Key Performance Indicators for Sales Performance!!
Key Performance Indicators for Sales
According to the Lucidchart Content Team (2021) key performance indicators (KPIs), are leading indicators that help sales reps and their leaders gauge how effective their efforts are. Sales KPIs are the metrics by which you will evaluate your team’s performance against your sales and organizational goals. You need to separate the easy to love “make you feel good” vanity sales metrics from the tried-and-true key performance indicators.
Modern companies focus on month-to-month product and service offerings, which means that sales teams are no longer judged by landing huge once-off deals. Instead, sales are judged by how well they consistently turn interested sales qualified leads into happy monthly customers. Happy monthly customers that stick around for as long as possible, and possibly upgrade to more premium features as their needs or company grows.
Suggested KPIs for effective measure:
According to Insights Squared (2021) we need to change our thinking to gain a better measurement and understanding of our sales efforts:
1. Activity Levels vs. Call Efficiency
Instead of just hitting a number of targeted calls you need to look at how many of these calls were actually converted into connects, connects to meetings scheduled, and meetings to opportunities sourced.
2. Total Bookings vs. Won/Lost Ratios
The numbers at the end of each month shows how many deals each salesperson closed. However, it is just as important to understand lost deals. If you are looking to drive improvements in the sales process, you need to see and understand both closed and lost deals. Lost deals could mean some sales training is required in a specific area which could hold huge benefits.
3. Total Pipeline vs. Pipeline Flow
Measuring total pipeline is typically a vanity metrics, you do not know how many, if any of the deals will be closed in the pipeline. You need to measure and understand the pipeline flow: length of your typical sales cycle and your conversion rates. For example, a long sales cycle could mean that you will only close a deal next month. With a low conversion rate, your original total pipeline number now looks much smaller. Your team should forecast more accurately and hit goals more consistently.
Sales Managers: Tracking sales funnel performance
One of the best ways to drive sales performance is to track the quality of your leads through each stage of your sales funnel. This process is especially important for sales leaders who need a high-level understanding of the team’s sales process.
1. Conversion rates
2. Visitor-to-lead conversion rate
3. Lead-to-MQL conversion rate
4. MQL-to-SQL conversion rate
5. Opportunity-to-customer conversion rate
Final thoughts:
It is important to note that what you measure your team by is what they will focus their efforts on. By measuring the right sales KPIs, you can optimize your sales process and ensure you and your team are prioritizing the right activities for success! In order to make a complete picture of your sales development and data, Data Pine (2021) suggests a sales dashboard that will centralize your KPIs and enable you to dig even deeper. That way, you will be able to control your sales activities, identify potential bottlenecks, and optimize your sales processes more effectively. Besides online reporting software there are free Excel KPI dashboards you can download online.
Reference:
· Data Pine. Sales Key Performance Indicators and metrics. Retrieved on April 10, 2021 from: https://www.datapine.com/kpi-examples-and-templates/sales
· Insights Squared. ‘Sales Metrics: Vanity vs. KPIs’ Retrieved on April 10, 2021 from: https://www.insightsquared.com/blog/sales-metrics-vanity-vs-kpis/
· Lucidchart Content Team. ‘What’s in your pipeline? The 13 most important KPIs for sales success.’ Retrieved on April 10, 2021 from: https://www.lucidchart.com/blog/sales-kpis
· YouTube: What is a Sales KPI Dashboard? | Pipedrive. Available from: https://www.youtube.com/watch?v=QNB_lJNAg1Y
