Key Performance Indicators Every Sales Team Should Be Using
I could start by naming and describing a series of individual KPIs, but I feel it’s important to deconstruct the different components of KPIs to really understand how they benefit sales teams.
What Exactly Are KPIs
Something is defined as a KPI when:
A) It is very important or Key for your company. Key measurements are those that determine the success of your business (such as conversion rate per quarter).
B) It is associated with Performance, meaning it can be measured and quantified. Performance can also be directly influenced by your team.
C) It is an Indicator, meaning it indicates the state or level of something. In this case the overall success of your sales team.
In summary, KPIs are a set of gauges or indicators that will measure data and help the sales team reach its desired goals.
The following are the 5 most important KPIs every sales team should be measuring to better understand its own performance over time and make any appropriate changes.
Rate of Contact or Reach Rate
For those sales reps engaged in outbound sales activities, contact or reach rate is a crucial KPI that should be measured. Rate of Contact can be defined as the percentage of outbound activities (calls, emails) that result in a meaningful conversation with a decision maker.
According to Pete Gracey from AG Saleswork out of every 1000 calls, sales reps should be reaching 362 prospects and adding 32 opportunities to their pipeline.
If your team is performing better, share your secret with us! If not it might be time to go back and work on your pitch.
Lead Response Time
Speed is a crucial factor in increasing the success of a sale. A Harvard Business School study concluded that reps who contacted leads within 1 hour of receiving an online query were nearly seven times as likely to have a meaningful conversation compared to those that tried contacting the customer even an hour later.
The average response time among companies that responded within 30 days was 42 hours. By incorporating lead response times as one of your KPIs your team can drastically increase the number of meaningful conversations with decision makers.
Rate of Follow-up Contact
Your team might be great at following up within the hour after an online query has been submitted, but what is their course of action if the lead fails to pick up the telephone? Will they be persistent or simply desist?
Following up is one of the most overlooked aspects of sales. Robert Clay from Marketing Donut claims only 2% of sales occur during the first contact.
If a lead says “no“ the first, second, third, and fourth time they get contacted, your rep has to be persistent and keep on following up, since according to Mr. Clay 80% of prospects say “no” four times before saying “yes.”
This information does not give you license to be an obnoxious telemarketer and call four times in under 24 hours. Space your calls and emails within a reasonable time frame and listen to your prospect’s objections carefully before taking “no” for an answer.
By monitoring this KPI you will get a true snapshot of how many times and how often your reps are following up.
Marketing Collateral Usage
This is not one of your typical sales KPIs but in the interest of optimizing budgets and unifying the sales and marketing departments it is something worth measuring.
Marketing departments allocate sizable resources to create marketing collateral such as guides, white papers, case studies etc. It is a pity how in some instances this valuable sales content goes completely unnoticed and unused by sales reps.
In some cases, sales reps are not even aware of the existence of said resources. A clear and easy way to fix the disconnect between sales and marketing is to read our free Unifying Sales and Marketing eBook.
Reverting to the previous point, sales collateral such as white papers, case studies and infographics are valuable content that should not only be shared with prospects but also gives reps a good opportunity to follow up and begin/restart a conversation.
Arguably this is one of the most important KPIs a sales manager needs to measure. Once a lead is converted into an opportunity how many of those opportunities make it down the sales funnel and become customers?
Aside from measuring the overall performance of your sales team this KPI can be very useful in determining the strengths and weaknesses of individual reps. Some reps excel at knocking on doors and creating new business development opportunities yet they lack closing skills. On the other hand some members of your team might be expert closers.
Finding out your team member’s strengths and weaknesses will help you allocate the necessary resources and ultimately increase close rates.
What other KPIs would you add to the list? How important are KPI's at your company?