Key Performance Indicators (KPIs) have been all the rage in business for years now. The idea is that you measure certain key things on a regular basis, to be sure that you’re improving – or at least that you’re not getting worse.
KPIs for operations include issues such as these: How many people did we serve? How quickly did we ship orders? How many items were rejected as being of poor quality? Many organizations regularly measure these KPIs and take action, fast, if the news isn’t good.
Why aren’t we applying that intelligence to sales?
The only KPI most organizations measure for their sales effort is “closed business.” That’s crucial, of course, but it’s after-the-fact. Either you closed business, or you didn’t.
When you measure closed business only, you don’t have leading indicators that your sales effort is in trouble! And without those advance indicators, and their trends over time, you don’t know where and how to apply extra effort.
You know the conventional wisdom: what gets MEASURED gets DONE. What can you learn from measuring Sales KPIs?
- Whether outreach to new prospects is lacking.
- Whether your problem is lack of follow-up with prospects.
- Whether the issue is poor closing skills (when you have lots of prospects and lots of follow-up, but not much money coming in your door!)
Within those categories, though, there are sub-categories that look at
- Whether penetration in client accounts is adequate or not – penetration is how many buyers you’re dealing with inside each client organization. For many businesses, relationships are built with only one buyer, when there may be other people within the same organization who can purchase what you have to sell.
- Whether the problem is inadequate follow-up on leads generated by Marketing.
- And whether the follow-up that is being done is being done systematically and methodically, and on a timely basis.
If outreach is lacking, often it’s because the organization’s leadership hasn’t made clear its expectations for this. If we contact only existing clients to look for new business, the lack of new blood in the pipeline may doom the future. But how much outreach do you expect? Be specific.
If we lack optimal follow-up methodologies, we are missing opportunities to close new business! We have data that says most prospects say NO 5 to 7 times before they say yes: if you get one “NO” and stop trying, you’re missing sales. An optimal set of KPIs for your business can be drawn from this list; select the categories that apply to your business, or measure them all, regularly, to ensure a consistent stream of sales – or the intelligence to know what’s wrong before your revenue drops.
Possible Sales KPIs
- Contacts initiated by a person in your company with a new prospect in a new company.
- Contacts initiated by a person in your company with a new prospect in a client company that may have additional revenue potential for your firm.
- Contacts initiated by a person in your company with a referral source. (A referral source is someone who will not buy from you themselves, but who can refer others to buy from you. Often these are bankers, accountants or financial advisors.)
- Follow-up activities completed by a person in your company with new prospects in new companies.
- Follow-up activities completed by a person in your company with new prospects in client companies that may have additional revenue potential for your firm.
- Follow-up activities completed by a person in your company with current clients that may have additional revenue potential for your firm. (This excludes client service conversations – talking about business that has already been sold. It’s only conversations with established clients about new business possibilities.)
- Follow-up activities on leads provided by Marketing.
- Follow-up activities completed by a person in your company with referral sources.
- Follow-up activities with prospective clients who reached out to your firm requesting information or a sales call.
- Pieces of new business closed.
- Dollar value of new business closed.
- Minutes spent face-to-face or phone-to-phone (F2F or P2P) with prospects. (We have data showing that time spent F2F and P2P is strongly positively correlated with success in selling.)
- Follow-up activities scheduled (most companies require those responsible for new business development to schedule dates no later than which they will follow-up with anyone who has not purchased—or purchased more, in the case of an existing client with additional revenue potential—from you, unless you have determined he or she is no longer a prospect).
Measuring Sales KPIs makes those who are responsible for new business development accountable for their efforts in that area. Not looking at, and responding to, Sales KPIs in order to drive revenue is like walking blind near a cliff and hoping to survive.
But you can’t ask your people to do all these things if they haven’t learned how to do them.
To ensure their success, and the success of your business, periodically provide your team with up-to-date sales training. The ROI on your business’ sales effort will grow in BIG WAYS, your team will stay relevant and effective, and your pipeline and new business numbers can continue to GROW. Outcomes of successful, up-to-date sales training should leave the people in your business who are responsible for business development engaging prospects powerfully, using the effective conversion techniques that we know are working NOW is selling. And, well-trained sales professionals will know how to implement and consistently replicate optimal follow-up activities that will add real value for their prospects. (Hint: phoning to ask what they think of your proposal or what questions they have is OUT.)