Key performance indicators (KPIs) are a cornerstone of sales enablement. For one, they support continuous improvement, empowering your team with the knowledge and insights required to consistently find new ways to optimize the sales process. They also make it far easier to track and measure the overall effectiveness of your program — something which is crucial for demonstrating a return on investment.
But what KPIs should you monitor? How can you ensure you’re contextualizing everything properly? And what is a KPI, exactly?
Sales Enablement Metrics vs. KPIs
Metrics are frequently treated as being interchangeable with KPIs. But while every KPI is a metric, not every metric can be a KPI. The difference is a matter of context.
A metric is a general measurement of some aspect of a business over a specific timeframe, such as customer purchase habits, market trends, or revenue. They may provide insights about anything from marketing to internal productivity. Typically, they focus on a single business process or project.
KPIs are a bit higher level. They’re intended to measure progress towards long-term business goals. A KPI may also encompass more than one metric.
Why KPIs are Essential in Sales Enablement
Imagine you’re driving to an important meeting, but you aren’t familiar with the venue. Instead of relying on a GPS to get there, you decide to play things by ear. You have a general idea of the venue’s location in the city, so that should be enough, right?
Trying to maintain a sales enablement strategy without KPIs is like driving without a GPS. Sure, you might eventually arrive at your destination. But you’re wasting a ton of time and money in the meantime, with no way of knowing if you’re even going in the right direction.
How to Measure Sales Enablement Success: 15 Key Metrics
There are many different metrics and KPIs your company might measure to assess its sales enablement program. We’ve listed a few of the most important below.
Lead-to-Conversion
Widely regarded as the golden KPI for sales enablement, lead-to-conversion — also known as lead-to-customer conversion – gives you hard data on how many of your prospects become paying customers. It can usually be tracked via CRM analytics.
A high conversion rate typically means your sales process is working as intended. A low conversion rate could signify one or more of the following problems:
- You aren’t targeting the right prospects and instead are going after less engaged leads.
- There are issues with your onboarding process.
- Your sales team’s tactics are ineffective at closing deals.
- Your software is improperly priced.
- Your company’s branding is inconsistent or makes a poor first impression.
Customer Acquisition Cost
Customer Acquisition Cost (CAC) helps you track how much it costs, on average, for your company to acquire a new customer. Generally, you want to keep this KPI as low as possible. Reduced CAC is a common sales enablement objective, as increasing productivity and efficiency can greatly reduce a sales team’s overhead.
Generally, the best way to calculate CAC involves dividing your sales and marketing expenses over a specific timeframe by the number of new customers acquired within that time frame. That said, you can also calculate the acquisition cost of individual customers by assessing the specific employees and assets with which that customer interacted — so rather than your entire advertising budget, you’d assess the cost of the individual ad with which a customer interacted.
Customer Lifetime Value
Another relatively straightforward KPI, Customer Lifetime Value (LTV), determines the total revenue generated through a customer’s relationship with your company. To calculate LTV for a software company, you’ll first need to know how long an average customer remains a paying subscriber. From there, simply multiply that by the cost of your subscription or license.
Retention, Churn, and Growth
Retention and churn are two sides of the same coin, both expressed as a percentage. The former measures how many active users remain subscribed over a specific timeframe. The latter tracks how many customers cancel or choose not to renew their subscriptions.
To calculate retention, divide the number of recurring subscribers at the end of a timeframe by the number of recurring subscribers at the beginning of that timeframe. To calculate churn, divide the number of recurring subscribers lost at the end of a timeframe by the total subscribers at the beginning of that timeframe.
Retention and churn are also closely related to growth rate, which measures how many new customers your company acquired over a given timeframe. It’s calculated the same way as the other two KPIs. Note also that retention, churn, and growth can be applied to revenue instead of subscribers.
Sales Productivity
Sales productivity is exactly what it sounds like — it measures the efficiency and productivity levels of your sales operations. The specific data points that go into this KPI depend on your sales process. They may include, but are not limited to:
- Daily sales calls, messages, or emails.
