10 Key Performance Indicators in Sales

1. Customer Lifetime Value (CLV)

CLV, or Customer Lifetime Value, answers the question of how much average profit you can expect from a single customer over their entire lifecycle. It also helps forecast revenue based on whether your customer base is growing or shrinking over time.

2. Customer Churn Rate

The churn rate—or customer attrition rate—is especially important for companies whose customers pay a recurring monthly fee. A typical example would be software companies offering Software as a Service (SaaS).

Customer churn rate indicates the number of customers who stop using your services within a specific time period (e.g., a month, quarter, or year). If the churn rate is rising or consistently high, take it as a signal to improve your services and find ways to retain customers.

To calculate the churn rate, divide the total number of customers lost during the month by the number of customers you had at the beginning of that month.

3. Average Sales Cycle Length

The average sales cycle length refers to the time it takes for a customer to move through the entire sales process—from lead to closed deal. This metric provides insights into how you can shorten the sales cycle. The less time a customer spends in each stage of the cycle, the better.

The average sales cycle length will likely vary between the entire team and individual salespeople. If you're a sales manager, this metric can help identify areas where your team members may need mentoring.

4. Lead-to-Opportunity Ratio

This metric evaluates the quality of your leads (potential customers who have shown initial interest in your products), i.e., whether your leads are relevant to your business. If the data shows your lead quality is low, you'll need to adjust your lead generation strategy—for example, refine your target audience definition or seek leads in different places.

To track lead effectiveness, calculate how many of your leads eventually became opportunities (i.e., customers who moved further down the sales funnel and are interested in a sales meeting). The higher the percentage, the better.

5. Opportunity-to-Lead Ratio

This metric shows how effectively your salespeople close deals. It tracks the process from the sales meeting to closing, and—just like the previous metric—monitors the percentage of opportunities successfully turned into closed deals.

Track this metric separately for individual sales reps and for the entire team. You might find that some reps struggle with closing deals, and can benefit from mentoring in sales negotiation.

Don't forget to analyze your lost deals as well—we’ve covered this in a separate article.

6. Average Revenue per Salesperson

Knowing how much revenue one salesperson generates on average is key to setting their salary and commission structure. This metric also helps set realistic goals for your sales team and determine whether performance is improving over time, as well as identify the periods and conditions under which salespeople perform best.

If performance is lacking, you can explore ways to improve results—such as through training, adjusting the commission structure, or refining the sales process.

7. Monthly Sales Growth

Monthly sales growth is a key metric not only for the sales department but for the business as a whole. Tracking it allows management to quickly identify issues behind growth stagnation and start addressing them.

Set a realistic monthly growth target and communicate it to your sales team. For example, you can calculate it using the following formula:

8. Average Deal Value

This metric tells you how much customers spend on average during a single purchase. You can calculate it simply by dividing total sales by the number of customers.

Why is this metric useful? One of the most effective ways to increase profit is to sell more to existing customers. Your sales team can use this figure to develop new sales strategies or predict the potential value of new leads.

9. Sales by Contact Channel

By tracing successful deals back to their origin, you gain valuable insights for directing your sales strategy. Start by defining your most common acquisition channels—whether active ones like PPC ads or cold calls, or passive ones like organic website visits or walk-ins past your store.

Then, for each channel, apply the following formula:

For example, you’ll discover which channels are most promising and worth investing in even further.

10. Product Performance

And finally, a key yet often overlooked metric. It helps you identify which products and services bring the most value—and which are lagging behind. Sales volume alone doesn't reveal true product performance—low-priced items selling in the thousands may not be among the top revenue generators.

You can determine product performance by calculating which products and services generate the highest revenue over a given period. Then, analyze why these particular offerings are successful. Is it due to marketing campaigns, social trends, or product quality that clearly outpaces the competition? Think about how you can amplify that success or apply it to other areas.