Four Steps To Choosing Smart Sales KPIs
KPIs—short for Key Performance Indicators—allow sales leaders to measure their sales team’s performance against sales and company goals. KPIs are valuable because they can help you understand if your sales team is headed in the right direction or if you need to adjust course.
When choosing KPIs for your sales team, it helps to engage in some discovery. That’s because KPIs look different for every sales team, notes Bob Marsh, founder and CEO of LevelEleven. In this issue of Promotional Consultant Today, we share Marsh’s four steps for selecting the best sales KPIs.
1. Prioritize leading over lagging. Marsh points out that most sales leaders look at the final sales number, which is a lagging indicator. However, the sale is a result of everything that came before it. These leading indicators, which include things such as meetings, booked demos and sent proposals, are all activities that led to the desired outcome. While revenue is always important, it’s critical that you think about the leading indicators that get you to the sale.
2. Develop a theory. The next step in choosing sales KPIs involves brainstorming what you think might make smart KPIs. In addition to thinking about your ideal buyer, Marsh suggests asking questions like, “What do our prospects’ preferences and processes look like?” and “What are the day-to-day activities we can perform to align with those preferences and processes?”
3. Talk to your sales reps. Before narrowing down any KPIs, be sure to have a conversation with your sales reps. They’re on the frontlines every day with prospects and clients, so they can provide insight into what is leading to their success. Marsh says you can even think about asking different questions based on sales reps’ performance levels. For example, you could ask:
- Top performers: What do you focus on that your peers don’t? Why do you think you’re a top performer?
- Middle performers: What are you doing that is most important? How do you keep track of it? Think about team members who perform really well. Why do you think they perform so well?
- Bottom performers: What do you think your peers are doing that you should be doing? What would you like to learn more about?
4. Refine your theory. In the second step, you created your initial theory on what your KPIs might be. Now it’s time to consider the feedback you received from your sales reps and look for trends. For instance, did you notice a metric or activity arise repeatedly? Use what you learned to validate your original KPIs or revise them. You might also want to run your KPIs by other leaders in your company to get some different perspectives.
Creating the right KPIs takes some thoughtful consideration and research. While many sales leaders emphasize profits, you should also consider the prospecting activities that landed the sales. Interview your sales reps so you can understand what they face in their jobs and what kind of pushback they receive. You can then use their feedback to map out the KPIs that are best for your team.
Compiled by Audrey Sellers
Source: Bob Marsh is the founder and CEO of LevelEleven, a company that helps VPs of sales improve their team’s performance by keeping salespeople focused on the daily behaviors that drive revenue.