We’ve written much recently on the importance of setting the right sales metrics and KPIs for your sales team, so let’s say you’re ready to go.
You want to take a handful of the most critical metrics and build them into the center of your sales culture. They’ll become the “vital signs” of your sales team. (If you need a refresher, check out this post on the six steps to build a KPI-driven sales team.)
So now it’s time to actually pick them, but before beginning, I’d be remiss not to stress that choosing the right sales KPIs is a self-discovery process. It’s almost like that time in life when your family or mentor tells you that you need to “find yourself.” The experience is entirely and inherently internal. And it doesn’t mean that you are lost, because it turns out that “finding yourself” is a lifelong journey.
Northern Ireland Business Info put it best by explaining that in deciding which KPIs to measure, you must assess your core activities and break them down, complete with whys, whats and hows. (Read more here, but also allow us elaborate on this phenomenon.)
But, where do you begin? With the golden sales KPI question, of course.
How to Choose the Right Sales KPIs
Step 1: The Golden Sales KPI Question
It goes without saying that creating a KPI-driven sales approach won’t do much if you don’t have the right sales KPIs. And that’s no easy task. There are an abundance of activities that salespeople engage in day in and day out. You need to assess all of that and discover the answer to the all-important question:
“Which activities are really meaningful?”
You can start to answer this question by making sure that you’re looking at leading, not lagging, indicators. (Need to freshen up on that terminology? Check out this post.) Just start picking a few. Don’t worry about being perfect — just pick a few as a starting point, and then we’ll narrow it down later.
Step 2: Ask the Right Questions to Yield the Right Sales KPIs
Think about your ideal customer. Ask yourself:
- “Who is the buyer, and how does that company like to buy?”
- “What does that buying process look like?”
- “What are the day-to-day actions we can do to align with the way the buyer likes to buy?”
These valuable insights are the roadmap to uncovering what really makes your customer tick and what makes you successful. Know thy customer, and use that knowledge to advise your KPI strategy.
Step 3: Interview Your Salespeople on the Front Lines
Your salespeople are a valuable source of information for identifying the right activities. Interview some of your top performers, a few middle-of-the-road performers and a few bottom performers.
It may surprise you that none of them have a clear answer, and actually the top performers are often the most clueless. They just “get it done” but aren’t really sure how they do it. Your goal here is to understand, to the best of your ability, what it is they do that they believe correlates with sales success. They’re on the front lines everyday, so give them the mic. But ultimately, you need to be the one to decide (welcome to leadership).
Here’s some guidance across performance levels:
- Top Performers: When you’re talking to your top performers, preface the conversation with something like: “You’re a top performer — what’s your sense as to what you do that is different from your peers that impacts your performance?” and “What do you think others can focus more on to be successful?” They may not always know the answer, but any insight will be helpful.
- Middle Performers: When you talk to your middle performers, ask: “What are you doing that is most important, and how do you keep track of how you are doing?” or “What is your perception of the people that are doing really well and what are they doing that is different?” Also: “What do you want to learn that you don’t understand?” You’ll be shocked that many of these folks know what they should be doing, and admit that they don’t do those things enough. Since this is the biggest chunk of your sales team (60-70% of your entire sales staff), just making small improvements with this group’s performance will make dramatic impact. (Here’s a post I wrote for Inc. Magazine that explains this topic further.)
- Bottom Performers: Then, when you talk to your bottom performers, you’ll likely see that they don’t necessarily know or can’t articulate the reasons behind their performance. This will end up giving you confidence in the importance of doing this in the first place. Ask questions like: “What do you think that your peers are doing that you should be doing?”
Step 4: Get Leadership Buy-In
In order for this to work, you need to gather a lot of data — to keep your research well-rounded. The next phase is to talk to other sales leaders on your team and if you’re the top sales leader, you’ll want to discuss with your CEO as well.
With these interviews, ask questions like:
- “When you think about building a KPI-driven sales culture, what does that mean to you?”
- “What would be the KPIs that you want to manage our/your sales team(s) around?”
Step 5: Assess what you’ve learned
In pulling all of this information together, you can begin assessing it for trends, and to see which metrics really resonate with you. Remember, you’re in this leadership position for a reason, so trust your gut! Pick the top 3 to 4, which can be really hard, but too many will be too complicated and water down the whole idea of keeping your team focused. Can you really say with a straight face to someone, “Okay, Jim, I want you to focus on these 7 things” ? After 3 or 4, someone’s brain just can’t process it, and they just go back to their old habits.
This can be the overwhelming part because you have a lot of data available to choose from, but remind yourself that picking these sales KPIs is just a starting point. These will kickstart your finely tuned sales metrics engine into high gear.
Pick your sales KPIs wisely, but more importantly, measure them and keep an eye on them day-to-day. You will adjust as you discover which ones truly correlate to success and which don’t. As well-regarded sales trainer, Richard Harris, puts it: “Constantly develop new hypotheses.” (Get more of his KPI wisdom here.)
And remember, if you can’t measure it, it’s not worth doing.
Looking for more tips on picking the right KPIs to increase sales performance? Grab a copy of this guide: