When a company is seeking to get their sales team more focused on the right sales KPIs to increase sales, it begs the question: What sales KPIs are the right ones for them to focus on? Closing sales is the obvious one, but it’s a lagging indicator that results from the collective actions leading up to the sale (see my recent post on this topic, Do You Manage Sales Quotas, or Sales Performance?). After that, people tend to say the same things – making calls, having meetings, completing demos, etc. But, are those really the right behaviors and KPIs to focus in on? How do you know?
Let’s say you decide “number of meetings” is an important KPI for sales. Do you want any meeting? Should it be any conversation, or just meaningful conversations? If so, how do you define meaningful? Is it with anyone, or someone with a specific title? Is it in person, over the phone, email? Lots of options here.
I was recently reading some insight from Forrester Research which shared that 80% of decision makers say that salespeople are not effectively engaging them. In addition, salespeople who are aligned in understanding their buyers needs and develop a clear path to success, win the sale 74% of the time. Not too shabby!
So with this in mind, before you try to develop the metrics you want to manage your salespeople around, you first need to map out your buyer and understand how they want to be sold to. Not surprisingly, this kind of thing can get way too complex and nuanced, so let’s try to keep it simple (it’s the only way my brain can process).
What kind of sale are you?
First let’s think about what you are selling, which we can put into four buckets.
- Transformation Sale – You are selling something that will take a company in an entirely new direction or will overhaul their infrastructure. These are going to be multi-million dollar, multi-year sales. Companies that fit into this bucket would be large consulting firms (redesigning a corporate strategy or a business process overhaul), Salesforce.com (putting your sales, service, and marketing systems onto a single platform), Oracle, SAP, etc.
- Unknown Solution Sale – Companies have a problem they would love to improve upon, but weren’t aware there was a solution that could help. Our company would fall into this bucket in that every company desires to grow sales by making their existing team more productive, but aren’t aware there is a solution to help fix that. Others in this category would be HubSpot (generate better quality leads), Influitive (get your customers to advocate for you), and Xactly (reduce the hassle of managing commissions). If you’re a high technology company like we are, those companies may seem obvious to you (meaning you wouldn’t call them “unknown solutions”), but are still in their infancy in overall market penetration.
- Consolidation Sale – Companies are already investing in solutions to various problems but there is an opportunity to consolidate multiple vendors. Good examples here would include Zenefits (pulling together your HR needs), Concur (manage expense reports and book travel in one spot), and CareerBuilder (find candidates and manage your recruiting pipeline).
- Competitive Sale – This is in highly competitive markets where there are several similar vendors and the client is going to select a winner based on the ideal balance of price, capabilities, service levels, and ease of working together. While it’s not the only factor, price is a major factor for this type of sale. Examples here would be your cable/communication service, computer equipment, or steel.
Once you determine the type of sale that best matches your company, then map out the buyer who aligns with that type of sale. These are your buyer personas, which I would map to the above in this way:
- “Transformational Sale” Buyer – Selling to the C-Suite and potentially even members on the board of directors. Others in the company will be involved, but the C-Suite will drive this.
- “Unknown Solution Sale” Buyer – While you’ll strive for awareness in the C-Suite, here you are really selling to the VP-level buyer. Again, others will be involved, but the VP is the one you want agreement from that there is a problem that they would like to fix it, sees how your solution can help, and either has the budget or can create the budget.
- “Consolidation Sale” Buyer – This is going to be at the VP and Director level, and would require building relationships with multiple people to understand their needs, and where they spend their money today so you can propose a consolidated solution.
- “Competitive Sale” Buyer – Here you are mostly working with procurement. If it’s a large purchase, you’ll have awareness and a line of communication into the VP-level with the hope that when it comes time for a decision, you can get them to lean towards you as a tiebreaker.
Do you have the right salespeople?
As you go through these steps, you’ll need to consider if you have the right salespeople that match these profiles. For example, you may be thinking that you fit into the Unknown Solution Sale where you need to be selling at the VP-level, but realize that your salespeople are calling on manager level people or haven’t been trained or equipped with the tools to have an effective conversation at the VP-level. This is a combination of hiring the right people and enabling them with what’s necessary to win.
Aligning sales behaviors with your target buyers
Now, let’s go back to the original question – do you really know the behaviors and activities your salespeople should be focused on day-to-day? If you think about the above approach of starting with your buyer, you’ll realize that maybe it’s not as simple as just “making calls” and “getting meetings.” The obvious activities and results that are relevant across all types of sales include creating a certain amount qualified opportunities or certain open pipeline size, and of course – closing sales! But let’s look at some examples of the leading indicators and activities that will result in creating pipeline and closing sales.
Sales KPIs for The Transformational Sale
- Face-to-face meetings with C-Level executives
- Key-exec to key-exec meeting (for example, getting your CEO to meet with their CEO)
- Acquire needs from all key influencers and stakeholders
- Third party influencers engaged (for example, if you are selling Salesforce.com, an implementation firm has been selected)
- Custom demo environment presented to all stakeholders
- Pilot group has been secured
Sales KPIs for The Unknown Solution Sale
- Meaningful conversations with VP-level contacts
- Completing a value assessment (could be taking a prospect through an assessment tool you created, or having them speak with some key contact at your company to discuss how you can help)
- Delivering product demos
- Signing up pilot customers
- Going through an ROI calculator
- Sending out proposals
- Sharing thought leadership content (measured by open or download rates)
Sales KPIs for The Consolidation Sale
- Introductory meetings with key department heads
- Existing service providers and estimated spending identified
- ROI summary delivered and agreed upon
- Target switch date determined
- Free trial launched
- VP-level contact engaged
Sales KPIs for The Competitive Sale
- RFPs received
- RFPs responded to
- Response time to requests (being highly responsive is crucial in this type of sale)
- Talk time with influencers
- Decision maker identified
- Decision maker agreement that we understand their need
So before you start throwing out your sales teams KPI’s as dials and demo’s, make sure you step back to consider your buyer first. Only then can you truly know how to manage the performance of your salespeople – instead of just managing their quotas.