Sales KPIs: A Guide to Succeed in Data-Led Business Environment
In today’s competitive business world, efficient sales management is one of the areas that depends on the particular set of numbers. So, when you tempted by the variety of data available, you most likely try to measure everything at once. As a result, you end up with a bunch of outcomes that provide no useful or actionable insight for your business performance.
Let's say it is not a problem to obtain the clear metrics like monthly or quarterly revenue as well as close rates. However, these numbers can only give you the final score, without telling anything about how your team played the game. Thus, if you want to build a truly successful sales strategy, the trick is selecting the proper key performance indicators for your company. So, let’s go over the main sales KPIs that help you measure different aspects of business processes as well as the fulfillment of each member of your staff.
What Exactly are KPIs?
Even though the term KPI is commonly used, it is not always understood in the right way. Something can be defined as KPI when:
It is important or the key to the success of your company. For example, is it critical to identify the conversion rate per quarter for boosting your business achievements?
You can clearly measure and qualify your data, and it can be related to performance. So, assume you have a benchmark that identifies that if you make at least 5 contacts with executive level clients during the sales process, the value of the final deal will increase by 40%.
You get an opportunity to use it as an indicator to provide the leading info and future outcomes. For instance, one variant of 80/20 rule states that 80% of sales results сomes from the activity in 20% of the accounts. Thus, if you track a specific amount of calls and time spent with high-value contacts, you can set specific goals that can be measured.
To wrap up, KPIs are metrics used to track the performance of business, a department, or individuals against the objectives of your company.
Why KPIs are so Powerful?
As mentioned above, it is critical to find the proper sales KPIs for your company to meet and exceed the desired results. However, in order to use the indicators to its full potential, firstly, you have to understand the importance and purpose of them:
Help you make the right decisions. You can’t rely on assumptions and hope. You have to operate and access the accurate data to be confident in what you sell as well as take the actions in the proper time.
Drive better team execution. Identifying, measuring and coaching to the right KPIs leads to better behavior change and skill improvements among all employees.
Set up expectations and enhance communication. The indicators help clarify the actions you should be focused on and provide the relevant context to interact with the potential customers.
Make your activities consistent. As people sometimes don’t do what is expected, they would rather work with something inspected. So, when you understand what you have to analyze every week, you get a bigger chance to perform these practices.
Eliminate the guesswork out of the evaluation. As a business owner, you have to track staff performance against KPI metrics. In other case, you don’t really have the objections to investigate how your employees work and improve. They might stay busy and give 100% effort every day. However, it can be confused with real productivity. Tracking KPIs helps you make sure the sales reps are spending the right amount of time on the proper activities.
Establish effective coaching. It is well-known that training of your workers is important. Yet, education is useless, if it is not based on quantifiable, actionable skills and behaviors. Taking advantage of KPIs enable you reveal the information whether your employee is doing well as well as how you can support them to perform better. Furthermore, you can access KPIs from your CRM for every worker and use the data to customize the conversations that will address the gaps.
How to Stay on the Competitive Edge with 4 Main KPIs?
Many people face an problem of failing to derive significant conclusions from the numbers they receive. Utilizing the right kind of tools is only a half of the task, you should also be able to use them properly. Hence, we’ve narrowed down a list of commonly implemented KPIs we believe they are most important for boosting your business performance.
1 - Conversion Rate
The conversion rate is the threshold of all essential KPIs. It is totally build on the outcomes, as it calculates the percentage of visits that result in desired closed deals. In other words, the conversion rate is the number of new customers divided by the amount of qualified leads.
The most effective choice to analyze the rate is segmenting it. For instance, you can track how your acquisition strategies are converting or divide the indicator depending on the consumer type. At this point, you can determine where the desired results are coming from. It is also recommended to investigate different kinds of conversions. Let’s say, in addition to the standard visitor to consumer conversion, you can also measure the lead to customer or prospect to client. In this case, you will get more useful insights on the sales funnel.
Besides, it is recommended to look at other numbers along with conversion rate to have the percentage in context. Some of the most critical indicators to compare it against is website traffic and outcomes like revenue. In this case, you can understand the shifts in conversion rates as well as make effective rational decisions on what sales and marketing strategies to pursue.
2 - Total Gross Revenue Comparison
Total revenue is one of the most basic, yet fundamental indicators for each organization. It is based on actual funds accomplished by the company. Accordingly, it is useful for measuring the turnover of the company over extended periods of time. Also, try to segment this index and look at more specific pieces of data. For example, you have an opportunity to utilize Total Gross Revenue Comparison indicator and compare the incomes from up to 5 various products of your choice.
3 - Pricing Against Competitors
As a business owner or sales manager, you should not control each move of your contenders. However, you have to be aware of the pricing options to create a competitive strategy. If your costs don’t differ much, you can hold on to the price-matching plan to assure your customers with lowest spendings and you with most sales. Furthermore, keeping track of the average value of your product or service, you can measure the influence of cutting the costs or implementing a promotion.
4 - Employee Satisfaction
As a company owner, you have to make sure your sales representatives are motivated and enjoy their activities on the daily basis as well as job overall. In this case, staff feedback is crucial. So, try to ask your workers to rank their satisfaction on the numeric scale along with qualifying questions about their performance. In this case, you can understand the challenges your employees face, and then juxtapose the results against your goals.
There are many other beneficial KPIs to help you accomplish an efficient sales strategy. To sum up, check out a few general suggestions on how to use them properly:
Base your indicators on activities, not just outcomes
Use the KPIs as the question prompt rather than an answer
Equip your sales team with right tools to track and manage the KPIs
Finally, although there is always room for exploration, you need to stay focused and consistent. Some of the insights and improvements can not be accomplished without tracking the particular indicator over time.