Carl Larson Sales Best Practices - Sales KPI and Metrics Management
As a sales leadership subject matter expert with deep, hands-on sales team management experience at small, medium and large high technology product and professional service organizations, I am responsible for exceeding annual corporate revenue objectives by growing year-over-year sales and profitability. To support sales revenue achievement, I am responsible for developing new business customers, growing existing customer revenues and introducing new product offerings to penetrate new markets. To profitably grow businesses, I am accountable for optimizing the cost of sales by segmenting the marketplace, hiring and developing the right sales personnel and skill sets and establishing consistent sales process that reduces the time to value for my customers and my company. These processes include effective sales prospecting, business-value qualification or disqualification, executive relationship building, proof of value, win-win contract negotiation and closing performance. I have experience building businesses that grew new business software license sales, built SaaS annual recurring revenues and achieved professional services success.
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If you can't measure or monitor it, you can't manage it !
1. Sales Key
Performance
Indicators:
Your 5th Gear.
Carl Larson
(312) 925-4232
larson.carl23@gmail.com
https://www.linkedin.com/in/carlwlarson
https://www.twitter.com/carllarson23
2. KPI’s are
important to
all
businesses
because
what gets
measured
gets done.
SALES key performance indicator definition
SALES key performance indicator categories
SALES key performance indicator measurement
Harvard Business Review survey results
SALES KPI takeaways
3. In its simplest form, a sales key performance indicator (KPI) is a performance
measurement that helps the organization monitor and understand how the
sales department is executing.
MOST organizations fail in this area and their current leadership team misses this
simple, but critical step in the process.
A good KPI should act like a compass, helping you and your sales team understand
whether you are executing in a way that the strategic sales goals will be met. To be
effective, a KPI must:
> Be well-defined, quantifiable and timebound.
> Be clearly communicated throughout your organization and department.
> Be important to achieving your sales goals in support of the corporate goals.
> Be relevant to your Line of Business (LOB) or department.
If you can’t measure and monitor it, you can’t manage it.
4. Measuring three sales key performance
indicator categories separate the best
companies from the rest because they
consistently harness the power that
comes from understanding and
acting on their data.
1) Activity – 2) Process – 3) Results
5. 1) Sales Activity KPI’s.
2) Sales Process KPI’s.
3) Sales Results KPI’s.
To improve sales results, why do the top
companies focus on Sales Activity, Process,
Results KPI’s?
> To obtain objective measurements about their business
and whether their strategic goals are being met.
> To provide real-time information and insightful feedback to
the business in the event a course correction is required.
> To generate a learning environment that can lead to
innovation and an understanding of the business strategy.
> To improve staff morale by providing reinforcing feedback
and motivational incentives.
> To create consistency and continuity which is essential for
monitoring long-term strategic goals and success.
6. Sales Activity KPI’s
Is it about Quality or Quantity?
The key to making sales lies in ACTIVITY. All the sales activities we do
on a consistent basis account for more than any one activity –
prospecting, qualifying, needs discovery and analysis or
closing. Qualified opportunities come from both the quality and
quantity of the sales activity. So, does the quality of the sales activity
matter or is sales simply a quantity game?
The answer is YES to BOTH!
The quality of any sales activity is imperative with today’s sophisticated
buyer and heightened competition. The most successful sales reps
must think and plan to take a disciplined approach in their strategies
and tactics. That said, however, the sales rep who procrastinates
when prospecting, performing follow up and ensuring the best
possible customer experience will never reach their full potential.
7. Sales Activity KPI's
Sales Results are a function of the Sales Activity.
Best practice sales KPI management that measures sales
activity to support consistent sales success include:
CRM documented phone contacts per week.
CRM documented NEW phone contacts per week.
CRM documented meetings per week.
CRM documented NEW prospect meetings per week.
CRM documented decision-maker meetings per week.
CRM documented pertinent functional line of business meetings per week.
CRM documented prospect discovery sessions per week/month.
CRM documented prospect demonstrations per week/month.
CRM documented prospect proof of value concepts per month/quarter.
8. Sales Process KPI’s
Sales Results are a function of the Sales Process.
Best practice sales KPI management that measures sales
process to support consistent sales success include:
CRM documented new prospect qualified leads per week.
CRM documented new prospect qualified leads revenue per week.
CRM documented forecast revenue => 60-90% odds of closing that month/quarter.
CRM documented pipeline aging => age and progression of pipeline (or lack of).
Sales pipeline forecast coverage => pipeline revenue divided by forecast revenue.
Sales pipeline quota coverage => pipeline revenue divided by quota revenue.
Sales opportunity prioritization => prioritize and weight leads based upon revenue
value and probability of closure.
9. Your Sales Process OR Your Prospect’s Buyer Persona?
Why are buyer personas so important?
Having a clear understanding of your customers is essential for sales success. By adopting
buyer personas, your sales team will:
Develop a deeper understanding of your customers, their pains and how to satisfy them.
Prioritize projects and solutions based on buyer persona requirements.
Tailor campaigns and offers to specific buyer persona.
Combine the marketing and sale silos into a single customer-centric funnel.
“71% of companies who exceed revenue and lead goals have documented personas vs.
37% who simply meet goals and 26% who miss them.”
Understanding B2B Buyers, The 2016 Benchmark Study
https://www.cintell.net/wp/wp-content/uploads/2018/11/1699113-0-BenchmarkStudyUnderstandingBuy.pdf
10. Sales Results KPI’s
What gets measured gets done.
