17 sales KPIs to monitor in 2024 [+ formulas]

There is no entrepreneur who has not understood the importance of monitoring KPIs, the key performance indicators that are essential for a company’s growth.

In other articles we discovered different types of KPIs, from warehouse KPIs to social media KPIs.

In this article we will focus on the main sales KPIs, see what they are, why they are important and which ones to monitor in 2024.

What are sales KPIs

When we talk about sales KPIs we mean the commercial KPIs that analyse and evaluate the performance of a company's sales sector.

In other words, sales KPIs allow you to monitor the sales performance of a company, offering a comprehensive overview of its condition.

They are potentially infinite, also because they are not always so simple to identify. In some cases, these are metrics that affect sales only indirectly, and for this reason they could elude a less in-depth analysis.

We will analyse 17 of them, the ones we consider most useful to obtain a comprehensive overview of the condition of our sales department.

17 sales KPIs to monitor

KPIs in general, and sales KPIs, can be final, when they measure performance at the end of a process or period, or predictive, when they refer to the expected performance of a company.

The choice of which indicators to analyse depends on the objectives of the company. Here is a selection of the 17 sales KPIs to monitor in 2024.

1. Sales objectives
2. Percentage of qualified leads
3. Number of sales
4. Sales value
5. Number of products sold
6. Sales opportunity
7. Contract closing rate
8. Lead conversion time
9. Customer acquisition cost (CAC)
10. Customer lifetime value
11. Number of new customers acquired
12. Net Promoter Score (NPS)
13. Cart abandonment rate
14. Average rating from customer reviews
15. Rate of returns and/or refunds
16. Gross and net profit margin
17. Average turnover per customer

Let's analyse them in detail.

Sales objectives

Sales objectives, often used to structure sales objectives, should be listed among the predictive KPIs, and represent one of the most important performance indicators.

These are the numerical targets that a company aims to reach in a given period of time.

They can be expressed in different ways, for example as sales volumes, market shares or profit margin and can be established at an individual, team or company level, to evaluate the performance of the sales team and the effectiveness of the strategies that are being adopted.

There is no real formula for calculating it, but it is possible to establish more specific targets that the company must achieve daily to have more SMART (Specific, Measurable, Achievable, Relevant, Time based) objectives.

Once the objectives have been established, other interesting KPIs could be those related to sales skills, a macro indicator that measures the company's ability to sell its products or services. There are several KPIs to define it, let's see what they are.

Percentage of qualified leads

Qualified leads are those contacts who match the buyer persona and who have shown interest in a product or service. In short, they are potential customers who have shown interest in the product and provided useful information on their needs and requirements.

You can calculate the percentage of qualified leads with the following formula:

Qualified Leads Percentage = (Number of Qualified Leads / Total Number of Leads Generated) x 100

Knowing this value allows companies to concentrate resources and lead nurturing on the real potential customers.

Number of sales

It refers to the number of sales within a specific timeframe and can relate to a single sector, a specific product, a particular market, a commercial team and so on.

Among the sales KPIs it is perhaps the most obvious, but it should not be taken lightly. Having access to this information allows entrepreneurs to understand market trends, detecting variations (positive or negative) useful for better defining the sales strategy or improving the quality of the products.

It can be calculated as an absolute value, as a percentage of sales targets or as the company's historical average sales.

Sales value

It is an economic value given by the total monetary value of each product sold within a specific timeframe. For example, if a company has sold 50 products worth 10 euros each in one month, the value of the sales amounts to 500 euros.

This metric is useful to monitor the performance of the business using another fundamental KPI, namely the number of products sold.

Number of products sold

It is the total number of products sold within a specific timeframe and can relate to all the products or services offered by a company, or even to a particular product.

Having access to this information is useful to monitor the market trend of your products, to improve their quality, to define marketing strategies and to improve warehouse as well as inventory management.

It must not be confused with the number of sales but can be used in combination with it.

