An organization is rudderless without thoughtful KPI implementation. Understanding and leveraging a KPI’s value makes the difference between exce lling and underperforming quarter to quarter.
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How KPIs drive, structure, and inform our sales teams
Key performance indicators, or KPIs, are integral benchmarks planned out and executed with diligent collaboration from teams across your organization. Without KPIs, your company functions in a vacuum devoid of a strategic organizational journey. Aimless workflows scatter teams and obscure collective purpose that divides teams from the inside out. Have no fear, as these company-wide chasms can be avoided by setting SMART (more on this acronym later) KPIs. With KPI data in hand, first-time and career managers can identify underlying proficiencies and deficiencies to flex depending on their effects on profit and revenue.
“KPIs provide visibility into why certain teams excel, why certain markets and locations should be business focal points, and where customer engagement spikes in the sales pipeline,” says Stephanie Staiano, ProSearch Sales Director.
The true KPI tracking possibilities are endless with creative management, so you need to determine which ones are most crucial to your business before committing to a batch of determined indicators. Recording KPIs does take some time to build a healthy sample size off which to make decisions, so starting with identifying those impactful stats is a must.
How to choose effective KPIs
Not all KPIs are treated equally, and you need to strategically decide which ones are most impactful to your profit margins. If you’re a high-volume contingent labor provider, activity and outreach on the candidate pool development side should be a focal point. If you happen to be a Salesforce integration service, you should track upsell and cross-sell rates to expand software offerings as your products transform and mature.
A helpful rule of thumb is to start with the SMART approach; that is, to decide on specific, measurable, achievable, relevant, and timely KPIs for your business unit. These KPIs should be broken down further and specified for individual teams like business development, sales development, management, and marketing to personalize each set of objectives according to each team’s function.
Holistic KPIs to start with
There are accessible KPIs that you can start with that apply to all teams before you get granular. These should be implemented, and at the very least should provide blueprints for how to specialize KPIs team-to-team.
1. Average deal size
– This indicator should be measured to identify where your largest wins are coming from and how to refocus business initiatives where the effort is most highly rewarded.
2. Activities
– Activities include everything from outbound calls, emails, DMs, and other outreach from meetings scheduled and queries fielded from existing and potential customers. This indicator has a ton of flex for any team looking to identify touch points and success factors.
3. Sales per rep
– This is the go-to KPI to ignite friendly competition and motivation among sales teams. Managers should also use this metric to promote the career trajectory of an early-stage salesperson in a high-volume market.
4. Lead conversion rate
– This is the percentage of all leads that eventually convert to deals or sales. Managers can use this to track sales cycle efficiency and can dig deeper into more specific KPIs to find bottlenecks in the customer journey if the conversion rate is low.
5. Average sales cycle duration
– This indicator is the average amount of time from initial customer interaction through sale close. With repeated monitoring, companies can locate efficiencies and shorten the sales cycle for a shorter duration that’s just as comprehensive.
6. Customer acquisition cost
– This indicator tells managers how much it costs their business to bring in one new customer. Companies should factor in all expenses including salaries, overhead, and other expenditures for an accurate figure.
7. Customer retention rate
– This indicator measures the rate at which customers stay with or renew subscriptions or SOWs to your product. The higher the rate, the higher your return business and as a result, the higher your customer lifetime value.
8. Sales by contact method
– This is an important metric when determining which tools and methods to invest capital in for outreach. Understanding your client will help shape this KPI and you’ll soon be able to determine if email, cold calling, direct messaging, paid ads, educational content, or another method works for a particular market.
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To implement the best executive talent and leverage the most-comprehensive industry data, partner with CSS ProSearch, an organization with an extensive network of sales, marketing, and executive business professionals. With a focus on technology, consulting, and healthcare verticals, CSS ProSearch provides the finest talent and opportunity through seamless recruitment processes. Connect with CSS ProSearch today to attract top managerial talent!