12 Essential 3PL Sales KPIs to Increase Revenues & Profits

What Are 3PL Sales KPIs?

3PL sales KPIs are metrics used to measure the performance of the sales organizations and each team member tangibly. It helps to understand if sales processes and team members are effective and/or if they are on/off track to meet their sales goals. It helps them to determine what to maintain and where to improve. These KPIs help 3PLs make intelligent business decisions about their sales efforts.

RELATED: The Ultimate Guide to Logistics Sales

Importance of KPIs in 3PL Sales

Tracking 3PL sales KPIs is crucial in the 3PL industry. These indicators provide a measurable and objective way to track your sales progress.

Neglecting to track these KPIs can put your 3PL business in a blind spot, leaving you unaware of your sales team's performance. Without these KPIs, your sales team will lack proper direction.

Tracking your 3PL sales KPIs is essential for the following reasons:

• Increase in Sales and Revenues. By tracking 3PL sales KPIs, you are also tracking your logistics sales performance. These KPIs allow you to pinpoint areas to optimize your sales efforts. Instead of focusing on all business aspects, these KPIs enable you to concentrate on high-converting areas where you target your clients with high conversion rates, leading to increased sales and revenue.
• Forecasting and Predictions. Since these logistics sales KPIs show you the impact of your sales efforts, they also help you forecast future trends and outcomes using the data they provide. They also allow you to adapt swiftly to market changes by identifying sales patterns or customer behavior shifts, enabling timely strategy adjustments.
• Performance Evaluation. 3PL sales metrics are performance indicators of your sales team. These KPIs offer insight into whether your sales team is hitting its sales target. Tracking these KPIs enables you to decide if interventions or adjustments are needed.
• Sales Team Empowerment. Good performing KPIs motivate your sales team to hit their sales target. With the help of 3PL sales KPIs, they have clear goals and can focus their efforts on what matters most for achieving your business objectives.

RELATED: 6 Best Practices to Increase Sales in a Logistics Business

Therefore, regularly monitoring 3PL sales KPIs is one of the most practical ways to ensure you make the right decisions for your logistics business. Take a look at the 12 essential 3PL sales KPIs, starting with the basics.

The Basic 3PL Sales KPIs

1. Revenue

Revenue helps you determine how much money you have generated in a particular period. It enables you to measure business’ revenue growth and revenue generated by a salesperson.

2. Gross Profit

This KPI measures the total gross profit you earned after deducting direct cost associated with generating revenues (cost of goods sold).

3. Net Profit

Net profit is the profit you earn after subtracting all costs of goods sold and expenses from revenue. This includes COGS and operating expenses, such as supplies, marketing, travel expenses, etc. Net profit is often known as the bottom line.

4. Deals Win Ratio

The deals win ratio is the ratio of won deals compared to the total number of deals created during a specific period. It is the success rate in converting sales opportunities into won opportunities (the percentage of deals you win).

5. Average Deal Size

The average deal size reflects the average dollar amount of all the deals in the sales pipeline (open and closed). It is calculated by averaging the revenue of deals in the pipeline.

6. Average Closing Time

The average closing time is the average time it takes to close deals. This is obtained by measuring the time between when a deal is created until closed (won or lost). It is an average of all the deals’ closing times.

7. Sales Activity Index

The sales activity index is the aggregation of your sales team's core sales activities. There are three main types of sales activities:

• Sales calls
• Sales meetings
• Sales emails

This allows you to associate sales effort with sales output. In other words, is your sales organization working harder or smarter?

If you’re looking to track the above-mentioned basics sales KPIs, we have a CRM specifically engineered for 3PLs that can help you measure and visualize these KPIs.

3PL Specific Sales KPIs

8. Lanes Won

Lanes won is how many lanes customers have accepted out of the total number of lanes requested. A lane refers to shipments being transported from one point to another, for example, from Miami to Chicago. Lanes won are usually broken down by mode of transportation, such as full truckload (FTL), less than truckload (LTL), intermodal (IM), full container load (FCL), less than container load (LCL), and air.

9. Profit Margin by Lane Type

This 3PL sales KPI can help you understand the profit margin you gain from each transportation mode. Getting a profit margin breakdown is critical to understanding which lane type or transportation mode delivers the most profit. This is so you can pay more attention to the most profitable transportation mode and increase your company’s profit margin.

10. Lanes Win Ratio

The lanes win ratio is a 3PL sales KPI that helps you assess how many lanes you are winning compared to the lost ones at a lane level. Tracking this 3PL sales KPI will help you understand what the lanes that you tend to win or lose the most are.

11. Shipment Frequency

Shipment frequency is a 3PL sales KPI that allows you to track the shipment count of a customer in 30-day increments (30, 60, 90 days). Knowing these numbers would allow you to understand the shipment trend of your clients and see if they are consistently tendering shipments with you or taking their business somewhere else.

12. Customer Rankings

Customer rankings are essential 3PL sales KPIs that allow you to rank your customers through different criteria. Ranking your customers helps determine who to prioritize to ensure their business stays with you. You can rank customers in the following ways:

a) Customer Revenue Rank

Ranking customers by revenue is a simple 3PL sales KPI that allows you to rank all your customers according to revenue generated. This KPI is critical to understanding the most crucial customer from a revenue generation perspective.

b) Customer Profit Rank

Customer profit rank is one of the most important 3PL sales KPIs you want to monitor because it has a direct impact on the bottom line of the business. It allows you to rank your customers according to the profit generated. This ranking differs from revenue rank because the highest revenue-generating customer may or may not be the highest profit generator.

c) Gross Margin Rank

Gross margin rank is another essential 3PL sales KPI that enables you to identify the customers that generate the highest gross profit for your company. This is another important KPI because it allows you to understand the profitability of a customer after direct costs (COGS) have been deducted and before expenses.

d) Shipment Count Rank

By tracking the shipment count rank 3PL sales KPI, you can identify the customer that ships the most with you, regardless of revenue generated or profits.

The best customer ranking is a mix of all these ranking types. Customers that rank high among these four KPIs should be given the most importance.

Conclusion

3PL sales KPIs are essential to maintain and improve your business’ health and sales team performance. Tracking these KPIs can help you make informed and short- and long-term financial decisions and/or investments to continue growing your business.

If you'd like to track the above-mentioned KPIs effectively, we have a CRM truly built for 3PLs that can measure and visualize these KPIs.

Thank you for reading our article. For more educational content, you can explore all our blogs here. You can follow us on LinkedIn, Twitter, or Facebook to get supply chain industry trends and efficiency tips. If you have other inquiries or suggestions, do not hesitate to contact us through this link.