Sales opportunities

t is a sales KPI that provides insight into the sales team's ability to create new business opportunities.

Sales opportunities are the leads or projects that the sales team is actively pursuing and have the potential to generate revenue for the company.

Having access to this information is important to understand to what extent your team is able to identify and generate sales opportunities. It can also be used to calculate the conversion and closing rate of contracts.

Closing rate

Another useful KPI to define the sales capabilities of your team or company is that related to the contract closing rate, i.e., the percentage of closed contracts compared to the total sales opportunities.

Here is the formula:

Closing rate = (number of closed contracts / number of sales opportunities) x 100

Lead conversion time

In addition to the conversion rate, it is also very important to know the time it takes for a lead to become a real customer. Having access to this information allows marketers to understand if the strategies they are using are working or if they need to be revised in order to make faster conversions.

The formula to calculate it is the following:

Lead Conversion Time = date when lead is acquired - date when lead is converted to a customer

So far, we've seen sales KPIs related to set objectives, number of sales made, leads collected, conversions, as well as contract closing times and rates. But sales KPIs can also relate to customer acquisition and customer satisfaction. Let’s discover more about the user-related sales KPIs to take into consideration.

Customer acquisition cost (CAC)

It is the cost that the company incurs in marketing campaigns to acquire a new customer and is the ratio between the investment in marketing and communication and the number of customers acquired.

CAC = cost of marketing and communication / new customers acquired

The CAC must be evaluated in combination with other KPIs, such as the customer lifetime value (CLV), in order to understand if the marketing activities carried out by the company are efficient.

Customer Lifetime Value 

The CLV, namely the value produced by a customer, allows a company to understand the effectiveness of marketing and sales strategies.

It is a predictive KPI because it defines the expected value that a customer could generate for the company and is based on objective or statistical data. Depending on the customer's definition of value, there are various methods to calculate it. A general formula could be:

CLV = Average Customer Value x Customer Relationship Length

The average customer value is the value that a customer generates for the company during the entire period in which they remain a customer.

Number of new customers acquired

As with the calculation of the number of products sold or sales made, this sales KPI is also among the most obvious. To calculate it, simply apply the following formula:

Number of new customers acquired = total number of customers acquired in the period - number of existing customers in the period

If in one year a company has obtained 500 customers of which 300 were already present in the previous year, by applying the formula it is possible to trace the number of customers acquired during the current year (in this case 200).

Net Promoter Score (NPS)

Customer acquisition is not everything, and research has shown that the acquisition involves the use of resources and energies greater than those necessary for customer retention. But how to retain customers? By monitoring marketing KPIs and sales KPIs.

An example is the Net Promoter Score (NPS), which is used to measure customer satisfaction and loyalty, and is calculated by subtracting the percentage of detractors from the percentage of promoters of a brand, product, or service.

NPS differentiates between promoters and detractors by conducting a survey among customers of a brand to understand how likely they are to recommend the product on a scale of 0 to 10. Depending on the answers, you can identify detractors (from 0 to 6), passive (from 7 to 8) and promoters (from 9 to 10).

Here is the formula:

NPS = % promoters - % detractors

For example, if 60% of customers answered with a score between 9 and 10 and 20% between 0 and 6, the value of the Net Promoter Score is equal to 40 (60-20).

Cart Abandonment Rate

Cart abandonment is one of the biggest worries for entrepreneurs. To prevent this from happening, it is essential to be able to monitor this sales KPI. The formula is the following:

Cart Abandonment Rate = number of abandoned carts / number of created carts 

The cart abandonment rate is a very important indicator also in defining KPIs for ecommerce because it provides insight into the traffic trend on the website and the efficiency of the purchasing process from the point of view of the User Experience.

Average customer review rating

It measures overall customer satisfaction with a product or service through reviews posted on various channels.

As we said at the beginning of this article, there are some performance indicators that indirectly affect sales. Average review rating is one of them.

