As a sales manager, keeping tabs on your business operations and your team members can be a challenge. After all, no sales manager can be everywhere at once! Instead, your sales representatives need to give you the information required to keep everything running smoothly. It is only by measuring performance through relevant KPIs that you can begin to understand the day to day movements of your sales team and help them to develop in their roles. And that’s why having accurate sales KPIs is so important.
What are Sales KPIs?
KPIs are a set of metrics that track the performance of an individual, department, or business against set goals. But while one set of KPIs will work for one business or individual, the same set may not be of any use in your specific circumstances. The importance of choosing the right KPIs cannot be understated. Focusing your attention on the wrong KPIs is simply a waste of time and resources.
Keep reading to discover the six KPIs that have proven to be most useful when managing teams. As you review them, consider to what extent each one relates to your sales reps, and you’ll be well on your way to creating the perfect set of KPIs to track the performance of your team.
1. Rate of New Contacts
Arguably one of the most common metrics, the rate of new contacts is directly related to your business’s expansion in sales.
Your Sales salespeople are responsible for ensuring the continued expansion of your business. It’s essential for you to understand who is reaching their quota, and what those quotas should be to meet your business goals.
2. Engagement with Existing Clients
Every sales manager knows that it is not enough to get a sale: the relationship must be nurtured in the long-term. Reach out to former clients and customers often. It’s only by maintaining a relationship that you can ensure your previous customers will do business with you again and refer you to others.
Engaging with existing and former clients is not an esoteric KPI: it is one that will have a direct impact on your sales, and thus one that should be measured.
One of the easiest ways to measure this KPI is to compare the number of interactions with each existing or former client to the total length of the relationship with that client.
3. The Volume of Sales per Location
A comparison of the volume of sales across various locations (with the location defined to include online, telephone, and mail order transactions as appropriate) will give you a good indication of where your product is in high demand, and where demand is lowest.
A greater sales volume in one location compared to another could lead to a more in-depth analysis of why that location is performing better. Does it come down to the salespeople? Or is your product or service naturally in greater demand in one location over another?
Similarly, if two locations have comparable volumes of sales, you can take advantage, by conducting tests that will inform future sales and promotions. For example, if you’re torn between two sales models or advertising campaigns, conduct your own A/B testing. Start by implementing one possibility in one location and it’s alternative in the other location and tracking the results.
4. Rate of Client Acquisition
The rate of client acquisitions is another popular metric, it measures the conversion rate of prospects to customers.
If you use this metric and you noticed that some salespeople in your team consistently have a higher rate of client acquisition than others, this could be because those salespeople are better performers. Yet, it could also indicate an underlying issue. In this instance, you may need to consider the types of prospects that each of your salespeople are approaching.
The rate of client acquisition is also used to make objective comparisons between different methods of outreach, such as in-person client meetings vs telephone cold calls or emails.
5. Price Comparisons
While it’s not a good idea to track every move your competitors make, it is also not a good idea to be completely unaware of your competitors’ pricing. A good understanding of your competitors’ price model will allow you to stay competitive. Plus, you’ll be able to flex your pricing in certain circumstances.
For example, if you and your competitor offer similar prices, you could introduce a price match guarantee. This gives your potential customers a reason to prefer you over the competition.
A sales position requires impressive levels of persistence and determination. Yet no matter how determined and persistent your sales staff are, everyone has a breaking point. As a manager, you need to ensure that your reps are motivated and satisfied in their positions. But employee satisfaction can be a difficult metric to track.
One method is to request that your Sales staff complete a job satisfaction survey on a regular basis. Ranking different areas of employee satisfaction on a sliding scale from 0 to 10. However, with this method, you risk your sales staff merely telling you what you want to hear. They might not be completely honest, for fear of losing their position.
An alternative is to set up an anonymous online survey where employees can feel free to speak their minds without fear of negative ramifications. There are plenty of free platforms available that can help you do this, try Google Forms and Survey Monkey.
Track These KPI’s to Nail Your Sales Goals in 2021
Once you have determined your ideal set of KPIs, you can begin to track your progress in each one. Start by establishing a baseline reading. You can then measure your performance at regular intervals and act on the results to ensure you reach your sales goals this year.
Had success with KPI’s that aren’t on this list? Let us know what works for you in the comments!