Success in sales depends on tracking the right key performance indicators (KPIs). This glossary provides clear definitions and simple formulas for the most important sales metrics, helping sales professionals, managers, and business owners measure performance and optimize strategies. Whether you’re analyzing pipeline growth, conversion rates, or customer retention, this guide will help you make data-driven decisions that drive revenue and efficiency.
Explore the glossary below to gain a deeper understanding of essential sales KPIs and how they impact your business.
Annual Contract Value (ACV) – The average annual revenue from a contract.
Formula: Total Contract Value ÷ Contract Duration (in years)
Average Contract Value (ACV) – The average value of a contract, regardless of duration.
Formula: Total Contract Revenue ÷ Number of Contracts
Average Deal Size – The average revenue generated per closed deal.
Formula: Total Revenue from Closed Deals ÷ Number of Deals
Average Revenue Per Account (ARPA) – The average revenue per customer account.
Formula: Total Revenue ÷ Number of Accounts
Churn Rate – The percentage of customers lost over a period.
Formula: (Lost Customers ÷ Total Customers at Start) × 100
Cost of Goods Sold (COGS) – The direct costs of producing goods or services sold.
Formula: Direct Material + Direct Labor + Overhead Costs
Cost Per Lead (CPL) – The cost of acquiring a lead.
Formula: Total Marketing Spend ÷ Number of Leads
Customer Acquisition Cost (CAC) – The cost of acquiring a new customer.
Formula: Total Sales & Marketing Spend ÷ Number of New Customers
Customer Effort Score (CES) – Measures customer ease of interaction.
Formula: (Total CES Score ÷ Number of Responses)
Customer Feedback Response Rate – Percentage of customers who respond to feedback requests.
Formula: (Number of Responses ÷ Total Requests Sent) × 100
Customer Lifetime Value (CLV) – The total revenue a business expects from a customer.
Formula: Average Revenue per Customer × Average Customer Lifespan
Customer Retention Rate – The percentage of customers retained over a period.
Formula: [(End Customers – New Customers) ÷ Start Customers] × 100
Customer Satisfaction Score (CSAT) – Measures customer satisfaction with a service.
Formula: (Sum of Customer Scores ÷ Total Responses) × 100
Deal Velocity – The speed at which deals move through the pipeline.
Formula: (Number of Deals × Win Rate × Average Deal Size) ÷ Sales Cycle Length
Discount Rate – The percentage reduction applied to standard pricing.
Formula: (Discount Amount ÷ List Price) × 100
First Contact Resolution Rate – The percentage of issues resolved on the first interaction.
Formula: (Resolved Issues on First Contact ÷ Total Issues) × 100
Gross Profit Margin – The percentage of revenue remaining after COGS.
Formula: [(Total Revenue – COGS) ÷ Total Revenue] × 100
Lead Acquisition Source – Identifies the origin of leads (e.g., organic, paid ads).
Lead Scoring Accuracy – Measures the effectiveness of lead qualification.
Formula: (Number of Correctly Qualified Leads ÷ Total Leads Scored) × 100
Lead-to-Opportunity Conversion Rate – The percentage of leads that become opportunities.
Formula: (Number of Opportunities ÷ Total Leads) × 100
Marketing Qualified Leads (MQLs) – Leads identified as more likely to convert based on engagement.
Number of New Opportunities – The total count of new potential deals created.
Lead Conversion Rate – The percentage of leads that turn into customers.
Formula: (Number of Converted Leads ÷ Total Leads) × 100
Lead Response Time – The average time taken to respond to new leads.
Formula: Total Time to Respond ÷ Number of Leads
Net New Revenue – The revenue gained after accounting for churned revenue.
Formula: New Revenue – Lost Revenue
Number of Qualified Leads – The count of leads meeting defined qualification criteria.
Net Promoter Score (NPS) – Measures customer loyalty based on feedback.
Formula: % Promoters – % Detractors
Operating Profit Margin – Measures profitability after operating expenses.
Formula: (Operating Profit ÷ Total Revenue) × 100
Opportunity-to-Win Ratio – The percentage of opportunities that turn into closed deals.
Formula: (Won Deals ÷ Total Opportunities) × 100
Pipeline Coverage – The ratio of pipeline value to sales quota.
Formula: Total Pipeline Value ÷ Sales Quota
Product Adoption Rate – The percentage of customers using a product feature.
Formula: (Active Users ÷ Total Customers) × 100
Product Penetration Rate – The percentage of market share captured.
Formula: (Total Customers Using Product ÷ Total Market Size) × 100
Quota Attainment – The percentage of sales quota achieved.
Formula: (Sales Achieved ÷ Sales Quota) × 100
Renewal Rate – The percentage of customers renewing their contracts.
Formula: (Renewed Customers ÷ Total Eligible for Renewal) × 100
Revenue Growth – The percentage increase in revenue over a period.
Formula: [(New Revenue – Old Revenue) ÷ Old Revenue] × 100
Sales Coaching Effectiveness – The impact of coaching on sales performance.
Formula: (Performance Improvement ÷ Pre-Coaching Performance) × 100
Sales Conversion Rate – The percentage of leads that turn into closed deals.
Formula: (Closed Deals ÷ Total Leads) × 100
Sales Cycle Length – The average time taken to close a deal.
Formula: Total Sales Cycle Time ÷ Number of Deals
Sales Forecast Accuracy – The accuracy of sales predictions.
Formula: [(Actual Sales – Forecasted Sales) ÷ Forecasted Sales] × 100
Sales Pipeline Growth – The percentage increase in sales pipeline value.
Formula: [(New Pipeline Value – Old Pipeline Value) ÷ Old Pipeline Value] × 100
Sales Productivity – Measures efficiency in achieving sales goals.
Formula: Revenue per Sales Rep ÷ Total Sales Resources
Sales Qualified Leads (SQLs) – Leads vetted by sales as ready for engagement.
Sales Rep Activity Metrics – Tracks individual sales rep actions (calls, emails, demos).
Sales Rep Ramp Time – The time taken for a new sales rep to become fully productive.
Formula: Total Time to Full Productivity ÷ Number of New Hires
Sales Rep Retention Rate – The percentage of sales reps retained over time.
Formula: [(Start Reps – Left Reps) ÷ Start Reps] × 100
Sales Rep Satisfaction – Measures how satisfied sales reps are with their role.
Formula: (Sum of Satisfaction Scores ÷ Total Responses) × 100
Time Spent Selling – The percentage of a rep’s time spent on selling activities.
Formula: (Time Selling ÷ Total Work Hours) × 100
Time to First Sale – The average time for a new rep to close their first deal.
Formula: Total Days to First Sale ÷ Number of New Reps
Training Completion Rate – The percentage of sales reps who complete training.
Formula: (Completed Training ÷ Total Assigned Training) × 100
Upsell/Cross-sell Revenue – Revenue from existing customers buying additional products.
Formula: Total Revenue from Upsells & Cross-sells
Win Rate – The percentage of opportunities that turn into closed deals.
Formula: (Closed Deals ÷ Total Opportunities) × 100