According to some statistics, 89% of consumers check online reviews before making a purchase.

Generally, customer reviews are expressed on a scale from 1 to 5 and the formula is the following:

Average Customer Review Rating = sum of rating value / total number of reviews

Return and/or Refund Rate

The return rate is the percentage of products purchased and then returned by customers and provides important insight into customer satisfaction, as well as the quality of the products.

The formula is:

Return Rate = number of products returned / number of products sold) x 100

Companies try to reduce their return rate by improving product descriptions and product quality based on customer feedback, but it is not possible to completely eliminate it. 

In fact, some customers simply change their mind, which is why ShippyPro has introduced features such as Easy Return to make all inevitable return operations easier.

We have seen different types of sales KPIs related to customer satisfaction, business objectives and the results of marketing and sales strategies. Now let's find out more about some sales KPIs related to finance.

Gross and Net Profit Margin

The profit margin is a financial KPI which can also be included among the sales KPIs, and is the difference between the revenues linked to the sales of the products and their production cost.

The cost of production can be roughly divided into fixed costs and variable costs.

Fixed costs are the expenses that the company has to face regardless of the volume of goods produced, such as premises rental, while variable costs are production costs.

The gross profit margin formula is the following:

Gross Profit Margin = (Revenue - Variable Costs) / Revenue x 100

Revenue is income from sales.

The net profit margin, on the other hand, is the percentage of profit obtained after paying the total costs (fixed and variable) and taxes.

Net Profit Margin = Net Profit / Revenue x 100

Average turnover per customer

The average turnover per customer measures the average amount of turnover that the company generates for each customer and should not be confused with the customer lifetime value.

In the first case, in fact, the sales KPI focuses on the amount of money customers spend on average within a specific timeframe. CLV, on the other hand, focuses on a customer's profitability over the entire duration of their relationship with the brand.

Here is the formula:

Average turnover per customer = total revenue / number of customers

The average turnover per customer is a great instrument to define the level that the company has reached in terms of sales. In short, it allows you to evaluate whether the company is making enough sales from their customers and if it is necessary to implement strategies to boost them.

Sales KPIs: conclusions

In this article we have provided an overview of what sales KPIs are and how they work. Being able to access and analyse these is useful to improve a company’s condition, by measuring progress, analysing, and comparing the metrics over time.

Analysing sales KPIs is essential to correct management errors and to evaluate new opportunities, technologies or strategies that can help drive the growth of your company.

FAQs

What are sales KPIs?

The main sales KPIs are:

1. Sales objectives
2. Percentage of qualified leads
3. Number of sales
4. Sales value
5. Number of products sold
6. Sales opportunities
7. Contract closing rate
8. Lead conversion time
9. Customer Acquisition Cost (CAC)
10. Customer Lifetime Value
11. Number of new customers acquired
12. Net Promoter Score (NPS)
13. Cart abandonment rate
14. Average rating of customer reviews
15. Return and/or refund rate
16. Gross and net profit margin
17. Average turnover per customer

What are the 4 main types of KPIs?

Among the main types of KPIs we can find:

1. Production KPIs
2. Sales KPIs
3. Financial KPIs
4. Management KPIs
5. Customer KPIs
6. Marketing KPIs

What are the main KPIs?

There is no hierarchical scale of KPIs that a company can monitor, it all depends on its specific needs and the goals it has set itself. Anyway, here is a list of the most commonly analysed KPIs:

1. Number of new customers acquired
2. Conversion rate
3. Customer Lifetime Value
4. Customer Acquisition Cost
5. Customer satisfaction rate
6. Net profit margin

What are commercial KPIs?

Commercial KPIs are indicators that analyse and evaluate the performance of a company's commercial sector, i.e., the sales sector. Here are some examples of commercial KPIs:

1. Number of sales
2. Sales value
3. Number of products sold
4. Sales opportunities
5. Contract closing rate