KPIs for Sales [it’s not what you think]

I speak to a lot of founders every day.

And there’s one thing that’s common across all of them.

They are all measuring the wrong KPIs for their Sales team.

Which in turn impacts their sales team performance significantly.

Are they completely off?
No.

But are they measuring all the right lead and lag indicators to ensure their sales team succeeds long-term?
They’re not.

Setting the right KPIs for sales is critical fo consistent growth.

It’s not just about how much money sales “bank” (this is a recipe for mid to long-term disaster).

It’s a lot more than that.

You need to drive the right mix of sales KPIs that will:

• Encourage the right short-term behaviour (closing deals)
• Ensure the right long-term behaviour (minimising churn & maximising LTV)
• Promote cross-team collaboration (working with retention & marketing teams)

Do this, and your sales will hit a consistent rhythm & more importantly – you’re customers will rave about you too.

Before we jump into the KPIs…

Here are 2 core principles you need to know – 

1/ Use monthly revenue as a primary KPI for your sales team.

Use monthly MRR as the primary goal for success – not total contract value.

Whether we like it or not, agencies run a MoM operation – where monthly EBITDA, profits matter a lot.

If you use contract value, you’re assuming the client will stick around. But some clients will always pull out of contracts earlier than you think.

Here’s a scenario –

The client signs up for a 6-month contract.

• It’s worth $5k/month or $30k contract value.
• You hire extra people, crank marketing investment based on this $30k hitting the bank.
• After 3 months, the client needs to pull out.
• You’ve only received $15k from them.
• You hit panic mode (and have to cull costs, fire staff, etc)

Being deep in the red sucks.

Instead, if you focus on MRR, you can see how it fluctuates monthly.

New MRR added vs. MRR lost through client churn.

And adjust your spending accordingly.

Which in turn leads to better profitability.

(The same applies to once-off revenue & project – treat these as cream on top).

2/ Sales is not just about selling.

Your retention efforts start with the sales team.

Spend time to qualify out bad fit prospects (don’t just sign anyone!)

Why?

Bad-fit clients are a drain on resources, morale, and are just not worth it.

They’ll be 3x less profitable than other clients.

And you’ll lose a lot of good employees, and create a lot of bad worth of mouth, because of it.

So instead:

• Qualify out bad fit prospects furiously (point them to someone who can help)
• Focus on client onboarding experience – sales to customer success hand-off is critical (don’t make the customer repeat themselves). 
• Apply commissions clawbacks to the sales team for any deals that churn prematurely (controversial, but necessary for long-term growth)

And with that said –

Here are all the KPIs I recommend using for your sales team.

Sales Team KPIs

Primary Sales KPIs

• $ value of deals won per month (MRR)
• $ value of pipeline generated per month (MRR)
• % of deals won from marketing vs non-marketing lead sources (aim to have this 50/50)

Secondary Sales KPIs:

• Contact all marketing-generated leads (MQLs) are contacted within 10 minutes
• Follow up all MQLs, post initial contact, at least every 3 days (till qualified in/out)
• Follow up all “open” deals are followed up every 7 days (till qualified in/out)
• 0% of deals won churn within 3 months

Notice this –

It’s not just about winning deals.

It’s a mix of winning deals, generating pipeline consistently, avoiding churn & collaborating with marketing for success.

Building a high-performance sales team is never just about selling, it’s a lot more.