Importance of Sales KPIs For Manufacturing

Sales KPIs

Importance of Sales KPIs for Manufacturing

I think you will agree that your manufacturing company wants to boost its sales performance & improve profits.  Right?

Do you have a systematic sales performance measuring & tracking system in place? As they say, what you can measure, you can improve. Have you defined the sales goals & targets for number of leads, lead conversion rate, sales pipeline, customer acquisition cost and so on.

Are you keeping a close watch on your target vs actual performance by monitoring the sales key performance indicators? (Sales KPIs)?  KPIs essentially help monitor the sales team performance, track progress, identify patterns & provide valuable insights where your sales team is performing well & which areas need to improve upon.

Having said this, let us understand how to define the Sales KPIs, which are the most important Sales KPIs every manufacturing company must monitor continuously, how to monitor & improve Sales KPIs and so on.

How to Define Sales Targets?

While setting up the targets for the sales department, you need to take into consideration various factors like your company’s past & current performance, your aspirations for the future, & then define targets that will motivate & encourage sales team to achieve more.  Some of the most important high-level sales targets are:

  • Sales Revenue: Define the revenue you wish to generate per month
  • No of Leads: You need to define the number of leads required per month
  • Order Value: What is average order value required to achieve sales targets
  • Customer Acquisition Cost: Maximum customer acquisition cost to ensure profitability

It is relatively easy to define & set targets but the more important aspect is to religiously adhere to processes & measure the targets vs actual performance.  It must be clearly imbibed in the minds of all employees that we are working towards achieving certain goals and that we need to follow the systems & processes for the same.

Now that you have set up goals & parameters it is time to define the various Sales KPIs & how to measure them

Which Sales KPIs must a manufacturing company  measure?   

 There are various Sales KPIs that a manufacturing company needs to monitor. Some of the most prominent ones are Sales Funnel, Sales Cycle, Sales Revenue, Dispatch, Quality & Customer Satisfaction, Sales Team performance and so on. Let us look at them in details below.

1. Sales Funnel KPIs:

 Having a good sales funnel or sales pipeline is a healthy sign for any business. To measure the sales funnel, keep a record of the following:

  • Maintain No of Enquiries generated
  • No of Quotation submitted,
  • No of Opportunity in Pipeline,
  • No of Wins.

This will help you understand results of the marketing & sales teams and where you need to improve them.

2. Sales Cycle Time & Average ticket size 

  • Measure how much time it takes from enquiry to order conversion. (No. of Days)
  • Measure average ticket size of the deal.(Value /Amount)

This will give you the insights how quickly your sales are moving and size of deals. You can judge if you are on right track or need to make changes to achieve the targets.

3. Revenue Specific KPI

 It is important to know whether you are getting new customers regularly, how much repeat business are you getting from existing customers and so on. Hence you must track:

  • YTD Sales Revenue (year to date)
  • Average Monthly Sales Revenue
  • No of New Customers
  • % of revenue from new & old customers

Analyze sales performance for pre-defined periods such as weekly, fortnightly, monthly and determine the consistency or fluctuations.

4. Sales Dispatch 

  • Ontime Delivery Percentage
  • Time to Production
  • Time to Dispatch

Sales team will be ultimately successful when the right product is delivered on time to the customers. Else it will lead to unhappy customers. Measuring dispatch KPIs helps judge  the percentage of fulfilling your delivery commitments and analyze whether time to production & time to dispatch are satisfactory.

5. Sales Quality

  • No of Customer Complaints
  • Average Resolution Time
  • No of Sales Return
  • Top RCA

Quality KPIs help measure whether customers are satisfied or not. Tracking & monitoring the number of customer complaints, sales returns give a fair idea how you are performing on the quality front. These KPIs also help to find top RCAs that need attention

6. Sales Team Performance 

  • Sales Person wise Enquiry to Order ratio.
  • Sales Person wise Order Amount, Collection

Sales Team KPIs helps you identify Top performers & who needs help for improvement. Collection vs with order amount help you to understand the financial quality of the orders.

7. Sales Accounting Related KPI

  • Receivable Turnover
  • Average Credit Days

These KPIs measure the efficiency of the collection process and customer credit practices.

Now that you have set up the KPIs meticulously according to your specific requirements, it is time to have a system for continuous monitoring to ensure that KPIs targets achieved.

How to monitor the Sales KPIs effectively?

 Frequent, regular monitoring is the key to successful KPI implementation and stepping stone to improve your sales team performance.

  • Alerts & Notifications: Set up alerts & notifications if any KPIs are deviating from specified range. This will help to manage by exception & improve those areas
  • Generate reports: Generate reports at pre-defined intervals to keep a track of the sales performance
  • Dashboards: Create Dashboards for a one glance overview of the operations
  • KPI Review meetings: Schedule reviews weekly, monthly, quarterly as per your specific requirement to analyze the trends and identify areas of improvement

How to Improve Sales Performance based on insights from KPIs? 

Here are some measures to improve the sales performance based on KPIs insights.

  • Sales Process: Based on the inputs received from the KPIs trends and patterns, streamline the process to eliminate bottlenecks, delays, & improve performance.
  • Incentives: Offer incentives such as bonus, rewards to sales team members for achieving their targets & going beyond the expectations
  • Train Sales Team: Continuous learning for improving the sales team skills & knowledge will provide them the boost to achieve more.


Sales KPIs are a great mechanism to gain insights of sales performance and make data-driven decisions to improve the performance.  Setting targets, monitoring progress, and fine-tuning processes lays a strong foundation to increase sales number, improve profits & achieve growth

ERP Software is a great mechanism to implement KPIs effectively in a manufacturing company.

Request a Demo of Spectrum ERP

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