BIAS BLOG

12 Quickfire KPIs for sales to get your reporting started

kpi-for-sales

In my experience sales leaders get caught up in trying to drive revenue, recruit and build a culture of success in their team environment. With remote working, the latter is proving harder to do, and industry leaders like my good friend Gerry Hill at Connect and Sell believe that salesfloors are an environment where success breeds success and you can’t easily generate that in a remote team. 

 

That’s not to say that sales reps can’t perform from home, just that a sales environment has its own unique place in business.

 

As someone who has led sales in their own business and sold consultative services beforehand, a little healthy competition between sales reps goes a long way to bringing you success. However, to solve the cultural part, you need standardised sales processes and strong sales enablement. It’s the ability to measure and report on progress across the individual and team as a whole that enables you to incrementally improve, train and grow the team's ability to close.

 

So what and where do you start to measure?

 

What is a KPI?

Well, let's quickly touch on what a KPI is. KPI stands for Key Performance Indicator, which are metrics that you use in your business strategy and reporting to understand how you are performing against the business's or department's goals. Business metrics on the other hand are measurements of specific business activities. An easy way to separate the two.

 

KPIs are widely adopted across many departments and not just sales, like marketing and customer service for example as well as far higher up the chain of command at the C-suite level.

 

In this article, I specifically focus on sales KPIs that should be adopted by your sales team and I’ll tie them directly into using them to report in HubSpot CRM. I mention this as we are a HubSpot agency partner and this is our key focus, however, you can still apply these to Salesforce CRM or Zoho or any of those other premium CRMs available to you.

 

As a side note, a CRM is a Customer Relationship Management tool, typically used by sales and marketing teams to align on customer acquisition. Sales reps record details of their sales interactions with prospects and marketing and keep the CRM updated with how the prospect is engaging with the product or service in its marketing channels.

 

Understanding Your Opportunities

 

The first place for a sales lead to start with their KPIs for sales is to understand the pipeline and where the opportunities are coming from. This is every sales leader's priority, you must understand your lead flow, know what activities to measure, measure your rate of deal qualification and your opportunity to win ratio. These four key metrics are the foundation of your reporting metrics.

 

What is a lead flow?

 

Monitoring lead flow simply means a count of the number of leads that your sales team are working on each month. Depending on the size of your team you can start by setting a monthly target, say 100 leads, then break those down into the sources you want those leads to originate from. Sources could include outbound, inbound, free trials, inside sales and so on.

 

What are activity metrics?

 

If your team is underperforming, say they aren’t hitting their monthly lead targets, you have two options. You can either wait for your marketing team's activities (inbound marketing/ABM) or you can take control of the situation. What you have to do is choose the one key activity that drives the best quality leads, be that cold calling, email, LinkedIn prospecting or another channel, then set a monthly target around that channel.

 

Track your qualified opportunity rate

 

Let’s assume that your sales reps are performing, the leads are coming in, but you’re unsure what the quality is and if there’s any consistency. You need to measure what percentage of the leads move from prospected or inbound to a qualified lead stage in the pipeline. HubSpot has this built into its standard reporting features, but you can still customise further and also use workflows to send updates as they happen.

 

Get eyes on your opportunity-to-win ratio

 

The only way to test that your pipeline is working, that is the percentage of all new opportunities turn into close won deals, is to track your opportunity-to-win ratio. To measure this properly, track it at both the individual level and the team level. Remember what I said about building a culture? Then the litmus test is to use this metric to see how well the team performs and then use successful reps to upskill the less successful reps.



Understanding Your Sales Effectiveness

 

Now that we’ve got the basics in place, it’s time to ramp up your understanding of the effectiveness of your team. Although I’m a big fan of the standardised sales process as it makes it easy to measure performance, as well as ramp up BDRs or SDRs to performance, I also understand that if it just isn’t happening, then you have to cut your losses.

 

This is why it's important to understand your sales effectiveness and know what KPIs you can implement immediately to track it. 

 

Start with your total sales volume

 

This is an easier KPI to track, to implement it, you need to measure the total volume in your domestic currency sold by your sales team on a minimum monthly basis. To ensure growth, you should set a constantly growing target, but factor in seasonal changes such as the summer holidays or Christmas - depending again on your location.

 

Then look at your retained margin

 

To measure your retained margin, at month end take your total volume of sales and calculate it as a percentage of the total sales volume. This assumes all sales have been at full price. Do this regularly and make sure that your team are not on a trend of bigger and bigger discounts just to hit the volume targets.

 

Track your average contract length

 

This KPI not only helps sales but can also trigger bigger questions about your product or service positioning and delivery. This is not a churn metric but can indicate the product isn’t up to scratch as well as if your team are misselling.

