A startup is a newly created company that markets products or services through the use of information and communication technologies (ICT). They are businesses with innovative ideas that are supported by and have a strong relationship with new technologies.
And like any other business, they want to be successful in an increasingly competitive market, so it is important to focus on improving performance. To do this, an essential step is to measure the performance of your business to know if you need to make changes or if, on the contrary, your actions are working. To do this, there are hundreds of KPIs that you can use to monitor your business and observe the data of your strategies.
Don't miss this reading about the best sales KPIs for a startup.
First, what is a KPI?
KPIs, or Key Performance Indicators, are quantifiable and measurable metrics that are used to measure the performance of campaigns. Examples of these metrics would be: number of visits, revenue, cost per click, etc.
KPIs are measurable numbers, in real time, that provide you with a lot of information to make the best strategic decisions that allow you to improve and grow. But one thing you have to be clear, KPIs are metrics, but not all metrics are KPIs. KPIs are the most important metrics, so they are key indicators with which you can measure the performance of your business.
They are used to assess whether the actions you are taking are being carried out successfully and whether you are meeting the objectives you have previously set, whether you are on track or whether you need to make changes.
It is important that when setting the KPIs, they are related to the objectives you have previously set in your strategy, in order to correctly measure the results.
Sales KPIs for your startup
Sales KPIs are the metrics with which we measure the failure or success of the actions we carry out in this area. Here are some of the most commonly used and that you cannot miss if you have a startup:
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customer conversion rate
This metric indicates the conversion rate of leads to sales, i.e. how many of these leads or potential customers have made a sale in a given period. This KPI is also used to evaluate salespeople. If the result is not as expected, you should review and make changes. The formula is as follows:
Total sales made / Total leads acquired x 100
This indicator, like most KPIs, is calculated over a certain period, i.e. the conversion rate of the last quarter, for example, and multiplied by 100 so that the result is a percentage.
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average ticket
Total turnover / Total sales
This sales KPI indicates the average amount a customer spends on a purchase. Your conversion rate may be good, but a company with a lower conversion rate may have a higher turnover, meaning that the average spend is higher.
To increase the average ticket per customer and generate more revenue you can run campaigns such as discounts, combos with different products or special promotions.
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cost of acquisition per customer or CAC
The CAC refers to the number of leads that have been converted into customers thanks to the work of salespeople, so it represents the average cost of converting leads into customers.
Total investment in conversion / total new customers
The analysis of the acquisition cost per customer data is also qualified with two other KPIs: the average ticket, which we explained in the previous point, and the CLV or Customer Lifetime Value. The first measures the moment after the purchase, and the second the subsequent relationship.
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lifetime Value
As we mentioned earlier, this metric, which is Spanish for customer lifetime value (CLV), represents the total revenue expected from a customer, because each customer is different, as is the salesperson who serves them, so this metric indicates the amount of money a company expects to receive from a user.
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churn rate
This sales KPI is very important if your startup sells services that involve a periodicity. We show it to you because it is an interesting metric.
(Contracts at the beginning of a period - contracts at the end of a period) / Contracts at the beginning of a period x 100
This period can be monthly, quarterly, etc.
The data you see when you make this calculation will tell you if you are meeting your objectives or not, as it reflects your ability to keep your customers. If this rate is too high, it means you need to make changes because you are making losses.
This is just a short list of the most commonly used sales KPIs, but once you start your strategy within your startup, you will surely find others that are just as relevant. The important thing is that you do not forget to analyse your actions, because what you do not measure cannot be improved.
Moreover, thanks to these you will be able to make better decisions for the future, as you will have a more realistic and detailed idea of how your business works.
we hope you enjoyed reading this!
