Our ability to fall in love with metrics or sales KPI has increasingly become easier with the increase in CRM systems, fascination with big data and the cloud all combined to create a desire to track more and learn more.
However, as much as we’ve all fallen in love with the ability to use metrics to help us with business (think growth hacking and how that’s grown in popularity) we’ve also fallen into the trap of measuring vanity metrics.
For blogs, it’s number of visitors, for businesses it’s number of calls made per day – both just tiny examples of the world of metrics out there. Sales KPI is important, but don’t be fooled by just numbers.
Don’t get me wrong, they are all great and ultimately designed to somehow push the business forward however, as the metrics we measure and the data we use becomes more and more advanced we need to start looking into measuring metrics that present themselves as real life growth driving numbers.
What’s the biggest hurdle? These growth inducing metrics tend to be boring.
Thanks to the rise of tech startups that have been bought for billions solely on the basis of number of users we’ve all become attached to the metric too.
Instead of focusing on the ego boosting metrics it’s time to start focusing on the real numbers and data that will inevitably align with the goals you set within the company.
Some of the key characteristics of these Sales Key Performance Indicators (Sales KPI) are:
- Pushes your limits in a more focused way (total meetings VS total meetings with Managing Directors).
- Somehow pushes the individual/company toward a set goal.
- Focuses on delivering results that create real growth (again this refers to number of visitors VS conversion ratio).
- Honestly, there’s only one thing to remember when it comes to setting or choosing any sales KPI – If it drive’s real growth, measure it, align it.
Now to get into the nitty gritty of KPIs.
Below you’ll find some sales KPI examples which I’ve sourced via various online sources. I’ve picked them out and put them here because I feel as though they are the perfect KPIs every business should be focusing on, not only are they hyper targeted onto growth they are also highly focused on individual/company performance.
Funnel Development Sales KPI:
Number of Qualified Leads
When is a lead an actual lead? Even though there’s a generic fail safe as to what a lead is, a lot of companies have their own versions for predetermining just exactly what a lead.
With this sales KPI not only does it help to clarify the amount of business being produced, but it also helps to understand more about the business such as marketing that works and doesn’t, promotions that have results or internal changes.
Sales Cycle Length
This is far more focused on the level of performance and efficiency the company or individual has, however, one key aspect of this is that it shouldn’t be promoting sloppy customer service with speed etc.
When you understand the sales cycle’s length you can start to adjust targeted parts of the cycle ultimately creating something that’s not only efficient for you, but most importantly, it centres on the customers experience dealing with you.
Total Time to Qualify
Again, this shouldn’t be seen as a measurement of speed but instead a measurement of efficiency. It might be an idea to have this as a companywide metric rather than individual metric.
This should be a measure of how effective the qualification process is within the company and sales team, once that’s understood you can start to trim away at the pointless and train in the more effective parts. Part of the sales role is to also maintain a high level of customer service therefore, the less time a customer has to spend with you, unnecessarily, the happier they are.
Qualified to Proposal Ratio
This measure is truly vital to understanding how effective the sales person is at moving the customer along the sales cycle.
The sales KPI cycle doesn’t stop once the customer is qualified, it also shouldn’t stagnate here either. Another sales cycle mystery, especially in B2B sales, is the drop offs that occur once the customer is qualified.
Success and growth of a business isn’t determined by the number of people that are qualified therefore, your sales team needs to track their ability to move onto the proposal stage too.
Number of New Meetings per Month
The original source mentioned that this metric should be measured on a yearly basis, yearly tracking is a terrible idea so stick with weekly, monthly and quarterly tracking.
This could be seen as a vanity metric as meetings rarely determine a new customer however, it does help with understanding the sort of effort the sales team or individual is putting into the outreach process.
Combine this with the above metrics and ultimately you’ll be able to determine the effectiveness of whoever it is you’re tracking (personally I’m not a fan of using the word tracking when it comes to talking about individuals but it fits well).
Cold Lead to Qualified Ratio
Want to find your star salesperson? You look at this metric. The process is hard and is can be long too yet the professionals that can get it done are generally able to move along the cycle without problems.
Once you highlight this metric you can begin to determine why their approach works and how else it can be trained to others to experiment and explore.
In the Part 2, I’ll get into the general sales KPI one’s that can go across the board and determined to help better understand where the performance is lagging and where it’s working well.