The sales KPI’s you need to measure, and why!
Don’t let anyone tell you any different, selling is always about the numbers.
The verb “to sell” is described in the dictionary as the exchange of good and services for cash. So if the main aim of the process ends with achieving a number then surely other numbers must be involved to complete the process.
What is a KPI and do you need them?
A KPI or Key Performance Indicator is a measurable value that demonstrates how effectively a company is achieving key business objectives. Organizations use KPI’s at multiple levels to evaluate their success at reaching targets. Measuring your sales key performance indicators is essential for any kind of sales success.
So why are you avoiding sales KPI’s?
Do you just set a sales number you want to hit at the end of the month and that’s it?
Do you fear your prospect saying no, so you don’t count how many times you connect with them?
Do you really know how you hit the sales you made last month or even last year?
The list of questions I could ask is endless, but if you do not have any sales KPI’s in your business, then you are truly putting your business at risk. If you can afford to do that, then fine skip the rest of this post. However, if you can’t afford to risk a down turn in sales then carry on reading.
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Sales KPI’s are fun
Trust me. Once you have identified and started monitoring the sales KPI’s for your business then I promise you that selling becomes a lot more interesting and fun to do.
Imagine that your sales KPI’s are like the ingredients for the best ever cake in the world. Once you know the ingredients to use and the quantities that you need, as long as you learn how to use them, then you will always make the best cake ever!
Sales KPI’s really are like that. Once you have identified the best ones to use and the numbers you need to be achieving for each one, then all you have to do is go sell to those numbers. Any blip in the results and you go back to the recipe and see what you did differently, understand why, then go back and try again.
Trust me, numbers are sexy. Especially when used correctly so they are converted into cash!
However, there is always a bit of confusion around which numbers you should be measuring and why. Many think it is all about the revenue and profits, but there are other statistics that you should be monitoring to ensure that your sales are always heading in the right direction…skywards!
My Top Ten Sales KPI’s you must be counting
Marketing activities – What marketing do you do and how often do you do it? List the numbers for general advertising, social media, networking, referrals and even cold calling. Basically it’s anywhere you get your leads from.
Qualified leads – These are the people that you know have a need for what you do, but at the moment you are not sure what the exact opportunity is. These are your warm leads, but not hot opportunities that you need to put more effort in to get a sale.
Qualified opportunities – Counting the number of qualified opportunities you have is key to achieving your sales target. These are the leads that have a very real current need for what you do.
Outbound phone calls – List the number of calls to clients you make so you can consider how many you actually do to achieve a face to face meeting.
Face to face meetings – These might not always be face to face as meaningful conversations can happen over the phone or online too. They are essentially sessions with a customer when you are working on a hot opportunity.
Proposals – Listing the number of proposals you make to prospects is really key to turning them into happy clients. Depending on your business it might be a simple verbal proposal or a complex bid document.
Number of follow ups – How many times do you contact a customer for their decision? Any more than three attempts to follow up on a proposal could mean a problem earlier on in the sales process.
Closed sales – Always the best sales KPI to monitor. However, any change up or down must be acted on immediately. If this number goes down you have a problem in the sales process that needs resolving. Conversely if it goes up, then finding out why and replicate it to dramatically grow your business.
Product split – Count the split between products or services if you have more than one. Don’t assume you know what your customers really buy from you.
Cost of sales activity – Probably the most important sales KPI after closed sales. If it costs you a lot of money to get to a sale, then review to see if your sales process is as effective and efficient as it could be. Getting to a sale quicker will reduce your overall cost of sale, so any activity that helps you speed up the process will make you more money.
Every business is different, but these sales KPI’s are a good starting point. If the sales KPI doesn’t feel right then change it for one that does. Having said that, make sure you have measured it correctly before binning it.
Setting SMART objectives and getting your sales strategy in place will help you identify the best sales KPI’s for your business.
However, if you already believe that you have the right sales KPI’s, but your numbers are down then training might be where you need to focus. Try my free sales training to help you uncover more sales opportunities.