Why aligning sales goals and KPIs is important
Revenue is a quantifiable measure of sales performance. And since revenue is measurable, sales management teams in the organizations also try to measure the sales performance with respect to activities that drive sales.
The problem here is each activity in a sales process contributes to pushing the lead ahead in the sales pipeline on a different level. That means due attention must be given to every sales activity, but the conflict arises when there is no measurable parameter to determine how much time and attention a field sales representative must provide to each activity.
Such conflicts are often settled by building sales KPIs. Key performance indicators are measures that help sales managers to identify and measure sales activities performed by the individual and the overall team.
The Key Benefits of Sales KPIs
- Direct action: sales reps get a clear idea of what is expected from them in the organization so that they can direct their actions towards achieving those metrics.
- Performance visibility: metrics provide sales team managers visibility into the quality and quantity of sales activities performed by individuals.
- Performance evaluation: With visibility into the performance, sales team managers can evaluate the performance of each individual sales representative and determine their strengths and weaknesses, arrange training sessions for them, and create rewards and recognition programs.
It is important that KPIs are well-aligned with the goal of organizations and not randomly made to quantify sales activities. Setting the right goals here is extremely to the success of building KPIs, because it is these goals that every field sales representative will try to achieve through KPIs.
Your goals should be clear and properly presented through transparent means, which is comprehensible for every member of the team. Anything that makes the goals ambiguous and unrealistic must be avoided in order to make them work out for the sales team and the organization.
Consider these factors when setting goals:
- Relevance: every goal must lead to achieving the larger goal of the organization.
- Specific: each goal should clearly reflect what you want to achieve.
- Measurable: the success or failure of each goal should be measured
- Realistic: every goal should be realistic and achievable
- Time-bound: The timeline of the goal and when it will be achieved.
When your business goals contain such features, it becomes easier for you to create sales KPIs that would set the benchmark for the team to achieve it.
Remember that KPIs are not goals in itself, KPIs are measured, which must be evaluated and evolve from time to time, depending on the current requirements of the business. Here the top sales KPIs all sales leaders should measure.
Top sales KPIs every sales leader should measure
- No. of qualified leads
- No. of follow-up meetings
- Call-show rate
- Conversation drip
- Leads to opportunities ratio
- Deals by stage
- Sales stage conversions
- Sales per channel
- Repeat sales per channel
- Pipeline velocity
- Average time to conversion
- Close rate percentage
- Average profit margin
- Client acquisition rate
- Churn by rep
These are few examples of sales KPIs usually followed by the sales leaders. Most effective KPIs are those which align with your business needs and revenue targets.
Setting KPIs that are well aligned with goals will empower your field sales representatives in a number of ways. Most importantly, they get to know what is expected from them to succeed in the organization, following which they can create their own unique strategies to achieve those targets.
When you know tracking which KPI can give you the performance visibility, you can align your field sales CRM dashboard to help you track and measure those KPIs. Hopefully, if your CRM provides you with the capability to customize a dashboard based on your business requirements, you can bring transparency into the system and adopt a targeted approach to achieve your business goals.