KPIs for Driving Revenue Growth

KPIs for Driving Revenue Growth

Sharks must keep swimming or they die. It is the same for sales leaders: Revenue must keep growing or they will be replaced. Driving revenue growth on a consistent and predictable basis requires a repeatable and scalable sales model. To achieve consistency and predictability, it is help to incorporate key performance indicators (KPIs) in the management process. KPIs help leaders to ensure the sales engine is firing on all cylinders and identify when/where turning is needed. Below are seven KPIs to help sales leaders drive consistent and predictable revenue growth.

  • Acquisition Cost – How profitable is each deal? Discounting and giveaways reduce total revenue realized by the company, both on the top-line and the bottom-line. Make sure that you are not losing by winning.
  • Attach Rate – What is the average amount of revenue that you are adding-on, cross-selling or up-selling on deals?  Attach is a key driver of revenue growth (e.g., enterprise software + professional services).
  • Average Deal Size – What is the average amount of revenue for each closed deal? Is the average deal size getting bigger or smaller? If smaller, increase your focus on add-on, cross-selling and up-selling.
  • Discount Ratio – What percentage of revenue is being lost due to discounting deals? While discounting is often necessary to get deals done, it slows revenue growth. Always sell value or discounts where possible.
  • New Logos – How many net new customers are you adding to your book of business? Net new customers are the lifeblood of sales. Work to balance your revenue growth efforts between existing and new customers.
  • Percentage of Repeat Business – How many customers purchase from you more than once? It costs 8X more to acquire a new customer than retain one. Maximize the revenue growth potential in existing customers.
  • Share of Wallet – What is the percentage of how much money the customer is spending with all vendors and how much money they are spending with you? Focus on increasing your share of the customer’s total spend.

All contents copyright © 2012, Josh Lowry. All rights reserved.

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