The importance of sales and commission KPIs for your business
How is your company’s sales team at this very moment?
As a leader, analyzing and measuring the performance of your employees is vital to your success.
By measuring the main sales KPIs, you can improve your sales process and ensure that you and your team continue to work on activities that will bring you the most results.
So, what are the main KPIs that you must follow in order to be more successful?
This is a very important question.
What you keep on the radar is what your team will focus on at that moment. Make sure your employees focus on the most effective sales activities.
Key performance indicators, or KPIs, are indicators that help sales representatives and their leaders to assess the effectiveness of their efforts.
The best way for salespeople to gain visibility into their team’s activities is to collect and measure the performance of these employees and the product through KPIs, which are Key Performance Indicators.
They are metrics used to track the performance of a company, sector or individuals in relation to its goals.
The key is to choose the KPIs most relevant to your industry’s goals. Choosing the wrong indicators can be very costly for your company.
To optimize your time, we have created a list of the 5 main KPIs that are used in the market.
We believe that these are the most important for managing sales teams.
Top 5 Sales KPIs:
1) Increased Sales
Is your business growing day by day?
The growth of your company is often linked to increased sales, that is a fact. It would be a mistake not to start with this KPI.
Sales growth over a period of time means that you are on the right track to growing your business.
It is important to have sales panels to visually monitor the performance of your sales representatives.
2) Sales Goals
This metric lets you know if your team is doing what it should, if it needs help, or if the entire strategy should be changed or adjusted.
It is crucial to forecasting and lets you know if other factors can affect your results.
Are you on track with your sales goals?
3) CAC – Customer Acquisition Cost
How much does it cost for your company to bring in a new customer?
It may seem basic, but for many companies this value is unknown. When we refer to CAC, we are analyzing all the costs involved for your company to place one more customer in its base.
It is necessary to always seek to increase the return that this customer leaves over time, so that you can decrease this acquisition value and keep your business profitable.
4) Sales Process Duration
Be honest with yourself. What would be the impact for your business having more sales being made in a shorter period of time?
The first step is to analyze your current sales process, the second is to look for points of improvement where you can optimize this cycle.
5) Sales Conversion Rate
When your sales process is working properly and people are reaching for your product, some buy it and some don’t.
This is perfectly normal in any business. Your mission here is to make the largest number of people who have had contact with your offer, buy from you.
By analyzing the metrics of this process, you can see how many potential customers you need to find to keep your business healthy, with the number of sales aligned with your goals.
Why are sales commissions so important to your company?
When you have sales commissions for your team, the environment becomes much more lively and exciting.
Even more for small businesses that are constantly growing.
There are many ways to compensate your team, either by salary or salary + commission.
Traditionally, direct commission work brings better pay to the seller, as they have control over their income.
The general commission-based sales environment also brings real benefits to the business owner.
A sales commission is an additional compensation the employee receives for meeting and exceeding the minimum sales limit.
The employer pays a commission to encourage its employees to sell more and also to recognize people with more productive performance.
The sales commission has proven to be an effective way to compensate sellers and bring in more sales of the product or service.
Why pay sales people a base salary?
This question is very pertinent, especially when you already offer good commissions.
Generally, salespeople receive a base salary in addition to their commissions for sales generated.
Salary recognizes the fact that a salesperson’s time is not all spent on direct sales. You have other aspects of the job that you need to pay your sales team to do.
These activities can be linked to the insertion of data in sales or tracking systems, the registration of customers to share with the company and also contacts with potential customers at events and fairs in the sector.
They can also include monitoring customers in the use of their products and services, as well as seeking points for improvement.
As you can see, salespeople’s tasks require compensation in addition to just a sales commission, as it happens in many cases.
While some highly paid salespeople may perform these related tasks as part of the job, their average salesperson needs a base salary to survive.
Final considerations for sales and commission KPIs
It’s known that most modern sales teams are presenting their KPIs on an interactive panel.
This provides visibility and transparency for everyone involved in the process and increases sales productivity.
This is because the data is added and analyzed in real time, motivating your salespeople to reach their goals.
If you want to save time, improve your business processes and impress your target audience, use the Sales KPI and Commission Tracker Template made in Excel.
About the Sales KPI and Commission Tracker Template
The Sales KPI and Commission Tracker Template is an advanced Excel spreadsheet template designed to help business owners and managers track the most important sales figures and set sales goals.
With this model, you can easily view sales data to understand sales trends and performance.
The Sales KPI and Commission Tracker Template contains 4 dashboards and 14 reports ready to use. You can also create custom reports using the PivotTable.
- Interactive and dynamic dashboard that summarizes sales performance indicators on a single page.
- Friendly, flexible and aesthetic sales and commission reports.
- View sales results by customer, product, sales manager, and salesperson.
- Automate tasks to reduce errors, save time and increase efficiency.
- Clearly view results with easy-to-interpret graphs and tables.
- Track your team’s performance.