The biggest challenge with KPIs is not to have too many, but just enough to be relevant. In this Expert Insight Interview, John Briggs discusses sales KPIs. John Briggs is a founder and CEO of Incite Tax and Accounting firm.
The interview discusses:
- Lagging v Leading KPIs
- Individual impact in the sales group
- Phone calls and quota hitting
Lagging v Leading KPIs
A good number of KPIs to focus on is anywhere between three to seven. Of course, that depends on the size of the organization. In a big organization, each department can have three to seven KPIs, but it is crucial not to overwhelm employees individually. Many people collect lagging KPIs as net profit, but they are hard to influence. On the other hand, leading KPIs are dynamic and easy to impact. Leading KPIs are easy to pick, easy to change if necessary, and support the company’s main initiative. The examples are the number of leads coming in, the number of phone calls generated from those leads, and the conversion rates.
Sales managers should focus more on leading KPIs to shape the sales rep’s behavior and push the right initiatives. For example, there is a direct relationship between having proper call planning and closing the deals. Proper call planning brings higher conversion, and it is also easy to track. Furthermore, it is of great significance to balance the KPI’s burden to its benefit. If the information is beneficial, but the gathering cost is too high, it is not worth it. Gathering KPIs should not be complicated. Explaining the importance of specific KPIs to the team and connecting KPIs to the team’s compensation creates the self-motivation for tracking and reaching them.
Individual Impact in a Sales Group
Tracking the conversion rates for each individual can help us find channels in which each employee is the most efficient. For example, someone is more efficient with Facebook clients, while someone works the best with Google clients. Managers should encourage employees to focus on channels that are their biggest strength. Today, there are so many different channels to work in that it is easy to help people focus on areas where they perform the best.
Average phone call time is another KPI worth mentioning. Having longer phone calls can cause higher conversion rates and higher revenue, but it can also have the opposite effect. It is important to be analytical on the allocation of time and economic returns. Also, hitting the quota KPI can cause burnout if an employee is a high performer. Instead of the constant and meaningless raising of quota for a high performer, a manager should talk with an employee to find KPIs and compensation package that increases his self-motivation.
John is the Amazon bestselling author of Winning the Battle for Sales: Lessons on Closing Every Deal from the World’s Greatest Military Victories and Social Upheaval: How to Win at Social Selling. A globally acknowledged Sales & Marketing thought leader, speaker, and strategist. He is CSMO at Pipeliner CRM. In his spare time, John is an avid Martial Artist.