 

As we work with subscription-based businesses regularly, this is a key performance indicator that sales leaders in these types of organisations understand. You must measure the average length of the contracts being signed. This doesn’t differ for monthly or annual contracts, take an average of the lengths of the contracts signed month on month and ensure the trend is upwards rather than downwards.

 

Measure your sales cycle length

 

One killer activity that hurts your sales team is extended sales cycles. Lengthy sales cycles can give the impression that there is a lack of sales so reporting sales cycle length to the c-suite is key to giving an understanding of how your product or service is purchased in the market.

 

If revenue or sales targets are hard to reach quickly, it gives you less room to manoeuvre or adjust your strategy, especially in a downturn. You can address this strategically, through an account-based strategy, but in the short term, you can capitalise on HubSpots CRM reporting tools to measure the average time it takes a lead to become an opportunity and move into a closed won deal. Ultimately, the quicker the better.

 

Understanding Sales Holistically

 

So far we’ve looked at performance indicators that are tight on particular stages of the funnel, in this next section, we look at the bigger picture and the holistic view of your sales organisation.

 

To get started I want to look at your average retention rate, this KPI for sales teams helps open more conversations with other parts of the organisation. It helps you understand how the product or service is being adopted and targets your focus to either a bad sales experience or an underperforming product which takes longer to resolve.

 

Your average retention rate

 

Depending on the business this metric can look a little different. This focuses your reporting on measuring churn and retention post-sale. 

 

If your retention rate is low as mentioned it can indicate a problem in the sales process like misselling. By measuring which percentage of customers churn on a monthly and annual basis (depending on what's best for your business) you can start to work on resolving the issue.

 

The sales cost:sales volume ratio

 

Another sales KPI is to measure the total cost of your sales efforts in a month versus the total sales volume generated by your team that month. Or to make the data even more accurate, factor in your sales cycle time into the formula. Once you do that you can convert that to a ratio and report that as a percentage.

 

The use of collateral

 

Whilst collateral is the production of your marketing team, to make sure that your collateral pays dividends in your sales enablement you need to measure its effectiveness. HubSpot has a feature that allows you to upload the collateral as files and share it as links which are tracked and measured and therefore reportable.

 

Whilst the collateral can also be brochures, videos or micro websites, again, by capitalising on HubSpot's integrated marketing, sales and customer success tools both teams can effectively create, update and execute more improved collateral.

 

Measure what percentage of successful sales made use of a piece of marketing collateral and report on this as part of your monthly sales reporting.

 

Finally, measure your team's morale

 

Whilst it's not a revenue-measuring performance measure, keeping on top of your team's morale will pay dividends long term. Culture is a key part of churn in teams as well as performance in deal closure 

 

Measure morale in the team with a mixture of surveys and qualitative discussions with team members. You can record the employee happiness in the team in a quantitative manner and see how it correlates to sales performance.

 

And that’s it.

 

These are my twelve quickfire KPIs for sales leaders to get your reporting started and all of them are implementable with HubSpot CRM or Salesforce, whatever it is you are using. But remember this, the future of sales organisations is under the RevOps banner with highly integrated marketing and sales teams. And if you're looking for marketing KPIs and metrics, this article also supports those.

 

The technology that is used will improve or impair your ability to sell and close deals and as year on year more and more tech appears in the market your ability to do more, learn more and execute faster will become more apparent.

 

It takes a brave sales leader to build a tech stack that enables rather than skimps and forces the rep to do more. I can’t advise what it is you should do, but at some point, your underinvestment could cost you more than a little market share.

 

I’m always happy to review your current tech stack and you can schedule me to do that here on this link, and hopefully, these KPIs get you on the road you need to bigger and more comprehensive performance measurement indicators.

 

 

ADD A COMMENT

BY Paul Sullivan

SUBSCRIBE VIA EMAIL

EBOOK

SaaS Marketing? We've got you covered,  jump in and read our  Guide to Saas Marketing

EBOOK

Are you an enterprise marketing or sales leader? Dive into this Account Based Marketing Prospecting Guide

EBOOK

Learn more about B2B Chatbots in The Art of Conversational Marketing

EBOOK

Want to know how to drive better traffic to your finance website? Check out A Guide to Financial Services Lead Generation 2021

EBOOK

Read our fantastic eBook on improving your customer acquisition strategy? The Ultimate Guide to Buyer Personas

EBOOK

Are you trying to learn how to use conversational strategy works? Read Chatbots in Business

EBOOK

Struggling to figure out Linkedin? Read our Definitive Guide to Linkedin For Business