What is a sales KPI?
A sales KPI is a number that shows whether your sales are on track. Learn the main B2B sales KPIs, how to choose them and how to avoid vanity metrics.
By the PromptLab team7 November 20264 min read
Definition
Sales KPI
A sales KPI (key performance indicator) is a number you track on a regular basis to see whether sales are moving toward a goal. Good KPIs are few, clear and tied to something a rep or manager can change.
A sales team can measure hundreds of things. A KPI is one of the handful that actually tells you whether the quarter is on track.
KPI vs metric
Every KPI is a metric, but most metrics are not KPIs. "Emails sent" is a metric. "Win rate" is closer to a KPI, because it tells you whether the sales effort is working. A KPI should link to a goal, such as revenue, margin or customer retention.
Common sales KPIs for product sellers
Results
- Revenue: what you invoiced or booked in the period.
- Win rate: the share of deals that end in an order.
- Average order value: what a typical order is worth.
- Gross margin: what is left after the cost of goods. Revenue without margin can mislead.
- Quota attainment: how far each rep is toward their target.
Pipeline
- Pipeline coverage: open deal value compared with the target.
- Sales velocity: how fast value moves through the pipeline.
- Sales cycle length: days from first contact to order.
- New opportunities created: whether the top of the pipeline is being filled.
Customers
- Customer churn: accounts that stop buying.
- Customer lifetime value: what an account is worth over time.
- Reorder rate: how many customers buy again.
Activity
- Quotes sent, samples shipped, calls and meetings held. These are leading numbers. They predict results but are not results.
How to choose your KPIs
- Start from the goal. If the goal is more repeat business, track reorder rate. If it is bigger deals, track average order value.
- Mix leading and lagging. Revenue is lagging: it tells you what already happened. Quotes sent and pipeline coverage are leading.
- Keep it to five to eight. More than that and nobody remembers them.
- Make each one owned. A KPI no one can influence is just a report.
- Set a target and a review rhythm. Weekly for activity, monthly for results.
An example from product sales
Say a plastics distributor wants to grow repeat orders. The sales manager picks six KPIs: revenue, gross margin, win rate, sales cycle length, pipeline coverage and reorder rate. Each Monday the team looks at pipeline coverage and quotes sent. At month end they review win rate, margin and reorder rate.
After two months the numbers show a problem. Win rate is steady, but the sales cycle has grown, because samples are slow to ship. The team fixes the sample step, not the pitch.
Mistakes to avoid
- Vanity KPIs. Counting calls without caring whether they lead anywhere.
- Too many KPIs. Pick the few that matter.
- Revenue only. A big month at low margin can hide a problem.
- No definitions. Write down what counts as a "won" deal or a "new opportunity" so the numbers mean the same thing to everyone.
Our guide on how to build a sales dashboard shows how to put them on one screen.
Related terms
- Win rate: deals won divided by deals decided.
- Sales forecasting: predicting revenue from the pipeline.
- Sales quota: a rep's target for a period.
- Pipeline coverage: open pipeline against the target.
How PromptLab handles it
PromptLab has reports and dashboards on pipeline and revenue, so you can chart deals by stage, owner and value. Deals have a value and a loss reason from a fixed list (Price, Competitor, Timing, No budget, Product fit, Other), so you can see why deals are lost. Ask AI answers plain-word questions about your deals and quotes, and dashboards can be shared by a read-only link.
Frequently asked questions
What is a sales KPI?
A sales KPI is a number tracked regularly to show whether sales are on course to meet a goal, such as win rate, revenue or sales cycle length.
How many sales KPIs should a team track?
Five to eight is a good range. Fewer misses the picture, and more makes the numbers hard to act on.
What is the difference between a KPI and a metric?
A metric is any measurement. A KPI is a metric tied to a goal that the team tracks closely. All KPIs are metrics, but not every metric is a KPI.
What are the most important B2B sales KPIs?
Common ones are revenue, gross margin, win rate, average order value, sales cycle length, pipeline coverage and reorder rate. The right set depends on your goal.
How often should I review sales KPIs?
Review activity and pipeline numbers weekly, and results such as revenue, margin and win rate monthly. Review the choice of KPIs themselves each year.