The ABC of your KPI

28 Jun, 2019 - 00:06 0 Views
The ABC of your KPI

eBusiness Weekly

Robert Gonye

When you take risks you learn that there will be times when you succeed and there will be times when you fail, and both are equally important. As a sales manager you can often feel like though you are trapped. Without a regular physical presence in the field, it’s difficult to keep tabs on your team and business operations. Instead, you rely heavily on field representatives to be your eyes and ears.

The best way for a sales/field manager to gain visibility into your team’s activity is to collect and measure both team and product performance through KPIs.

KPIs, or Key Performance Indicators, are metrics used to track the performance of a business, a department, or individuals against goals. The key is to choose the KPIs relevant to your industry and business goals — focusing on the wrong ones is costly to your company.

  1. New leads/opportunities

This is the metric that managers most consistently monitor. How are your salespeople contributing to the expansion of your business in their given territory? Who’s reaching their target? What percentage of your team is hitting their number? Is the target too high? Too low?

Share this data with your team so they can see how they stack up against other reps. there’s nothing like a little competition to get your team motivated.

  1. Client acquisition rates

Another commonly used measurement is rate of client acquisition. Of the new prospects your reps reach out to, how many convert to customers? It’s natural for some salespeople to perform better than others but if there are large discrepancies between conversion rates, dig deeper.

Are lower-performing reps approaching bad-fit prospects? Is there something that over-performers do in sales meetings that others don’t?

Comparing conversion rates to the number of prospects a rep reaches out to is key. If you find that conversions decrease after a certain number of touches, use that number as a benchmark to prevent your reps from getting burned out or stretched too thin.

  1. Sales volume by location

By comparing sales volumes across locations, regions including physical stores, you can see where demand for your product is highest and lowest, then tackle the why.

If sales volume is large in region A, perhaps there is a higher demand there, in which case you can focus on customising certain products and services for that region. Or, if you are comparing numbers across physical stores, you can take advantage of A/B testing.

For example, if two locations see relatively similar sales volume in June, try implementing a promotional sale in one location and not the other in July to see if it drives sales.

In addition to promotional sales you can try other tactics such as shelf displays, discounts, coupons, demos, or samples.

  1. Competitor pricing

As a manager and business owner you shouldn’t track competitors’ every move, however, being aware of their pricing can help create a competitive strategy. If your prices don’t differ much, you can consider a price-matching strategy to guarantee your customers the lowest prices, and you the most sales.

Additionally, by keeping track of the average retail price of your products, you can measure the impact of cutting your prices or implementing a promotion.

And make sure you’re training your reps to handle pricing objections appropriately.

  1. Existing client engagement

Maintaining good rapport with customers after the sale is important to ensure long-term business. By regularly touching base with their customers to understand how things are going and how they can help, salespeople, build trust and keep customers happy.

When reps are consistently available to help, customers know they’ll always have somebody there to support their business needs.

Beyond benefiting your company’s business outlook, keeping in touch with clients supports your business’ strategic goals as well.

If, for example, you notice that your top 10 long-term clients touch base with their sales rep approximately once per quarter, take a deeper look. What do those touch bases look like? How often do reps encounter an issue they’re able to help their client solve?

  1. Upsell/cross-sell rates

The most qualified leads in your CRM? It’s your existing customers. Have your reps track their upsell and cross-sell numbers, and use that data to identify whether certain verticals respond well to certain product/service pitches.

For example, if reps have good luck selling Feature A to clients with Product Package S six months into their tenure with you, this might be a worthwhile milestone to add to your sales process.

Look at when, how, what, and to whom your reps are upselling and cross-selling, and adjust your efforts accordingly.

  1. System touches

Ideally, you’d like your sales process to be fairly “low touch”, meaning your salespeople are closing new business efficiently for your company and your consumer.

If you review a salesperson’s quarterly numbers and see that they missed their quota/target and had a very high number of touch points per closed-lost deals (say, five meetings, 15 emails, and 10 phone calls), it might be time to revisit how effective that rep’s strategy is.

Analyse your most successful reps’ average touch points? Ask these reps to share their strategies, techniques and advice to streamline your team’s average, collective sales cycle.

  1. Sales Cycle Length

Similarly, it’s important to look at the average length of your team’s sales cycle. Are some reps closing in three weeks while others are closing in six? What are the respective churn rates six months from on boarding?

Analyse what sales cycle length produces the highest number of closed-won business. And don’t forget to also look at how successful those deals are down the line.

If you have a rep whose closing business in record time, but you find that their customers are dissatisfied with your solution and often churn after nine months, a longer sales cycle might yield a healthier business.

In conclusion, once you have data on your KPIs, analyse the information to understand why you got those results. Then, determine how you can improve performance and follow through with action. And remember — as important as establishing KPIs are, they must be always tied to an expected  goal.

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