List of top Sales and Marketing KPIs for Professional Services

Top Sales & Marketing KPIs for Professional Services

by | Oct 5, 2023 | Consulting Businesses

What are the most important Sales and Marketing KPIs for Professional Services Businesses?

In the dynamic world of professional services, where growth and success depend on effective sales and marketing strategies, tracking the right Key Performance Indicators (KPIs) is paramount. This collection of KPIs falls under the “Sales and Marketing” category, focusing on the metrics that can supercharge your acquisition efforts, boost conversions, and drive revenue. Whether you’re a seasoned professional services firm or just starting, understanding and monitoring these KPIs will help you stay competitive and achieve your goals.

Formula for calculating Sales Growth Rate

  • Formula definition: ((Current Period Sales — Prior Period Sales) / Prior Period Sales) x 100
  • Department: Sales/Marketing
  • Frequency: Annually/Monthly/Quarterly
  • Purpose: To keep track of your sales and Gauge the pace at which a firm’s revenue from client engagements expands over a given period.

Tip: To get a percentage, divide (current earnings – previous earnings) by previous earnings, then multiply by 100. Sales growth is measured annually, but you can measure it monthly or quarterly. Relevant revenue growth is unaffected by monthly seasonal swings. Organizations with seasonal revenue should measure sales increase in the same month (or season) as the previous year.

Formula for calculating Lead to Opportunity Ratio or Conversion Rate

  • Formula definition: (Number of leads converted into opportunities / total number of leads) x 100
  • Department: Sales/Marketing
  • Frequency: Monthly
  • Limitation: Sales Cycle Length
  • Purpose: To quantify the proportion of leads successfully transformed into valuable business opportunities. The lead-to-opportunity conversion rate is a crucial metric within the professional services sector. It serves as a valuable indicator, pinpointing the percentage of qualified sales prospects within the industry.

Tip: You can see how well your sales staff is doing by looking at the Lead Conversion Rate. Its formula is the number of leads converted into sales divided by the total number of leads multiplied by 100. It is highly recommended to report on this professional services KPI every month.

Formula for calculating Lead to Customer Ratio

  • Formula definition: (Number of leads converted into customers / total number of leads) x 100
  • Department: Sales/Marketing
  • Frequency: Monthly, Weekly
  • Limitation: Sales Cycle Length
  • Purpose: To gauge if your team is good at winning new customers and closing deals. This metric is critical to evaluating the sales funnel’s performance of a professional services provider.

Tip: Lead to Customer Ratio measures how many qualified leads became actual sales or conversions during a specific period, divided by the total number of qualified leads generated within that same time frame. It finds utility within the professional services realm for evaluating the efficiency of a firm’s diverse acquisition channels. Typically, this conversion rate is computed on either a weekly or monthly basis.

Formula for calculating Forecasted Revenue Recognition

  • Formula definition: (Total Billable Hours Sold for a Period / Avg. Billable Hours Consumption per period)
  • Department: Sales/Marketing/Operations
  • Frequency: Monthly
  • Purpose: To evaluate how much revenue your professional services business will generate from new sales in the following period.

Tip: Revenue recognition is the process of accounting for revenue. Revenue is recognized when it is earned, and it is measured by the fair value of the consideration received or to be received.

There are five primary methods of revenue recognition: the cash basis, accrual basis, completion of the contract, percentage of completion, and time-based. Most professional services consulting firms will use the percentage of completion method as the most relevant for their businesses.

Personally, we like to use that principle to recognize forecasted revenue. You can use those principles to evaluate your sales pipeline and your requirements for new sales. To be able to calculate a forecast on the percentage of completion, we like to calculate my billable hours consumption rate. Most consulting services firms have different rhythms for project completion based on each phase. We generally like to set up a formula that fits our reality with our occupation rate and our starting lag.

A real-life example of Forecasted Revenue Recognition in the Professional Services sector.

Here is an example. We like to set our year in 28-day periods (4 weeks). Each billable resource generally consumes 160 hours per period. As a team of 10, we consume 1600 hours per period. We normally have 5 projects happening simultaneously in parallel. So, we can estimate an average of 320 billable hours consumption for one project. If we sell 2000 hours this month, it will take us 6.25 months to complete our projects.

By calculating this way, you can start setting objectives and goals for your team that consider your billable hours needs.

Formula for calculating Sales Capacity by Employee/Skills/Roles Utilization

  • Formula definition: Team’s Total Capacity – Number of Planned Hours
  • Variance: Project Manager’s Total Capacity – Number of Planned Hours for Project Manager
  • Department: Sales/Marketing/Operations
  • Frequency: Monthly/Quarterly
  • Goal: To evaluate how much your team could sell in the following period.

Tip: There are two different ways to calculate sales capacity.

a) One is to define a Sales Capacity for a rep. Evaluate how much each sales rep might be able to generate. As a consulting/professional services firm, you want to be able to calculate your team’s capacity in terms of new sales.

b) In terms of forecasting, you want to be able to have your team’s capacity for the following weeks/months based on your planning.

