Transform Your Sales KPI's
If you've ever heard me speak about KPI's, you'll know that I think most sales KPI's are whack. In reality, I think most KPI's in general are whack, but for the sake of this article, we're going to focus on the sales ones.
Whether your a big business, or just starting out as an entrepreneur, you'll find lots of information on things you "should" track. For example, in this article by Hubspot, 28 KPI's that every field sales manager should measure are listed.
Now, as big of a fan of Hubspot as I am, let's take a look at these KPI's (which stands for key performance indicator) and discuss some of the reasons these metrics may not be driving the behavior that actually converts when it comes to sales.
The Top 7 Sales KPI's
According to the Hubspot article, these are the top 7 KPI's to measure:
Sales Volume by Location
Competitor Pricing
Existing Client Engagement
Employee Satisfaction
Upsell and Cross-Sell Rates
Sales Cycle Length
Customer Lifetime Value (CLV)
So here's the thing about each and every one of these metrics...they are RESULTS. These are the results you get by taking specific actions in the workplace.
By what are the DRIVERS that lead to these things?
Why does one location, or one activity create a greater sales volume? Why is our client engagement so high (or so low)? What activities are our team members taking that improve the CLV? What actions are WE taking as a business that drives employee satisfaction?
For each of these metrics, there are HUNDREDS of contributing factors. And if we don't ask the follow-up questions, and we become fine with "just tracking results", we'll never understand what actually drives those results.
So let's dig a little deeper and look at what we "should" be tracking on an individual rep level...
KPI's for Business Development Reps
Just an FYI...every single business has at least one business development rep. If you're an entrepreneur, it's YOU 😉
Ok, so now that we have THAT cleared up, here are some of the recommended KPI's from the Hubspot article:
Activities
Opportunities Created
Proposals Sent
Deals Won
Client Acquisition Rates
OK, the number one thing that is recommended that we track are "activities". AKA, the number of sales activities we are doing. But here's the problem with tracking activities...usually we aren't tracking the ENERGY in which the activity was DONE.
Let me give you an example. Let's say your target is to make 125 calls in a week. Or send 20 connection requests a day. Or bring back 10 business cards from a conference.
These are all targets someone else has given me at one point or another.
There's a lot of different ways you can say that you've accomplished these things. But just checking the box isn't the point...
WHY?
Because it doesn't drive the rest of the KPI's.
Ok, full example. You need to make 125 calls in a week. So you do. But you don't have enough time to research the recipients of the calls properly, so you have to sell instead of build a relationship. Plus, in order to get all the calls done in a week, you can't take a lunch break. So all the calls you make in the afternoon come from "hangry" energy.
At the end of the week, you made 125 calls. But were they WORTH it?
I've been on sales teams where people consistently meet their volume goals, but the company NEVER met their sales goals. So let me ask you this...
Is the number of activities ACTUALLY relevant?
Or is the effectiveness of the activities more important?
The Biggest Problem with (most) Sales KPI's
The biggest problem with sales KPI's is that people think it's all about the numbers.
And, for sure, if you aren't taking ANY action, then you're not going to sell anything either.
But unless we're looking at the energy in which people are showing up to complete the activities, tracking of the activities is a completely useless activity💡
And if too many people are spending too much time on useless activities, you'll continue to drive your employees away.
Which 100% doesn't work when you are the only employee. I'm looking at you entrepreneurs.
And big companies...how much time, effort, and money does it take to hire a new sales person? Now THAT's something worth knowing.
The Sales KPI Transformation
So, if you want to track all of these things, be my guest. I just also encourage you to track the things that drive the effectiveness of the activities. THAT's where you find the transformation.
It's a culture shift.
To believing simply in just DOING things, to exploring who we're BEING when doing those things. Bonus points if you take the time to understand each of your sales reps to the degree that you can support them in optimizing their process. Which is based in the individual ways they need to BE to make their process work.
Here's what it can look like:
OK, our goal is to make $5 million next year. This year, we made $3.5 million. Which means, we're looking for an additional $1.5 million. If our average project brings in about $25,000, that means we need 60 new projects next year. With 6 sales reps, that means 10 new projects per person. So, let's just round that up to one new project a month, per person.
(make sure what you choose sounds reasonable)
OK, team! What do we need to do to close one new project per month each?
STOP.
LISTEN.
Let them decide how many, and what kind of activities, they need to do to make that happen.
And then give them space to make it happen.
Yes. You might have to track different things for each sales rep.
Yes. You might have to give your team a little bit of trust in making it happen.
Yes. You'll probably need to re-adjust the numbers after a while to be more accurate.
And yes. You'll have a more engaged sales team that sells more.
That's the transformation.
We all know we need to do the work to get the results. It's no different for sales leaders.
The leadership team creates the SPACE for people to do their jobs effectively.
Or they don't.
Don't be the sales leader that doesn't.
If you're interested in learning more ways to make your sales activities online actually WORK, let's chat!
Bonus for Entrepreneurs
As an entrepreneur, YOU are your businesses best sales resource. Whether you have a lot of confidence in your sales skills or not, you're going to have to show up in a sales capacity.
It's critical as an entrepreneur to observe yourself in different scenarios. When do you feel confident making a sales ask? When do you not? Is there a specific type of person who makes you feel comfortable? Is there a specific channel you like better? In-person? Online?
These are the types of insights about yourself that are WAY more useful than just tracking the number of connection requests you send. Or the number of webinar attendees you had. Or the number of Discovery Calls...especially if those calls don't translate into business.
As a business owner, YOU get to decide what you track and what you don't. You get to decide what has meaning and what doesn't. So don't just mindlessly track things because someone (even a reputable someone) told you that you SHOULD. Figure out what makes sense for YOU, and then go with that 💖
