with a set number of activities (combination of calls, emails and meetings) you can use that as a template to help coach and train your other reps, increasing overall team productivity.
Activity is still an important sales KPI, but not for engagement with your customers.
Within the above sales KPIs, you can more effectively track how your pipeline is performing and identify where there are opportunities for improvement. More importantly, you can build a clearer plan of how your pipeline can grow and ensure that you can achieve your quotas.
If you want a quick start in getting these KPIs up and running, check out our Intelligence Platform which can get you the insight you need in just 30 seconds.