Staying on top of key performance indicators (KPIs) is essential as a freelancer. These metrics can provide valuable insights into your business strategies’ effectiveness and help you gauge your overall success.
In this article, we will take a look at why KPIs are important for freelancers, what KPIs in sales look like, and some of the most effective tools to help simplify the process.
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What Are Key Performance Indicators, and Why Are They Important?
KPIs, or key performance indicators, are methods for measuring the performance of a process or a strategy in a business. KPIs in sales refer to indicators that define the success of your sales strategies, such as client retention rates, conversion rates, and revenue from sales.
KPIs also provide valuable insights into various aspects of performance, which can improve your decision-making and effective strategy development. They are typically based on specific objectives or goals, and are designed to track and measure critical areas of performance.
By continually monitoring and analyzing KPIs, you can assess your sales performance against set objectives, identify your strategies’ strengths and weaknesses, and make data-driven adjustments to improve overall performance.
Essential Sales KPIs for Freelancers to Track
According to a survey by Geckoboard, 49% of small businesses don’t even identify the key performance indicators that they should track. That is why we compiled this list of essential sales KPIs to keep track of, outlined below.
One of the most obvious examples of a sales KPI is revenue. This KPI helps you to measure the total income generated from your sales within a specific period, for example, the financial quarter. It can give freelancers a clearer picture of their financial performance and growth.
Conversion rates are the percentage of leads that eventually convert into sales. This can help you to measure the success of your lead nurturing strategies, and improve efforts if leads are not being pushed through the sales funnel.
Sales Growth Rates
Sales growth rates measure the increase or decrease in sales over a specific period. This helps to forecast the growth trajectory of your freelance business, and can serve as an indicator of overall performance.
Customer Acquisition Costs
Tracking your customer acquisition costs can help you to measure the average cost of acquiring a new customer. This way, you can understand the resources and expenses associated with obtaining new business, which can aid you in future budgeting and decision-making.
Customer Lifetime Values
The customer lifetime value refers to the total lifetime revenue that you can expect from each of your customers. If one client’s lifetime value is higher than another, it can help you to decide which to focus your time and resources on nurturing.
New Leads in the Pipeline
Keeping track of leads you acquire over a specific time period can help you to determine the success of your sales and marketing strategies. It can also help you to track the ratio between leads and sales, and set a goal for the minimum number of leads that you need to obtain within a time period.
Customer Retention Rates
According to a report by Invesp, the probability of selling to an existing client is 60-70%, while selling to a new prospect is around 5-20%. Measuring your client retention rates is essential, as it can provide you with valuable insight into whether or not your clients are satisfied enough with your services to continue doing business with you long-term. If your retention rates are low, that means that you may need to re-evaluate the value that you are bringing to your clients.
Time to Close
Another very important KPI to track is the time it takes you to push a lead through the lead lifecycle to eventually become a close, from initial contact to the moment you close the deal. This can provide you with insights into your lead nurturing strategies and your processes at every stage of the sales funnel.
In addition to these, the table below includes several more KPIs that can be useful for measuring business performance:
|Average Revenue Per User (ARPU)||The average amount of revenue generated per user or customer during a specific period of time.|
|Click-Through Rate (CTR)||The percentage of people who click on a specific link, advertisement, or call-to-action out of the total number of people who see it.|
|Return on Investment (ROI)||The ratio of the net profit generated from an investment to the cost of the investment, expressed as a percentage.|
|Bounce Rate||The percentage of website visitors who leave after viewing only one page, without clicking on any links or taking any further action.|
|Engagement Rate||The level of engagement and interaction that your audience has with your content, typically measured by likes, shares, comments, and other types of interactions.|
|Cost per Acquisition (CPA)||The total cost of acquiring a new customer, divided by the number of customers acquired.|
|Net Promoter Score (NPS)||A metric that measures customer loyalty and satisfaction by asking customers to rate their likelihood of recommending a product or service to others.|
|Average Order Value (AOV)||The average amount spent by a customer per transaction or purchase.|
|Churn Rate||The percentage of customers who stop using a product or service during a given period of time.|
|Response Time||The average amount of time it takes to respond to client inquiries or requests.|
|Project Completion Time||The average amount of time it takes to complete a project, from start to finish.|
|Client Satisfaction Rate||The percentage of clients who report being satisfied with the freelancer’s work or services.|
|Repeat Business Rate||The percentage of clients who return to work with the freelancer again.|
|Billable Hours||The total number of hours worked that can be billed to clients.|
|Utilization Rate||The percentage of billable hours in a given time period, compared to the total number of available working hours.|
|Proposal Conversion Rate||The percentage of proposals submitted that result in new clients or projects.|
|Time to Payment||The average amount of time it takes to receive payment from clients after submitting an invoice.|
Tools for Tracking KPIs
Geckoboard provides businesses with a sophisticated and easy-to-use KPI tracking dashboard. Using its intuitive drag-and-drop interface, users can easily create visually appealing dashboards that display a variety of metrics. This tool is simple to set up, and sources data directly from programs such as Excel spreadsheets to create easy-to-understand visualizations of your most important metrics.
Zoho is one of the most popular KPI tracking solutions available on the market. With Zoho, you can create personal dashboards for your entire business or for each stakeholder individually. This platform is ideal for solopreneurs, small businesses, or large corporations.
There is no better KPI tracking tool for businesses just starting out than SimpleKPI. This software is designed to be incredibly simple and easy to use, and can provide you with all of the necessary KPI insights, from financial to sales metrics.
Asana is not only a great project management tool, but is also effective for tracking and measuring KPIs. Asana’s KPI tracking system is known as OKR, which stands for Objectives and Key Results. In the OKR system, administrators can create different tasks with objectives attached to them, which can be used to track progress over time.
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Tracking and measuring key performance indicators is crucial to the continuous growth and success of any business, and freelancers can benefit from using tools such as Asana or SimpleKPI to simplify the process.
As nearly half of businesses do not adequately track their KPIs, freelancers can gain a competitive advantage by prioritizing this process and incorporating their findings to improve their future strategies.