Best practice sales KPI management that measures sales results
to support consistent sales success include:
Closed revenue and closed revenue by sales rep type (i.e. SMB, Enterprise, Specialty).
New business revenue and % of total revenue by month/quarter.
Business revenue that is incremental to an existing account revenue stream and % of total revenue by month/quarter.
Business revenue that is NEW to an existing account revenue stream and % of total revenue by month/quarter.
Renewal business revenue and % of total revenue by month/quarter.
Closed new accounts by month/quarter and comparison to year-over-year performance.
Closed revenue conversion rate => closed revenue divided by total CRM lead revenue.
New account revenue conversion.
Incremental or new revenue conversion in an existing account.
Renewal revenue conversion.
11. Sales Results KPI’s
What gets measured gets done.
Best practice sales KPI management that measures sales results
to support consistent sales success include (continued):
Annual customer churn rate => percentage of existing customers that stop using the
solution.
Net expansion revenue => total additional revenue from existing customers less
existing customer revenue churn.
Average sales cycle time comparison => duration of time from lead qualification to
close.
Sales rep quota attainment by rep type => how many sales reps met their annual
quota.
12. Sales KPI's: Where the Buck Stops.
High-performing sales organizations hold their team members to a higher level of accountability.
Study participants were asked whether or not they agree with the statement that their salespeople are
consistently measured against their quotas and held accountable for their results. Twenty-nine percent of
high-performing sales team members strongly agreed with that statement while only 13% of
underperforming sales team members did.
13. Sales KPI’s:
The Importance of Formal Sales Structures.
High-performing sales organizations employ a more structured sales process.
Fifty percent of study participants from high-performing sales organizations responded they had sales
processes that were closely monitored, strictly enforced or automated compared to just 28% from
underperforming sales organizations. Forty-eight percent of the participants from underperforming sales
organizations indicated they had nonexistent or informal structured sales processes compared to only
29% from high performing sales organizations.
14. Sales KPI's: Setting Stretch Goals.
High-performing sales organizations are not afraid to aggressively raise year-over-year annual
quotas.
Seventy-five percent of high-performing sales organizations raised 2014 annual quotas more than 10%
over 2013 quotas compared to 25% for average and 17% for underperforming sales organizations.
Annual quotas remained the same or decreased for 65% of underperforming sales organizations, 48% of
average sales organizations, and only 14% of high-performing sales organizations.
15. Sales KPI Takeaways:
KPI's should accurately monitor and measure your progress towards
meeting the overall company goals.
Less is more - choose a manageable number of sales KPI's to monitor
and measure, ideally 4 – 8 KPI's.
The importance of specific KPI's will evolve as your company’s
priorities evolve, so always think about your company’s growth stage.
It’s important to understand both what happened in the past and how
you are progressing towards your future objectives as a company, so
choose both lagging (i.e. net profit) and leading (i.e. opportunities in the
pipeline) performance indicators to monitor and measure.
Use reference industry KPI's, but always choose sales KPI's that are
most relevant for your company and stage.
16. To reiterate, a good KPI should act like a compass, helping
you and your sales team understand whether you are
executing in a way that the strategic sales goals will be met.
To be effective, a KPI must:
Be well-defined, quantifiable and timebound.
Be clearly communicated throughout your organization and
department.
Be important to achieving your sale goals in support of the
corporate goals.
Be relevant to your Line of Business (LOB) or department.
If you can’t measure and monitor it, you can’t manage it.
17. Successful business owners need more than
just financial statements to run their
organizations effectively.
Relying on “gut feelings” and assumptions when it comes to making decisions is
a recipe for disaster. There is no substitute for concrete data when it comes to
measuring the health and understanding the direction of a business.
With the wealth of data and insights available to businesses in the digital age,
CEO’s and managers should be mining and evaluating this valuable
competitive resource, but many businesses struggle to take the time to do
so.
Now more than ever, businesses need to be collecting forward-looking
insights that shape overall strategy and reinforce daily decision-making.
18. Here is my challenge for you to consider:
Does your sales organization have defined sales KPI’s in place or is
it lacking the skill and discipline like many companies who do not?
You have two choices:
1. Do nothing and continue to have a sales organization and
leadership team that fails to achieve what is possible.
2. Take action now to change and help your sales
organization increase sales, grow revenue, improve market
share and take your company to the next level.
19. To take your organization and your sales
revenue to the next level regardless of the
economy, call or email me to schedule a
fifteen minute discovery discussion at:
Carl Larson
(312) 925-4232
larson.carl23@gmail.com
https://www.linkedin.com/in/carlwlarson
https://www.twitter.com/carllarson23
20. Sales Key
Performance
Indicators:
Your 5th Gear.
Carl Larson
(312) 925-4232
larson.carl23@gmail.com
https://www.linkedin.com/in/carlwlarson
https://www.twitter.com/carllarson23
Notes de l'éditeur
Sales Activity KPI'sPipeline & Forecast KPI'sSales Revenue KPI'sPipeline CoveragePipeline ConversionForecastWorst Case ForecastBest Case ForecastAged PipelineNew Business PipelineExisting Account Pipe
And if you can’t manage it, your organization will have a big challenge to consistently improve sales
Goal: avoid the roller coaster affect
Must give nudge to take action now
You have two choices: stay the course and get you same results
Or take simple steps now to obtain the sales success you have been seeking
Click to call or email me
Must give nudge to take action now
You have two choices: stay the course and get you same results
Or take simple steps now to obtain the sales success you have been seeking
Click to call or email me