Grow Exeter | Aug 14, 2018 | 0
Sales Leadership | Everything you need to know about Sales KPIs
If you’re in Sales Leadership, you’ve probably heard the saying “if you can’t measure it, you can’t manage it”
It’s very true. You can’t manage what you can’t see. As a leader who’s expected to deliver results, sales managers and business owners need to make sure they carefully select some meaningful KPIs (Key Performance Indicators).
But before too long, you find you have 50 things to manage, some of which your CRM can’t produce reports on any more. And how many of them were once requested by the Finance Director who now doesn’t need to know anymore? Not to mention your sales team are increasingly aware that the number of plates they’re expected to spin is growing, which is confusing and causes the side-effects of another famous saying “Jack of all trades, master of none”
So I’m going to try and help you streamline your KPIs to just the things which make a difference to the performance of your sales team.
What are the main benefits of having KPIs?
- It’s easier to spot trends and opportunities for growth
- They highlight capability issues in your team so you can adopt the right training
- They also highlight variances in the drive and determination of your team
- It gives you a transparent platform for recognising great performance, and offering rewards
- You’ll feel more in control with consistent KPI tracking
Activity – Volume (or how hard do the team try?)
How many calls or meetings do your sales team do?
You’ll need this by each individual as well as for the team as a whole. You’ll also want to be able to look at specific weeks or months to spot trends over time. Think about showing results as a comparison to the average for the team, or the average for the month. Also think about setting a benchmark to help you make incremental gains over time.
Make sure that every individual inputs accurately into your CRM system – salespeople are notoriously bad at this so look out for errors.
Activity – Duration (or how engaging do your customers find your sales team?)
How much time do your sales team spend engaged in customer conversations?
If you have people who sell on the phone, you’ll need a telecoms provider who can report on the number of minutes spent on calls. Think about how long a call needs to be before it qualifies as an engaging call – 10 seconds is likely a ‘no thank you’, 3 minutes is enough for the customer to have been asked a few questions, 10 minutes is a good conversation and any longer than that is a really good sign you’re making great connections with customers.
Think about how long it takes to wait in a call tree. Consider staff who call their friends to grow their call time! (I’ve seen this done many times).
Conversion (or how good at selling are your team?)
How likely are your sales team to convert a sale?
This is a great metric for helping you to identify training needs. Maybe your entire team don’t need a refresher training course on consultative selling – it may just be one person. Either way, this will help you address performance variance where training is the cause.
Depending on the stages of your sales process, you may need to break down the tracking of conversion rates. For example, if you have an appointment maker who works on the phone, their sale is to sell the appointment. The person who does the appointment is responsible for the sale. You’ll want to know whether they convert in one appointment or two. Or does it take a follow up phone call to get the sale over the line?
You’ll need to track conversions for each salesperson, plus think about what the benchmark needs to be i.e. is it a comparison to each other or the team average?
Do you have different conversion rate benchmarks for different products? You’ve probably got some products which are far easier to sell that others. Think about how you might differentiate between the products and services that your sales team are responsible for.
Average Value of a Sale
Do you have sales staff who excel in high value sales? But others who only sell what’s on offer? Or they ask for a discount?
This metric can help you understand which of your sales people can sell multiple products in one sale. Plus you might identify pricing issues or skill issues. Again think about the benchmark you’re using – it should probably be a comparison to the team average.
Every business should measure how satisfied their customers are. It’s no good having sales people who can convert sales at high values if the customer is telling you that they found the sales experience disappointing.
Do you actively seek customer feedback? Where do you record it? Do you measure feedback given against the individual salesperson or is it general?
Think about how you use Online Reviews and whether customers willingly offer you Referrals to their family and friends.
It’s easy to over-complicate this part with hefty surveys and competitions. My advice is keep it simple. Could it be as straightforward as asking the manager to put in 5 random customer service calls per month to gain some insightful feedback?
Pulling it all together
If you’re unsure about how to create some meaningful reports, ask your accountant to help you. You’ll also need to make sure your CRM system offers you the ability to input the necessary numbers, as well as an easy suite of reports to extract the information you need from the back end.
The most important thing to do when compiling and tracking KPIs is to get buy-in from your sales team. Explain to them why you’re looking to track their performance figures, explain the required performance levels and comparisons and get their feedback. They probably know your CRM better than you do (as they’re using it everyday), and it’s highly likely they know how to play the system so make sure you think about fairness and consistency.
If you intend to use KPIs in your team’s Personal Objectives, and I’d always advise you do, then get HR involved so they can help draw up the most appropriate paperwork for you.
Thanks for reading – hope it was useful.
If you’d like some advice on Sales Strategy, then Momentum South West can help. We work with clients to build a sales strategy for them which delivers growth for their business. We consult every step of the way and can train out new strategies to staff. Our sales trainingand coaching gets five star reviews so if it’s an increase in sales results that you’re looking for, get in touch here.
Find our more about Momentum South West: www.momentumsouthwest.co.uk
By Rachael Howourth