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Here’s an overview of key sales metrics to track for sales performance and customer retention, along with their formulas and an example table layout for easy tracking.
Here’s an overview of key sales metrics to track for sales performance and customer retention, along with their formulas.
Top sales Metrics you need to be tracking:
1. Sales Growth
This metric measures the increase or decrease in sales revenue over a specific period.
Why It Matters:
gauge the overall health and momentum of your business. A steady increase in sales growth indicates effective sales strategies and customer demand.
Formula
Sales Growth(%) = ((Current Period Sales−Previous Period Sales)/Previous Period Sales)100
2. Customer Retention Rate (CRR)
Description: Indicates the percentage of existing customers who continue to do business with you over a given period.
Why It Matters: High retention rates mean strong customer loyalty, which is often more cost-effective than acquiring new customers.
Formula:
CRR (%) = ((Customers at End of Period - New Customers)/Customers at Start of Period) 100
3. Customer Churn Rate (CCR)
Description: The percentage of customers lost during a period compared to the starting customer base.
Why It Matters: Highlights customer dissatisfaction or competition challenges. A high churn rate is a warning sign for deeper issues.
Formula:
CCR (%) = (Customers Lost During Period/Customers at Start of Period)*100
4. Average Revenue Per User/ Account (ARPU)
Description: Represents the average revenue generated from each customer in a specific period.
Why It Matters: Helps assess customer value and identify opportunities to increase revenue per customer.
Formula:
ARPU = Total Revenue /Total Customers
5. Sales Conversion Rate
Description: Tracks the percentage of leads that successfully convert into paying customers.
Why It Matters: Shows the effectiveness of your sales funnel and team performance. A low rate may indicate gaps in the sales process.
Formula:
Conversion Rate(%) = (Closed Sales/Leads Generated)* 100
6. Customer Lifetime Value (CLV)
Description: Predicts the total revenue a business can expect from a single customer over the entire relationship.
Why It Matters: A high CLV justifies the cost of acquiring new customers and reflects the potential profitability of each relationship.
Formula:
CLV = Average Purchase Value x Average Purchase Frequency x Customer Lifespan
7. Net Promoter Score (NPS)
Description: Measures customer satisfaction and loyalty based on their likelihood to recommend your business.
Why It Matters: A high NPS indicates strong customer advocacy, while a low score reveals dissatisfaction and reputational risks.
Formula:
NPS = % Promoters- % Detractors
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