KPIs (Key Performance Indicators) rule many sales leaders’ professional lives. Sales leaders have to answer to the executive team, to peers, to the Board of Directors, and even to their own team of sales professionals, and they form those responses by gathering data and making observations.
Through a series of trial and error and many talks with the Sales Operations team, a sales leader usually determines the most important KPIs to track throughout the year and throughout each quarter and in most cases, each month. As we discussed in a previous article, lag time is an important factor to consider, and sales leaders need to track metrics in near real-time in order to determine if a change is needed to the sales process.
As enterprise sales cycles become increasingly more complex and as competition only continues to compound, sales leaders can’t simply rely on the same standard KPIs that they’ve used in years past. While the win/loss rates, activity volumes, and conversion rates can be important and certainly provide an adequate gut check, they don’t tell the whole story—sometimes, they don’t even paint enough of a picture for sales leaders to confidently make iterations to the sales process.
Fortunately (and just as unfortunately) there is an exhaustive number of KPIs available for today’s sales leaders. While tracking all of them is not only impossible but excessive, we’ve narrowed down our list to the top 4 that most sales leaders aren’t tracking, but need to be. And what better time than the first month of the new year to start?
4 KPIs to Start Tracking Now
1. Activity Effectiveness
Attaining quotas used to be largely a numbers game. The more leads in the pipeline, the more smiles and dials, the more conversations, the more quota attained. While in some cases the activity game may still hold true, in most cases, it’s simply not enough. Prospective customers receive hundreds (if not more) prospecting attempts each year by organizations just wanting “15 minutes of their time”. Unfortunately, this means that individuals are tuning out the “noise” even when a solution may actually be helpful to them. In today’s modern sales era, it can take up to 18 calls to connect with a single buyer, so simply increasing volume and not improving the quality of the approach is worthless.
Savvy sales leaders should ditch the avitivity mantra once and for all and instead adopt the mindset that quality is absolutely greater than quantity in almost every scenario. Rather than counting prospecting emails sent on a volume-only basis, count email replies received or phone calls set up as a result. If a sales professional only sends 10 well-crafted, well-researched emails in a single day, but converts 5 of those into first conversations, isn’t that significantly better than sending 100 blind emails that are immediately marked as spam?
2. Pipeline Coverage vs Future Quarter Quota
Sales leaders understand their organization’s sales cycles intimately well. They know, on average, the length of the sales process from first demo to close and they know how many touchpoints are usually required to get the deal done. However, it can be all too easy for sales leaders to focus on getting every deal across the finish line before the end of that quarter and, in the midst of the pressure, lose sight of the following quarters. If a sales cycle is typically 4-5 months long, then it’s imperative that pipeline coverage of at least 150x - 200x already exists for at least a quarter out—if not even farther out, depending on the complexity of the process.
If pipeline coverage for future quarters isn’t on a sales leader’s top KPIs list, it should be. The best way to measure pipeline coverage for future quarters is to first look at historic numbers to determine how much excess is needed, and how far in advance. Then, it’s important to have a direct line of sight not just into deal mechanics, but into each individual business case to determine if the deal is headed in the right direction—or if the sales professional needs some help in correcting the course.
3. Demo to Proposal Rate
While the demo to proposal rate might be measured in a bigger bucket of the more popular KPI of sales pipeline conversions, this particular metric can be pure gold. After all, most of the difficult sales conversations, objection handling, and wrangling of decision makers and influencers happens between these two stages. While each organization has a unique process, most sales teams host a product demo early on in the process, whereas the proposal isn’t sent until after the solution and requirements are determined—usually towards the end of the sales process. Between those two major milestones, significant conversations take place that can either propel the conversation forward, stall it, or derail it completely.
While some factors are completely uncontrollable by the sales professional (like a decision maker leaving the company), plenty of scenarios can be addressed by making small adjustments to the sales process. By measuring this KPI, sales leaders can determine if such adjustments need to be made, and if so, what those changes should consist of.
4. Usage Rate of Messaging & Marketing Material
Sales professionals usually have a plethora of resources at their disposal. But how often are they actually using those valuable thought leadership pieces like whitepapers and reports, or sharing customer case studies and ROI-based messaging? According to Salesforce.com, utilization of marketing resources can be a leading indicator as to whether or not the sales professional has adopted the company messaging and leverages the tools they have at their disposal to differentiate the organization from competitors.
By measuring marketing usage, sales leaders can begin to correlate whether or not the use of marketing resources has a tangible impact on the sales process by calculating influence. But sales leaders can take marketing resources to the next level by incorporating the most important messaging directly into their agile sales platform to ensure that sales professionals are indeed using the messaging. This also allows sales leaders to gain visibility into what conversations are taking place, and gives them the ability to adjust messaging in real-time to ensure it’s always helping to move deals forward.
Ready to Learn More?
For more information on best practices of great sales leaders, check out the Costello resources below. If you’d like to see Costello in action, request a personalized demo of our agile deal management platform.