Sales growth metrics and KPIs

When you own a business, you’d do anything to make it successful. You probably think whether your sales team is able to increase the revenue, but you are not sure how to find out. Thankfully, the sales growth metric exists, and it has the ability to reveal the answer to your questions.

Therefore, let’s get started with the information about sales growth metrics and KPIs.

What is Sales Growth?

Basically, sales growth is a metric, and it’s used to calculate your sales team’s ability to increase revenue over a fixed period. If revenue growth doesn’t occur, your company risks being overtaken by competing businesses and stagnating. Therefore, the metric is a strategic indicator used when trying to take a decision on whether you should increase revenue. It is used by executives and the director board, and it can influence the business strategy’s formulation and execution.

Overall, it wouldn’t be so easy to overstate the sales growth metric’s importance. It is, after all, tied to revenue and profitability. All organizations rely on growth because that’s what brings them the success they look for. Once there is a decline in the performance, the sales organization accumulates a lot of pressure, so they are doing their best to deliver results. So, a big part of the sales growth is the cause for optimism in all stakeholders such as director boards, executives, and shareholders.

How is it Calculated?

The formula for sales growth is not so complicated. You just have to look for some information, and then use the following formula to measure it:

[(Sales for the current period – Sales for the previous period) / Sales for the previous period] x 100.

The Sales Growth Metric and Its Importance

There are very few metrics that have the potency of sales growth. Everyone focuses on the numbers and the continuous achievement of growth monthly, quarterly or annually.

The sales growth metric can, however, make you and your whole team rally. When your goal is to achieve an organizational target, such as growing the percentage in revenue, you can develop a bunch of interdependent metrics at every level of your sales team.

For instance, imagine that your sales executives and revenue will have the task with that high-level objective. At the same time, the managers will focus on their activities only under his or her control. So, whereas executives will be tracking the growth in sales, the directors will track them by rep. The reps will also track his or her quote-to-close ratio.

Can You Lead Your Team Through the Sales Growth Metric?

As mentioned, the metric can cause you and your entire team to rally. Still, it lacks the specificity your account managers and frontline reps require to do their job better. The list of metrics that come from the growth in sales can bring focus and clarity to sales activities throughout your team.

In order to lead your team with these metrics, you have to make performance metrics visible to the members. You can do that through Excel, PowerPoint or Google Sheets.

All in all, the sales growth metric can show you the team’s ability to increase revenue over a fixed period. It can also be used to lead the team if you make it public to all the team members, so make sure you use it wisely.