Sales Leaders: Help Your Team Win by Establishing and Measuring Key Performance Indicators (KPIs)
Sales Leaders: Help Your Team Win by Establishing and Measuring Key Performance Indicators (KPIs)
Another one of our 5 Keys to Sales Management is to know your numbers. What I mean by that is to know your sales metrics, sales management key performance indicators (KPIs), success formulas, etc. Let me take them one at a time.
Potential Sales Metrics
In every business that is successful long term the most important metric for
measuring the sales team is, well, sales! Whether sales are measured daily, weekly, quarterly or annually…top line revenue growth is critically import to a company’s health.
Here are eight of the most common sales metrics:
- Number of calls/Number of contacts
- Conversion rate of leads to sales
- Number of new opportunities uncovered
- Average order size
- Close rate
- Sales cycle
- Number of proposals issued
- Number of proposals won
Potential Sales Management KPIs
To be successful in sales leadership one has to inspect what they expect because after all…what gets measured gets done! Here are eight of the most common sales management KPIs:
- Size/quality of pipelines
- Forecast accuracy
- Customer satisfaction scores
- Customer retention numbers
- Sales by product category/Product mix
- Margins
- Percent of sales team at or above plan/quota
- New versus repeat business
Sample Individual Success Formula
The most productive sales leaders I know view themselves as a coach and are constantly seeking new tools, processes and concepts to motivate their salespeople to achieve their personal and professional goals. I suggest the following six components for salespeople to create their individual success formula:
1) Monthly revenue or sales quota
2) Average order size or revenue per customer per month
3) Close rate
4) Sales cycle
5) Number of qualified prospects required in their pipeline
6) The number of suspects needed to get to the right number of qualified prospects
These six components will help your salespeople know how many hours per week they should be dedicating to prospecting/new business development activities, how many hours they should be dedicating towards account management and how many hours would be available to complete their administrative activities.
