- I'll admit it, I'm one of those sales people
who really loves data and sales metrics.
It probably comes from the fact that
when I first got into sales we had
such a scarcity of detailed numbers to work with.
But now I love having access to so much.
Back then our key performance indicators,
or KPIs, were limited to just a few that were
generated by the corporation,
while the rest came from sales representatives
own systems.
Others were subjective, based on what our manager
felt was important to review.
We've come a long way, and now with updated
corporate systems, new account tracking programs,
and terrific customer relationship
management software,
we can track and utilize so many different metrics.
You can get into such detail and analysis
of the entire sales process with remarkable precision.
The only caveat is that it's great to have detail,
but you have to have a reason for retrieving it,
and not forget that the
number one metric is revenue versus quota.
The amount of trackable KPIs can be enormous,
and many are linked to the existing fields in your CRM.
You can also create ones of your own.
It's wise to focus on a smaller amount of metrics initially,
and expand it if you need or want more detail later on.
The risk is being overwhelmed with data.
You also need to invest time to educate
not just the sales organization, but everyone with access
to information about the terminology being used.
I think this communication will save you a lot of headaches,
as I've heard more than a few discussions about
what a lead really means.
Here are some of the more commonly tracked KPIs
and a quick definition.
Revenue and expenses, these should be the first
on everyone's list, and since they are so important,
there are separate movies included with this course.
Lead, is an individual or potential
account that needs to be qualified as having real
sales potential.
This is the initial phase,
you can tie in prospecting with this.
Lead response time, each company has a target time frame
to respond to a new lead.
If it's within 24 hours, a red flag is going to appear
quickly with this measurement.
Opportunities, I like this one,
since it now tracks some potential real business
with revenue tied to it.
Stage and weighting, your sales people provide
their views of the opportunity
along with the estimates by percentage of it actually
becoming a sale.
This measurement takes time to refine.
New account opened, this links with new business and taking
a lead to a new customer status.
Close/win rate.
I like to track this one
since it ties so closely to revenue.
We're going to review this in another movie in this course.
Actual deal size, how big are the sales being generated?
Size per order etc.
This is another valuable measurement field.
Sales cycle length.
Some sales people can get from a lead to a close,
faster than others.
It can be a real eye opener.
Sales representative ranking.
This have been used for years well before CRMs.
It's a spreadsheet or chart, showing where each salesperson
ranks by closed sales.
However today, more fields can be added.
Attempts, calls made, and conversations.
These tie to those salespeople with cold calling,
prospecting or telephone direct sales responsibilities
and are important metrics to monitor.
There are so many metrics that can be extracted
and tracked from your CRM, or other account systems used
for performance measurement.
How detailed and in depth
you want to get depends on your
business and personal preference.
Your ability to measure and report on your activities,
is so much more sophisticated
that it was in the recent past.
There is a danger though, of analyzing too much data.
And focusing too closely on metrics that,
although important,
aren't critical.
As managers we must never lose sight that the KPI
that drives our business along
with our success or disappointment is revenue versus quota.