Formulas for calculating Number of Canceled Sales/Projects/Requests

  • Formulas definitions
    • Ratio: # of Sales Lost/Disqualified due to Capacity / Total # of Leads
    • Amount: of Sales Lost/Disqualified due to Capacity x Values
    • Perfect Salesmen Formula: # of Leads x Our Best Lead to Won Opportunities Ratio x Avg. Won Opportunities Values
  • Department: Sales/Marketing
  • Frequency: Monthly/Quarterly/Yearly
  • Purpose: To evaluate if your sales team is able to manage volume capacity effectively.

Tip: To compute a cancellation rate, it’s important to keep that information in your CRM. At Klient, we like to have visibility on timing/capacity reasons why a lead or customer decided to cancel their request. It gives us visibility on how many billable hours we could reach if we had more resources.

The challenge arises when a sales team has a service team at low capacity. They will unconsciously reduce their internal pressure to close sales.

A real-life example of Number of Canceled Sales

We had a rep who, in 3 years, went from a 25% to 80% disqualification rate. He would over-disqualify for random reasons because he knew we didn’t have the capacity. Unfortunately, our opportunity won rate stayed the same. As a result, our Lead to Customer ratio went from 35% to 12% over those 3 years.

We monitor Opportunity Won Rate and Disqualification Rate to verify that phenomenon. This is why we like to calculate a “perfect sales rep” formula as well as compare our year to our best historical ratios. In short, It tells us how much money we left on the table.

Formulas for calculating Cost per Lead/Opportunity/Customers (per channel)

  • Formula definition for Paid Channels: Direct Marketing Fees (CPC/CPL) + Indirect Marketing Fees / # of Leads
  • Formula definition for Organic Search: Net New Content Indirect Marketing Fees / Net New Organic Leads
  • Department: Marketing/Sales
  • Frequency: Monthly/Quarterly/Yearly
  • Purpose: Evaluate the impact of your marketing investments by channel

Tip: You only need to know your total number of leads and your entire marketing budget to calculate your cost per lead.
The price-per-lead formula is straightforward. It’s as simple as dividing your marketing budget by the number of new leads. You may calculate your cost per lead (CPL) using this information.

To get an accurate outcome, you must consider the number of leads and the amount of money spent on marketing. As a Marketing department head is often a jack of all trades. It makes more sense to do this when it’s performance marketing (Growth Marketing Department). This is why we recommend to split Indirect marketing fees and direct marketing fees per paid channel.

  • Direct Marketing Fees are the CPC bid that you might pay to a platform like Google Search.
  • Indirect Marketing Fees are the time and content assets required to create and maintain that campaign.

I always say that a content/SEO marketing team has no impact on day-to-day leads. They create for the future.

  • New Net Content Indirect Marketing Fees: Cost per New Blog + Time for Integration + Cost if I need new Assets for Conversions.

This is why a lot of CEOs invest in Organic/SEO lead generation. Everything that you create will continue to generate leads even if you fire your whole marketing team. It will only slowly decrease due to the lack of maintenance.

Formula for calculating Customer Acquisition Cost

  • Formula definition: (Sales Costs + Marketing Costs) / Number of New Customers
  • Department: Sales/Marketing/Operations
  • Frequency: Monthly/Quarterly/Yearly
  • Purpose: Self-explanatory

Tip: To calculate Customer Acquisition Cost (CAC), sales and marketing costs are multiplied by the number of new customers acquired in a given period. One of the essential KPIs for investors is represented by this indicator. Understanding a company’s ability to grow and its profitability are two of the primary purposes of this tool.

Consider the lifetime worth of a customer (LTV) when calculating CAC. Return on investment (ROI) can be gauged using this criteria.

This is an important KPI for a professional services business. As it will give you the project size that you need to sell to break even. It doesn’t mean that you shouldn’t accept projects under that size. But it does mean that your team needs to be conscientious of customer value.

Formula for Website Audience Growth

  • Formula definition: (Users from the current period – Users from previous period ) / Users from previous period X 100 = (%) Period Growth Rate
  • Department: Marketing
  • Frequency: Monthly/Quarterly/Yearly
  • Purpose: Evaluate if my website’s content audience is growing.

Tip: There are several ways to measure the performance of your website (or business, for that matter) using KPIs. Still, the most common method is to look at the number of unique visitors that come to the site each month and the number of unique visitors that return to the site each month.

This KPI is good for following organic growth/lead generation and brand notoriety. You can use that as a starting point to measure your conversion rate.

Social Media Audience Growth Rate (Linkedin, Facebook, Facebook, Instagram)

  • Formula definition: (Net New Social Media Subscribers / Total Audience) x 100
  • Department: Marketing
  • Frequency: Weekly/Monthly/Quarterly/Yearly
  • Purpose: Evaluate if my social media audiences are growing and if my brand ambassadors are being enrolled.

Tip: Social following metrics evaluate the success of your social media distribution and brand ambassador engagement. An effective social media strategy is built on recognizing the correct variables (topic clusters, platform formats, push timing) for generating successful content.


As you delve into the realm of Sales and Marketing KPIs, remember that these metrics serve as your compass, guiding you towards a more prosperous future. Regularly measuring and analyzing these indicators will empower your team to make data-driven decisions, optimize campaigns, and ultimately increase your firm’s bottom line. Harness the power of these KPIs, and watch your professional services firm thrive in the market.

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