Sales KPIs: How to Define the Right Metrics for Your B2B Sales Team | Geckoboard
Sales KPIs: How to Define the Right Metrics for Your B2B Sales Team | Geckoboard:
Identifying sales key performance indicators
(KPIs) can feel like finding a diet that works: everyone claims their
diet is the best, resulting in all manner of conflicting advice
regarding ‘superfoods’ and other foods to banish entirely. It’s really
quite confusing and frustrating since the ‘best’ is highly subjective
both for food and KPIs. The real question is what’s right for you? What sales metrics will help you achieve your company goals?
want to empower you to define the right metrics for your sales team.
Then we’ll look at a list of the most common sales KPIs.
Revenue? Growth? Customer acquisition? Customer Retention? Typically,
companies have one primary objective with one or two secondary goals
that provide context and support the primary objective. Ideally,
everyone in the company should know this off the top of their head. For
example, the company goals might look like this:
your company reach their overall goals? Take a broad goal such as total
monthly sales and break it down further. What is your average deal size (or purchase value)? What is your average sales cycle length?
What is your cost of sales? It’s important to view your primary goal
(e.g. total monthly sales) in the context of your industry and specific
business.
Sales Specific Goals
metrics you outlined in step 2 and distill what your team needs to do to
reach those goals. Work backwards. How many deals do you need to close
to hit your target? Based on that number, how many opportunities should be in your pipeline?
How many calls/emails/meetings will be necessary? How many leads or
contacts will your marketing team need to generate? Keep drilling down
until you have a solid understanding of the key activities driving your
revenue.
KPIs are most effective when they target specific actions for two
reasons. One, action-oriented KPIs inspire action. And two, KPIs focused
on action help uncover possible causes when the overall goal isn’t met.
Pipeline flow:
exercise in step 3, the most critical metrics should become obvious. I
recommend compiling a short list of 5-8 sales KPIs that include both
contextual metrics and activity-based metrics. This helps you focus on
the most critical data without distorting their impact (this can easily
happen if you only focus on 1-2 metrics). You can always adapt, add, or
remove this list later.
no-brainer, but it’s far too important to skip. Having the key metrics
in front of your team on a daily basis will help them track progress and
prioritize actions. Defining your KPIs will be a waste of time and
energy if you archive them in a static document or spreadsheet. KPIs are
living metrics meant to be shared and monitored regularly. Obviously,
we believe a great way to do this is by getting them on a TV dashboard on your sales floor and you can see an example of what that dashboard might look like below.
Identifying sales key performance indicators
(KPIs) can feel like finding a diet that works: everyone claims their
diet is the best, resulting in all manner of conflicting advice
regarding ‘superfoods’ and other foods to banish entirely. It’s really
quite confusing and frustrating since the ‘best’ is highly subjective
both for food and KPIs. The real question is what’s right for you? What sales metrics will help you achieve your company goals?
KPIs are never one-size-fits-all.
So instead of trying to persuade you that certain KPIs are the best, Iwant to empower you to define the right metrics for your sales team.
Then we’ll look at a list of the most common sales KPIs.
Defining the right KPIs
1. Start big. What are your company-wide goals?Revenue? Growth? Customer acquisition? Customer Retention? Typically,
companies have one primary objective with one or two secondary goals
that provide context and support the primary objective. Ideally,
everyone in the company should know this off the top of their head. For
example, the company goals might look like this:
- Primary goal: Increase annual revenue to X amount
- Secondary/supporting goal: Grow 6% month over month
your company reach their overall goals? Take a broad goal such as total
monthly sales and break it down further. What is your average deal size (or purchase value)? What is your average sales cycle length?
What is your cost of sales? It’s important to view your primary goal
(e.g. total monthly sales) in the context of your industry and specific
business.
Sales Specific Goals
- Primary sales goal: $ Monthly Sales
- Secondary sales goal(s): % growth month over month
- Average deal size ($)
- Average sales cycle X days/weeks/months
- Cost of sales ($)
- Opportunity win rate (%)
metrics you outlined in step 2 and distill what your team needs to do to
reach those goals. Work backwards. How many deals do you need to close
to hit your target? Based on that number, how many opportunities should be in your pipeline?
How many calls/emails/meetings will be necessary? How many leads or
contacts will your marketing team need to generate? Keep drilling down
until you have a solid understanding of the key activities driving your
revenue.
KPIs are most effective when they target specific actions for two
reasons. One, action-oriented KPIs inspire action. And two, KPIs focused
on action help uncover possible causes when the overall goal isn’t met.
Pipeline flow:
- (#) of wins
- (#) of deals/opportunities
- (#) of sales qualified leads
- (#) of marketing qualified leads
- Send X outreach emails
- Send X follow-ups
- Make X calls
- Conduct X meetings
- Send X proposals
exercise in step 3, the most critical metrics should become obvious. I
recommend compiling a short list of 5-8 sales KPIs that include both
contextual metrics and activity-based metrics. This helps you focus on
the most critical data without distorting their impact (this can easily
happen if you only focus on 1-2 metrics). You can always adapt, add, or
remove this list later.
- Contextual example: Monthly Sales $ to date vs target monthly sales $
- Activity example: X follow-ups vs (#) sales qualified leads
no-brainer, but it’s far too important to skip. Having the key metrics
in front of your team on a daily basis will help them track progress and
prioritize actions. Defining your KPIs will be a waste of time and
energy if you archive them in a static document or spreadsheet. KPIs are
living metrics meant to be shared and monitored regularly. Obviously,
we believe a great way to do this is by getting them on a TV dashboard on your sales floor and you can see an example of what that dashboard might look like below.
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