Sales Key Performance Indicators (KPI) can give managers the metrics they need to monitor how their team is doing in the field. KPIs can be broken down into two categories called leading indicators and lagging indicators. If you are monitoring the wrong category, you may be finding out too late that your numbers are not meeting your goals. Leading indicators are the results or outputs from sales activities. These include:
- New customers
- Product mix
- Gross margin dollars growth
- Gross margin % growth
- Share of wallet
In contrast, the leading indicators are activities performed by sales people that are tracked. These actions lead to conversions and sales later on in the pipeline.
- How many calls is a sales professional making each week?
- Who are they calling on?
- How many of these calls turn into opportunities?
- How many of these calls turn into sales?
- What is the comparison of this sales professional to others on the team?
By examining the leading indicators, management can look at the actions that lead to the results. Thereby, by improving the leading indicators, the lagging indicators will also improve.
Managing Sales Teams
Monitoring specific KPIs will give you a head start when managing your team, and help with training when the numbers aren't meeting goals. Since these indicators are measurable, you can easily see how your team is doing.
New Contacts Rate
It is no secret that it is important to consistently search for new business. Monitoring this rate will inform you how well your team is doing in meeting this goal.
Client Acquisition Rates
How many of your new contacts convert into customers? This will vary among sales team members, however you can also compare week to wee performance to see if anyone on your team is getting burnt out. You can improve this rate by trying differing methods of reaching new prospects and working with lower performing sales people to make them more effective.
Sales Volume Per Location
For physical locations, regions or stores, you can use this metric to determine the types of interest and need in the location, do comparison testing in more than one location and specialize product stocking to meet varying needs.
Existing Client Satisfaction
You can learn a lot about your sales team and products by how satisfied your current clients are. If they love the products, find out why. If they are having problems, you can learn about things that need to be improved and potentially create an influencer out of an existing customer. Staying in touch with existing customers is one of the proven ways to retain long-term business, and referrals to new business.
Sales team members need to be motivated to perform their best work. If they are burnt out or unhappy, they will not give you the results you need. Many of the issues facing salespeople can improve the sales efforts by having sales and marketing work in conjunction. Sales can feed back actual customer interactions to marketing to help marketing focus on where they are misfiring.
Remember that your sales KPIs start in the office before your field reps meet with clients. Whatever system you use to collect leads needs to be examined to determine reach rate, pass rate and pipe rate. Is your lead intake system maximizing the conversions to create leads for your field reps?