How Are KPIs Essential in Measuring Performance

A Key Performance Indicator (KPI) is a measurable value that shows progress in reaching an organization’s goals. It measures the overall performance of the organization against the set targets. They help define the strategy and clear focus. 

They enable one to understand the business performance and make critical adjustments in execution to achieve the strategic goals. They are essential to monitor the company’s health, measure progress over time, make adjustments, stay on track, and solve and tackle opportunities.

What Are the Sales KPIs That You Need to Track

The sales KPIs are metrics that are essential in business to track and determine the effectiveness of the business’s sales efforts. Some of these may include customer satisfaction, competitor pricing, sale volume, etc.

Target Completion

Target completion is a metric that measures the number of people that complete a specific goal. The target completion metric compares the current sales with the target set. Being directly linked to revenue, it is an integral part of measuring the business’s success. It also helps to keep track of whether the set goals are met. 

Average Sale Cycle Length

Average sale cycle length is the total number of days or months it takes on an average to close a deal. It can also be defined as the average time it takes to convert prospective customers to won customers. To calculate your sales length cycle, you have to add up the total number of days it took to close every sale, then divide that sum by the total number of deals. This number helps introduce predictability in sales forecasting. 

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Conversion Rate

The conversion rate helps understand how the company’s sales sector is performing and which stage and activities have the maximum return on investment. In the case of an e-commerce site, the conversion rate can be found out by dividing the number of conversions by the total number of visitors on the site.

Sales Revenue 

Sales revenue is a KPI that calculates the income received by a company from the sales of its goods and services. The sales revenue can be listed on the income statement as profit or either net revenue. It can be calculated by multiplying the number of products or services sold by the price per unit. 

Other factors

Several other factors affect the sales of a product and win more potential customers. Elements like relationship building, successfully onboarding partners, and managing promotional events are essential to driving sales. These factors are critical to building customer-buyer trust.

What Are the Marketing KPIs That You Need to Track

Marketing KPIs are specific marketing metrics that organizations track to measure the progress towards the company’s defined goals within the marketing channels. Some of the marketing KPIs that need to be directed are sales revenue, leads, cost per acquisition, etc.

Marketing KPIs Related to Profitability

The marketing KPIs that affect the firm’s profitability are cost per lead, cost of customer acquisition, etc.

Cost per lead

The cost per lead KPI measures how cost-effective the marketing campaigns are when generating new leads for the sales teams. This KPI is associated with other business KPIs, such as the cost to acquire new customers. The purpose of this KPI is to provide the marketing team with an actual figure on how much money can be spent on developing new leads. 

Cost of Customer acquisition

Cost of customer acquisition is a KPI that measures the cost to convince a prospective customer to buy the company’s products or services. Cost of customer acquisition is the total amount spent on sales and marketing of a product or service in a month divided by the total number of new customers acquired in that month. This figure helps in setting goals on the number of new customers that the company targets to achieve. 

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Marketing KPIs Related to Revenue

The marketing KPIs that affect the firm’s revenue are customer lifetime value, net customer worth, sales closing ratio, etc. 

Customer Lifetime Value

Customer lifetime value is the net worth of customers. In other words, it is the value that the customer adds to the business over a long period of time. This can be calculated by using the metric in the software system. This KPI is vital for the growth and reputation of the company.

Average Order Value

Average order value is a KPI that measures the average amount of money each customer spends per transaction. It can be calculated by dividing the total revenue by the total number of orders. This helps in evaluating the overall marketing efforts and pricing strategy.

Customer Completion Churn rate

Churn rate KPIs help keep track of the number of customers that left a product or service over a given period. It can be calculated by dividing the number of lost customers over a given period by the total number of customers at the start of that period. It helps the organization to add value to the product by understanding the reasons for which the customer left.

Marketing KPIs Related to Other Factors

There are several other factors that indirectly contribute to an increase in revenue. These include communication, feedback, etc. 


Communication is a vital factor as it allows to converse with the target audience effectively. Good and effective communication helps move a product from manufacturers to customers. It also helps in building and maintaining good relationships with customers and other stakeholders in the company. It is important because it brings everyone on the same page.

Organizational Needs

In some instances, the KPIs need to be modified to fit the organization’s needs. It should be aligned according to the organization’s critical success factors. For example, if an organization is going through digitization, specific KPIs like the usage metric, customer experience, participation level, etc would be tracked.

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