• Metrics and KPIs
  • Five Sales Indicators

Sales indicators are the numbers you track to see whether your sales are moving toward your goals: how fast revenue is growing, how much each customer brings in, what it costs to win a new customer, and what share of customers come back. OpenStax's Principles of Marketing calls the ones tied to goals key performance indicators (KPIs), "quantifiable measure gauging a company’s performance against a set of targets, objectives, or competitors". You use them to spot a change early and decide what to do about it.

Billed publishes this page. Definitions and formulas are quoted from OpenStax, Principles of Marketing, section 2.4 and chapter 2 key terms, opened on October 30, 2026. The page gives no targets or industry benchmarks; set your own from your past results.

Metrics and KPIs

OpenStax's section 2.4 draws the line between them: "Metrics measure the performance of a particular process; KPIs are directly tied to business objectives and have targets and specific time frames for achieving those targets."

So a sales indicator becomes a KPI when you give it a target and a date, such as revenue growth for the year.

Five Sales Indicators

  • Revenue growth. OpenStax: "Sales and revenue growth is a KPI that is used to determine whether sales and revenue are increasing or decreasing over a specified time period." Its formula divides this period's revenue by the last period's, subtracts 1 and multiplies by 100.
  • Average revenue per customer (ARPC). OpenStax: "total revenue divided by the number of customers."
  • Customer acquisition cost (CAC). OpenStax's chapter 2 key terms define it as "the amount an organization invests in attracting a new customer". Section 2.4 says it's "calculated by adding up the cost of sales and marketing efforts and then divided by the number of new customers acquired during a specific period."
  • Customer retention rate. OpenStax: the KPI "measures the percentage of customers in the current period who have purchased in the past."
  • Gross margin as a percentage of sales. OpenStax describes gross margin as "the percentage of sales revenue that the company can convert into gross profit". For how to work out gross profit and margins, see what is gross profit and how to calculate profit margin.

Choosing the Period

Compare like with like. OpenStax notes that "for companies whose revenue is affected by seasonality (such as companies that produce snow blowers or bathing suits), it may make more sense to measure growth in revenue on a monthly or seasonal basis, as compared to the previous season."

Worked Example: One Year for an Online Shop (sample figures)

These are sample figures for a fictional online shop, invented for this example.

  • Revenue: $168,000.00 this year, $150,000.00 last year
  • Customers who bought this year: 400, of whom 120 were new and 280 had bought before
  • Sales and marketing costs this year: $9,600.00
  • Gross profit this year: $67,200.00

The indicators:

  • Revenue growth: ($168,000.00 ÷ $150,000.00 − 1) × 100 = (1.12 − 1) × 100 = 12%
  • Average revenue per customer: $168,000.00 ÷ 400 = $420.00
  • Customer acquisition cost: $9,600.00 ÷ 120 = $80.00
  • Customer retention rate: 280 ÷ 400 × 100 = 70%
  • Gross margin as a percentage of sales: $67,200.00 ÷ $168,000.00 × 100 = 40%

On their own, these numbers don't say whether the year was good. Set a target for each one, then compare next year's figures with this year's.

Where Billed Fits

Billed's financial reporting page says: "Billed offers several built-in reports: Invoice Reports (paid, partially paid, and overdue), Expense Reports, Income vs Expense Reports, Top Selling Products, and Time Tracking Reports." It adds: "Each report can be filtered by date range and exported." You can use a date range to compare the same period in two years.

When This Guide Isn't for You

If you report sales figures to investors or lenders, or a contract or bonus depends on them, ask your accountant how each figure should be defined and calculated.

Related Guides

FAQ

What is a sales indicator?

A number you track to see how your sales are going, such as revenue growth or average revenue per customer. When it's tied to a target and a time frame, OpenStax calls it a key performance indicator (KPI).

How do you calculate revenue growth?

Divide this period's revenue by the last period's, subtract 1 and multiply by 100. In this page's sample, ($168,000.00 ÷ $150,000.00 − 1) × 100 = 12%.

What is customer acquisition cost?

OpenStax defines it as "the amount an organization invests in attracting a new customer": sales and marketing costs for the period, divided by how many new customers you gained in it. In this page's sample, $9,600.00 ÷ 120 = $80.00.

What is a good value for a sales indicator?

This page doesn't give benchmarks. Set a target for each indicator from your own past results, and compare the same periods over time.

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