- Time spent on each sales opportunity.
- Average revenue per customer, service, or agent.
- Revenue or customer growth in a specific market or region.
- Churn/retention.
Sales productivity cannot exist in a vacuum. An agent who makes ten sales calls per day might seem more productive than an agent who only makes one. But what if the latter agent closes four deals per month while the former only closes one?
Average Purchase Value
Average purchase value is exactly what it sounds like — it measures how much revenue your business generates from an average sale. In the context of software, this could also help you gain a better understanding of the type of customer your sales team most commonly brings in. Large businesses, for example, will typically purchase higher tiers or more licenses/seats.
Sales Cycle Length
Another measure of your sales team’s efficiency, sales cycle length measures how long it takes for a customer to traverse your entire sales funnel. While this can be measured in a number of different ways, the most common is by number of days. As a KPI, sales cycle length is closely tied to conversion rate — a higher conversion rate often corresponds to a shorter sales cycle.
Win-Loss Rate
Win rate and loss rate measure sales opportunities that are successful and unsuccessful, respectively. Calculated by dividing the number of won or lost opportunities by the total number of opportunities, the two KPIs allow you to directly measure the effectiveness of your team — or individual members of your team — at closing deals. These metrics can also be leveraged to determine how well your sales team performs against teams from competing organizations.
Measuring competitive win/loss rate requires knowledge of which specific sales opportunities pitted your business against direct competitors.
Customer Satisfaction
Customer satisfaction may seem more closely related to customer success as a KPI, but it plays an important role in the sales process as well. Your sales team, after all, is the first contact most prospects will have with your organization. A positive experience ensures your relationship starts off on the right foot.
Additionally, a low satisfaction score among new customers could indicate problems in the handoff between sales and customer success.
Customer satisfaction is generally measured through a CSAT or Net Promoter Score (NPS) survey.
Content Performance
Content performance as a KPI is typically calculated through several metrics related to sales collateral. It measures where and how your sales team uses content, as well as how effective each piece of content is at securing deals.
Training Completion Rate
This KPI can actually be applied in two different ways, each providing insight into a different area of your sales process.
When applied internally, it helps you identify potential onboarding issues, eliminating bottlenecks that may be holding back new employees. When applied externally, it can help you not only optimize your customer onboarding but also identify potential improvements to your software.
Average Training Time
As with training completion rate, Average Training Time can be applied to both internal sales training and your customer onboarding. In the case of internal onboarding, lower average training time means faster ramp time for new agents. For customer education, it means prospects can become paying, dedicated customers that much faster.
With all that said, a low average training time on its own doesn’t mean much — you need to contextualize it alongside other metrics such as churn, retention, time to first value, and win rate.
Time to First Value
This KPI directly measures the effectiveness of your customer onboarding process, identifying how long it takes a new customer to achieve product adoption.
Sales/Marketing Alignment
Sales and marketing are two sides of the same coin — as such, part of sales enablement must involve keeping the two departments collaborative with one another. The most common KPI used to measure this alignment is the percentage of marketing leads the sales team follows up on. The number of cross-functional meetings between the two departments may also be relevant, while KPIs such as CAC and revenue growth can help the departments stay aligned by being positioned as goals for both.
Enable Data-Driven Sales Within Your Organization
Sales enablement and analytics have always gone hand-in-hand. Without data, you cannot accurately determine the effectiveness of your sales enablement strategy. In some cases, it may be impossible to define a strategy to begin with — after all, effective sales enablement requires a deep understanding of your sales team and the challenges they face.
The best way to achieve that understanding is by choosing the right KPIs. Now that you understand how to do so, all that’s left is to choose the right tools. Book a demo, and we’ll show you how CloudShare fits into your sales enablement strategy. In the meantime, you can also learn how to build a more effective sales engineering team, then review some key metrics for measuring sales engineering performance.
