Are Your Sales KPIs the Right Metrics to Reach Your Performance Goals?
As a manager, it is critical that you can set tangible goals and help your team to achieve them. Coaching along the way makes it easier to hit targets because it creates an opportunity to adjust and improve prior to reaching the end of the month or quarter. Creating and tracking sales key performance indicators (KPIs) is a necessary step in this process and it can make the difference between a stellar month or one that falls woefully short. After all, without tracking there is no way to improve performance until your month-end numbers are out.
Defining Sales Key Performance Indicators (Sales KPIs)
Your company should have a unique set of KPIs that are based on company-wide goals and objectives. They should be set annually and every employee should know what they are. For example, has your company grown to the point that you want to focus on customer retention? If this is your primary goal, a secondary goal may be to lose less than .05% of your customers each month. If your company goal is to increase your customer base by 120%, you may have a secondary goal for how many customers you need to acquire monthly. Understanding what these company-wide goals are, is the first step towards defining your KPIs.
Next, you need to get specific by looking at what it will take to achieve your goals on a monthly basis. There needs to be context that can be applied to employees within the organization. For example, what does it take to retain or acquire a new customer? What are the steps in that process?
Get Specific Regarding an Action Plan
Once you have identified your goals and the steps involved to get there, it is time to get even more specific. If your goal is customer growth, how many prospects does each team member need to contact in order to achieve that goal? If each team member needs five new accounts a month and the average closer has a ten percent success ratio, they need to have fifty prospects in the pipeline. You can break it down even further to include specifics regarding what it takes to get a prospect to the pipeline in the first place. For example, the number of calls, emails, letters, etc. This provides the basis for a working action plan that your team members can implement daily.
Your Action Plan and KPIs Are Linked
Your sales KPIs should mirror your action plan. If your sales team needs to make one hundred calls to get ten leads and acquire one new customer, then making one hundred calls a day could be a KPI. Your KPIs could also be things like follow-up calls, emails sent, etc. The key is to make sure that your KPIs support your objectives at the most basic, ground floor level.
Track Your Data
For your team to be successful in meeting or exceeding their KPIs, you need to be able to track what is happening and report on it. Daily, your team should know if they have made the right number of calls, etc. As a manager, this is important both for you and for them since KPI tracking allows you to make adjustments with how your team operates in order to improve efficiencies and make it more likely that goals will be met.
Sales KPIs You Can Track
There are certain KPIs that every manager should track on a daily or weekly basis. Included below is a list of the most important.
How quickly leads are responded to.
Your sales team should be responding to leads within one hour if they want to reach a decision maker and have the best chance of closing the deal. By tracking when calls come in, messages are left, or requests are made online, you can then track how quickly your team makes the follow-up call. If you identify that it is taking longer than an hour, working to shorten this time could result in a significant increase to your close-ratio.
Number of outbound calls.
Each day your sales team should be making a certain number of outbound calls in order to reach prospects. It’s all a numbers game so without picking up the phone, they will never hit their target for contacts. As a manager, you need to be able to pull reports and instantly see if your team is on track to make goal for the day.
Number of contacts being made.
If your team is hitting their target for number of outbound calls, they should be on target for contacts made as well. Tracking the calls-to-contacts ratio can help you to make improvements such as using an improved lead list or calling at different times of the day.
Around 80 percent of closed sales happen on the fifth follow-up or later. In the game of sales, follow-up calls are king and this is a critical KPI to track. Without it, all of the time that your team spends making outbound calls and contacts could still produce low sales numbers.
Tracking how successful your team is at closing the deal is incredibly eye-opening. You need to know if your team has what it takes to close the sale once the opportunity has been offered. If they are doing amazingly well at hitting all other targets, it may be time to revisit closing techniques and coach them to improved success.
Ongoing Tracking of KPIs is Profitable
Tracking the above sales KPIs on a daily and weekly basis allows you, as a manager, to make decisions necessary to improve the success of your team. You will be able to identify employees that need to be coached on specific steps, for example, being more diligent at following up with prospects. Doing this on an ongoing basis is key to being able to make adjustments in real-time. Otherwise, your numbers could suffer due to a delay of information.
Fortunately, our call center solutions are easy to use and make it possible to track your KPIs in real-time on a daily basis. Since our predictive dialer software is cloud based, you can see how employees are doing in your office or across the country.