The Problem: You Need to Make a Change, But Don't Know Where
Here is a scenario for you: you have just been hired as the new VP of Sales at a young technology company. You were hired with the expectation, naturally, of improving processes, increasing sales and growing the company in the right way. Your first day on the job you sit down at your desk and discover that, like the vast majority of sales organizations out there, the organization has been using Salesforce or another CRM that has been gathering data on how the sales of this particular organization have been operating.
You are now at a crossroads. You've got all this data, a big job to do, and aren't sure where to begin. That's where we come in with this article. A few weeks ago we published an eBook, Sales KPI's That Drive Performance Outcomes. In that book, we outlined, described, and gave advice on how to implement 24 of the most meaningful KPIs that we have come to know through years of personal experience and extensive research.
But what if you haven't got the time to go wading through all of those KPIs, making sure that your organization is hitting each one. This is your first week on the job, after all, and you need to take action fast. No problem, we've condensed the list into these 5 KPI's that will provide the most immediate, noticeable benefit to your bottom line. Start with these and then work on the others once you feel comfortable that your organization has each of these KPIs working at maximum efficiency.
This information is particularly useful to the new VP of Sales, but equally useful for the seasoned VP who is looking to shake things up a bit.
The Answer: Start With These 5 KPI's.
The following 5 KPIs are presented in the order that you should start implementing them. Again, this is not a comprehensive or exhaustive list, it's just the best place to start in order to begin seeing the most immediate, positive benefit to your bottom line- it doesn't create a truly winning sales organization; that part comes with more time.
Lead Response Time
- Monitor the time between when a lead entered your pipeline to the first time that they were contacted by a member of your team (any contact counts).
Why do we start with this one as the best way to quickly impact your bottom line? Because according to the Harvard Business Review "Firms that tried to contact potential customers within an hour of receiving a query were nearly seven times as likely to qualify the lead (which we defined as having a meaningful conversation with a key decision maker) as those that tried to contact the customer even an hour later—and more than 60 times as likely as companies that waited 24 hours or longer." If you want to start seeing immediate results, initiate processes and protocols that have your sales team following up with leads in less than 24 hours.
- Track your won opportunities and identify which activities led to the most wins.
- Where the information is available, track what activities your competitors are completing most often.
This KPI essentially asks you to take the long view, attaching specific activities to wins. While you might need the assistance of a sales performance platform to make these connections (as they can sometimes be a little hard to spot if you are looking at the data without any visualization help) it is definitely worth your time to figure out which activities your reps are doing that translate to the most wins. And why do we put this one on the shortlist of KPIs to start tracking immediately? According to Cobhan Phillipson "If you can eliminate unnecessary time spent on non-selling activities sales objectives and results will also see improvements." Improve your efficiency rating and you will see everything else improve shortly thereafter.
- Monitor how long it takes for a deal to enter your pipeline until the time it is considered won or lost.
- Closely monitor each stage of your sales funnel and track the time that each opportunity spends in each stage.
- Identify patterns between won opportunities and individual steps, taking particular note of when opportunities gained momentum.
This KPI asks you to perform a deeper dive into your sales funnel and promises big returns when it comes to optimizing the processes found therein. In the "Sales Cycle" KPI we asked you to take a look at your entire sales organization in the big picture, looking for weak links. In this stage, you are looking at specific stages and trying to find patterns in the data- which stage is most often associated with a win? At what stage do most deals go from slow moving to the fast lane? In other words, at what stage in the sales process
Steps by Representative
- Track each of your representative's opportunities by the KPIs listed above
- Make sure that you are gathering current and historical data to give yourself a clear picture of the employee’s growth over time.
While there are many benefits to tracking this KPI, the primary benefits are found in the performance improvements you will see within your own representatives. But this is just the start. Most data analysis tools can give you which opportunities your representatives have open, and even what stage they are in. But for real efficiency gains, you need to remember that second bullet point and also gather and analyze that information historically for each employee. Often employees can go through seasons of busy times or slow times depending on factors in their personal lives or the waxing and waning of a particular industry. Gathering that historical data will allow you to see the patterns in an individual’s performance and do more than just scramble to make changes in the moment. While this is certainly beneficial it would be even more efficient if a sales leader could predict, based on historical data, when a certain employee will be busy or slow, thereby changing the workforce before it becomes a problem. Track this KPI right at the beginning of your tenure and you will surely be in an enviable position with a team full of motivated, efficient salespeople in no time at all.
If you would like to dig deeper into KPI's that matter most for your company, check out our Ebook "Sales KPI's that Drive Performance Outcomes".