Sales KPIs and reports that drive action

A KPI only helps if you act on it. Revenue matters, but you cannot steer on it on a Monday morning. It is the result of ten other things that happened earlier. So a good sales KPI meets three tests.

You can influence it. The team can do something that moves the number. Lead response time can improve this week. Market growth cannot.

It is unambiguous. Everyone calculates it the same way. Does a deal reopened after three months count as new? Does cycle time start at the lead or at the deal? Does a deal count in the quarter it was created or the quarter it closed? Until that is written down, everyone talks about a different number.

It comes with an action. If win rate drops at the proposal stage, what do you do? If you do not know, the number belongs on a dashboard for later, not in your weekly meeting.

It also helps to separate leading and lagging numbers. Lagging numbers such as won revenue and win rate tell you how it went. Leading numbers such as new pipeline, pipeline coverage and response time tell you how it is going. A manager who only watches lagging numbers sees a bad quarter once it is over. A good set has both.

Every worked example in this guide uses made-up numbers to show the math. They are not norms or benchmarks. A good win rate or cycle length depends on your market, your deal size and your lead source. Your own history is the only comparison that counts.

Before you build a single chart, write a short definition for each KPI. Use the same eight lines every time. It feels like paperwork, but it saves you a monthly debate about which number is right.

• Name: what the number is called in every meeting, always the same
• Formula: the calculation, in words
• What counts: which deals, pipelines, sources or stages, and what is explicitly left out
• Period: week, month, quarter or a rolling window such as 90 days
• Date field: the date you filter on, such as created date, close date or expected close date
• Target and how you set it: the number, and whether it comes from your history or is worked back from the revenue goal
• Owner: who watches the number and explains it in the meeting
• Action when it drops: what you actually do, and from which threshold

Below are ten sales KPIs written out in this template. Copy them, adjust them to your own pipeline and pick eight at most for your standing dashboard.

1. Win rate * Formula: won deals divided by won plus lost deals * What counts: closed deals only, never open ones. Deals deleted as spam or duplicates do not count as lost * Period and date: quarter and rolling 90 days, on close date * Target: your own average over the last four quarters as a floor * Owner: sales manager * When it drops: split it by source and by the stage where deals are lost. Example: 18 won and 42 lost is 18 divided by 60, so 30 percent

2. Average and median deal size * Formula: total value of won deals divided by their number, plus the middle value when you sort them * What counts: won deals, with a fixed rule for recurring revenue * Period and date: quarter, on close date * Target: not a number to chase, but a signal * When it shifts: if the average sits far above the median, a few large deals are pulling it up. Plan on the median

3. Cycle length per stage * Formula: average or median days that won deals spent in each stage, plus the total from creation to won * What counts: won deals, and lost deals separately, since those often run longer * Period and date: quarter, on close date * Target: a maximum per stage, for example no more than 14 days in the proposal stage * When it grows: see which stage grows. A long proposal stage needs a different fix than a long discovery stage. See also pipeline stages that work

4. Pipeline coverage * Formula: value of open deals with an expected close date in the period, divided by the target still to be won * What counts: open deals in the sales pipeline, excluding deals already past their close date * Period and date: current quarter, on expected close date * Target: 1 divided by your win rate as a rule of thumb. At a 25 percent win rate you need about 4 times coverage * When it drops: build pipeline first, close second. Coverage below the line in week 2 of a quarter is a problem you can still fix

5. New pipeline created * Formula: number and value of deals created in the period * What counts: qualified deals, broken down by source * Period and date: week and month, on created date * Target: worked back from the revenue goal, see the example below * Owner: sales manager, together with marketing for inbound sources * When it drops: look per source. Has one channel dried up, or is the team spending less time on prospecting?

6. Stage conversion * Formula: deals that moved from stage A to a later stage, divided by all deals that left stage A in the period * What counts: moved on plus lost from that stage. Deals still sitting in the stage are left out * Period and date: quarter, on the date the deal left the stage * Target: your own history per stage * When it drops: this is the number that tells you where the pipeline leaks. If only the conversion after the demo drops, you review demos, not lead quality

7. Lead response time * Formula: median time between a lead coming in and the first logged contact * What counts: inbound leads from forms, chat and ads * Period and date: week, on the lead’s created date * Target: an agreed maximum, for example within four business hours * When it grows: look at routing and availability, not motivation. More in how to follow up leads fast

8. Lost reason share * Formula: lost deals with reason X divided by all lost deals, plus the share of lost deals without a reason * What counts: all lost deals, broken down by stage * Period and date: quarter, on close date * Target: lost without a reason is always zero * When a reason grows: price as a reason in the first stage says something about your target market. Price as a reason after the proposal says something about your proposal

9. Sales velocity * Formula: open deals times win rate times average deal size, divided by cycle length in days * What counts: open deals in one pipeline, with win rate and cycle length from the same period * Period: calculated monthly * When it drops: see which of the four inputs moved. Example: 40 deals times 0.3 times $10,000 divided by 60 days is $2,000 a day. The number itself says little. Its movement does

10. Forecast accuracy * Formula: actual won revenue minus the forecast at the start of the period, divided by the forecast * What counts: the forecast as it stood on day one of the month or quarter * Period: month and quarter * Target: a deviation within a band you agree on together * When it is off: example: forecast $100,000, won $85,000, a deviation of minus 15 percent. Look at which deals slipped and why. More in how to build a sales forecast

Reports get used when they belong to a fixed moment. Agree per meeting which reports are on the table, and keep the list short.

Weekly sales meeting, 30 minutes. Leading numbers and actual deals. New pipeline this week against the target, lead response time, deals that have sat in a stage longer than the maximum, and deals with a close date in the next two weeks. Every deal you discuss ends with a next step and a date.

Monthly, 60 minutes. Trends and conversion. Stage conversion, cycle length per stage, lost reason share and pipeline coverage for the rest of the quarter. This is where you look for the pattern behind the single deals of the past weeks. Last month’s forecast accuracy belongs here too.

Quarterly, half a day. Outcomes and targets. Win rate, median deal size, sales velocity, won revenue against target and forecast accuracy over the quarter. This is also where you work next quarter’s targets back again, and remove reports nobody opened.

Use the same dashboard in every meeting that the manager uses day to day. As soon as the team builds its own spreadsheet export, you have two versions of the truth and you end up debating numbers instead of deals.

Counting activities as a goal. Fifty calls a day is a means. Make it a target and you get fifty short calls. Use activities to understand why a number moves, not as a KPI by itself.

Reading a weighted forecast as a promise. The weighted value of a pipeline is deal value times the win probability of the stage. It is an average across many deals, not a prediction per deal. Use it next to the rep’s own judgement.

Lumping recurring revenue together. A deal worth $1,000 a month and a one-off deal of $12,000 count the same in one report and differently in another. Agree whether you count annual value, first period or contract value, and use it in every report.

Team averages. An average win rate of 30 percent can be one person at 50 and another at 10. Look per person, but discuss it one on one.

Data that cannot carry the number. A lost reason typed as free text, close dates that never get updated, deals marked won weeks late. Then you measure how well the team does admin, not how well it sells. Read how to keep CRM data clean before you tie targets to numbers.

Quietly changing the definition. If you change what counts halfway through the year, you compare apples with oranges. Record the change with a date and recalculate the past, or start a new series.