Sales KPIs That Improve Performance for B2B Software Companies

By Henry Canitz – Principal, NITZ Consulting

For B2B software companies, increasing revenue is often a top priority, and sales key performance indicators (KPIs) can help them achieve this goal. Sales KPIs are quantitative measures used to assess sales performance and can be used to track progress to targets, identify trends and themes, and manage individual and team performance. There are 18 top sales KPIs that B2B software companies should track, which are organized into six categories: lead generation KPIs, opportunity creation KPIs, account management KPIs, revenue and profitability KPIs, expansion and churn KPIs, and sales rep performance KPIs.

Lead generation KPIs are the top-of-the-funnel metrics that indicate the number of leads entering the sales funnel and how many opportunities the sales development representatives (SDRs) can expect to hand off to account executives (AEs). Two lead generation KPIs that B2B software companies should track are sales eligible lead delivery, which is the total number of inbound leads across all channels that are passed from the marketing team to sales based on shared qualification criteria, and first response time, which is the amount of time it takes SDRs to follow up with leads.

Opportunity creation KPIs are metrics that indicate the effectiveness of the sales team in creating opportunities and moving them through the sales funnel. Two opportunity creation KPIs that B2B software companies should track are stage one opportunity creation, which is the number of new leads that SDRs mark as qualified and pass to AEs, and stage two opportunity creation, which is the number of new opportunities created by AEs.

Account management KPIs are metrics that indicate the health of existing accounts and the effectiveness of the account management team. Three account management KPIs that B2B software companies should track are the number of accounts contacted, the number of accounts engaged, and the average revenue per account.

Revenue and profitability KPIs are metrics that indicate the overall revenue and profitability of the company. The two revenue and profitability KPIs that B2B software companies should track are new logos acquired, which is the number of new customers acquired, and new logo revenue, which is the revenue generated by new customers.

Expansion and churn KPIs are metrics that indicate the effectiveness of the company in expanding existing accounts and retaining customers. The three expansion and churn KPIs that B2B software companies should track are expansion dollars, which is the additional revenue generated from existing customers, contraction dollars, which is the revenue lost due to customer downgrades or cancellations, and gross customer churn, which is the percentage of customers lost during a given time period.

Sales rep performance KPIs are metrics that indicate the performance of individual sales reps. Three sales rep performance KPIs that B2B software companies should track are individual quota attainment, which is the percentage of quota achieved by each sales rep, revenue sold per rep, which is the revenue generated by each sales rep, and net new revenue attainment, which is the revenue generated by each sales rep from new customers.

It is important to note that while headline KPIs such as organizational or individual attainment can provide a concise way of understanding where a company has netted out, they rarely provide the full picture of how or why the company hit or missed its targets. Therefore, B2B software companies should spend much of their time examining underlying KPIs like lead flow, pipeline creation, churn, and expansion to drive action for their teams.

In conclusion, B2B software companies should use sales KPIs to track their sales performance, identify trends and themes, and manage individual and team performance. Sales leaders need to interpret and use data about their team and organization throughout the sales cycle and sales reps need to be comfortable understanding the data behind their pipeline. There are multiple types of KPIs that sales leaders can track to drive key outcomes including lead generation KPIs, lead conversion KPIs, opportunity management KPIs, account management KPIs, sales activity KPIs, and sales goal KPIs.

What KPIs does your company use to track sales performance, identify sales trends and measure individual and team performance?