If you work in sales or marketing or are starting a business and are learning how to grow the company, a term you may have come across often is KPIs.
KPIs are something that you will need to measure each quarter to be able to properly track the progress of your marketing and sales efforts.

However, if you are new to marketing and sales, the term can be confusing, even if you have been in sales for a while, the creation of KPIs can be overwhelming.
There are certain KPIs that matter more than others and provide much more useful information.
In this article, we will look at eight of the most important KPIs that your marketing or sales teams should be focusing on.
What Are Key Performance Indicators?
Key performance indicators or KPIs, are metrics of a business that should be tracked and measured in an effort to understand the effectiveness of the marketing and sales strategies that your teams are implementing.
KPIs can be configured to suit the individual needs of a business and individual teams. When you track and measure KPIs you gather data and information about their effect on your sales and marketing results.
This data can then be analyzed to help you understand which campaigns and strategies are working and producing results, and which are costing money unnecessarily.
With this information, you can then streamline your marketing and save money in the process. Below are eight of the most important KPIs that can help you get the most out of your marketing and sales efforts.
Cost Per Lead
Cost per lead is an incredibly useful KPI to measure. Essentially, cost per lead allows you to track the cost-effectiveness of your marketing strategies and campaigns in terms of generating new leads for the business.
When tracking a cost per lead, a dollar amount is designated to each lead that is generated by your campaign. Tracking cost per lead is particularly useful for online advertising campaigns that use tools such as AdWords or Google Ads.
tracking the cost per lead of such campaigns and tools helps you to analyze their effectiveness and assign budget allowances accordingly.
When tracking cost per lead as a KPI, it is important to remember that there are certain factors that identify a good CPL. if your cost per lead is low for individual leads but your campaign has generated an overall large number of leads, it is successful.
Customer Retention

Customer retention is another KPI that should be a high priority when you are trying to improve your marketing and sales. On average, it costs more money to engage new customers and clients than it does to retain existing customers.
Focusing on customer retention and attempting to streamline and finesse it will help to bolster your business’s overall reputation within the industry.
When you track your customer retention rates and analyze the data that you collect, you will also be able to improve your customer service process and the overall experience of your customers.
In turn, this can help improve your business by improving the word of mouth that spreads from your existing customers.
One of the most important aspects of customer retention information that should be analyzed in depth is the point at which repeat custom is being lost during the pre- and post-sales process.
Once you have been able to identify when and why you are losing repeat custom, you can make adjustments to fix the problem.
Cost Per Customer Acquisition
Cost per customer acquisition is the cost required to complete each step in the process of convincing potential customers to close a sale.
Not only does this include the cost of the product or service itself, but also it includes behind-the-scenes costs that are much less visible. These can include cost aspects such as storage, distribution, and research and marketing.
Once you are able to establish how much acquiring a new customer is costing you per sale and where those numbers are coming from, you will be able to reevaluate the processes that you use and find ways to streamline the process and make it more efficient and cost-effective.
Tracking the cost per customer acquisition allows you to adjust your budget and your methods and processes accordingly.
If your budget is low, you may want to shift the priorities of your business to focus more on customer retention and rely a little more on word of mouth to help secure new business.
Marketing Qualified Leads
In short, a marketing qualified lead is a lead that is ready to be given directly to your sales department for outreach.
There are many different ways in which you can identify a lead that is qualified for your business, including through website behaviors, form submissions, and many other factors.
By identifying qualified leads, you will be able to track the parts of the process that lead to the contact being ready for sales. Once you have identified these parts, you will be able to focus on the effective steps in the marketing and sales process of your business.
Being able to focus on the effective aspects of the marketing and sales process allows you to improve them further. It also means that you have a clearer understanding of the aspects of the process that are less effective.
These aspects can then be re-evaluated or even removed if they are deemed unnecessary.
Sales Qualified Leads
Sales qualified leads refer to the number of potential customers who become a legitimate sales opportunity. This is different from marketing qualified leads.
With this KPI, you can track the rate of leads that are being converted to sales by your team. With this information, you can analyze which aspects of your lead generation and sales pipeline are strong and effective, and which aspects are weaker and cost you money.
Not only does this KPI allow you to identify the good and bad aspects of your sales process, but it also helps you to understand how effective your sales team is able to be with the resources that they are currently afforded.
This data can then help you to improve the resources of your sales team if necessary and streamline the process where there are unnecessary steps.
Marketing ROI

ROI or return on investment is a KPI that allows you to track how much revenue is being generated by each individual marketing campaign that you are running when directly compared to the cost of running the marketing campaign.
For some businesses, marketing ROI is considered to be one of the most important metrics by which to measure marketing and sales performance.
Tracking this KPI can be done with a very simple formula or via tracking apps or platforms that are specifically designed to track marketing ROI.
To manually track your ROI for marketing simply take the number of leads that your campaign is generating and divide it by the opportunity value, alternatively take the average value per win divided by the average lead to win ratio.
Although ROI is an important metric to measure, it isn’t always the easiest or the most reliable way to measure the performance of your marketing campaigns.
Marketing ROI is not always possible to track when, for example, a lead views an advert but does not click on it, then accesses your website at a later date. This is because there will be no direct, traceable link between the advert and the site visit.
Sales Revenue
Sales revenue is a simple KPI to track that measures how your business is making progress with generating revenue directly from sales. Sales revenue can also help you to predict growth and trends of your business using a few simple data points.
Sales revenue works to both measure the overall growth of your business and to help set personalized goals for individual team members. You can also track tangible growth and success within the business with this metric.
Opportunity-To-Win Ratio
The opportunity-to-win ratio provides businesses with a value that is easy to understand for all team members at all levels of the business. This number determines the rate of success your business has with converting qualified leads into closed sales.
This information can be used to help members of your sales team to improve in the areas that they are weakest and also acknowledge the areas they are strongest.
When you identify team members that are strong at sourcing qualified leads but struggle with closing the sale, you can offer support to them to help them increase their rate of closing sales.
Similarly, you can identify team members that can close any sale but struggle to source leads and create opportunities, and offer them support that they might need. Opportunity-to-win ratio can also help to inform future training for the team as a whole.
Final Thoughts
Measuring the right KPIs is incredibly beneficial when you are trying to grow your business through marketing and sales.
When you gather information from the KPIs mentioned above, you can gain a deeper understanding of the inner workings of your business and fix areas that are struggling or holding you back.
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