When someone mentions “sales performance,” images of quota charts or similar KPI’s surely come to mind. While charting outcomes is part and parcel of all sales organizations, any seasoned Sales Leader will tell you measuring sales results does little, if anything, to actually help drive numbers during the quarter. Enter Leading Indicators: a measure of the quantity and quality of daily activities required to bring in new opportunities, facilitate current ones to close and affect sales outcomes before the reports come out.
Maximizer’s Sales Leader Edition of our legendary software has staked a claim in the CRM space by deploying Leading Indicators in our powerful built-in reporting and alert system. What follows is an explanation of WHY we’ve done this, and how it positions those accountable for revenue to lead their teams to success better than even before.
The True Value of Leading Indicators
As a Sales Leader, having a detailed and transparent view into what your sales reps are – or are not – doing is like peering into a crystal ball that will not only show you if upcoming quotas are likely to be met, but also gives you the foresight and intelligence to affect sales outcomes – before you close out that quarter.
In short, lagging indicators such as quota or revenue reports show what sales reps have DONE. In contrast, leading indicators are the measurement of what they ARE doing or are likely GOING to do. The value of Leading Indicators is that Sales Leaders can use these metrics to not only better predict outcomes, but also take advanced action toward better outcomes.
Types of Leading Indicators
Activity Metrics are exactly as they sound – what specific activities are your reps completing, and in what numbers? More importantly, what do you want them to be doing and in what volume? Sales Leaders who place high importance on activity metrics will take the time to set up their CRM with activity quotas for things like number of cold calls to be made, follow up emails to be sent, pitch meetings to be booked and (drum roll), new opportunities to be identified.
Conversion Metrics – assuming you have a solid sales process, watching deals progress through the funnel stages provides that adrenaline rush reps and leaders thrive on. Moreover, it gives compelling intel on where in the pipeline deals are getting hung-up, signaling the required intervention to grease the right cogs. And for those in the life-time-customer game, that bottom-of-funnel sweet spot is a renewable resource for subscription or other annuity-based businesses.
Outcome Metrics – remembering that we are still talking about leading indicators here (vs. sales/revenue outcomes). Outcome metrics are a blend of the above two metrics, and then some. They are often highly customized and in many instances are simply a measure of “what actually helps wins deals” in your organization specifically. Do faster lead time responses increase or decrease win rates? Do number of follow ups speed up or slow down the sales cycle? Deal size, customer acquisition costs, pipeline attrition, customer lifetime value….all examples of outcome metrics that may help you better predict sales success probabilities ahead of revenue reports.
Choosing Your Leading Indicators
Take a holistic and comprehensive approach but as the cliché goes, less is more. Being focused on the most relevant (as well as the most achievable) leading indicators sets up both rep and leader for success. Pro Tip: Consider what data will make for dashboards that really resonate – that tell the story you want to hear and the action you want to see.
Selling More with Leading Indicators
At a tactical level, leading indicators help managers hone in on sales reps’ activities and, in the process, identify their best and worst performing team members. It is the very best use of a Sales Leader’s personal bandwidth to know who needs more direction and coaching, when and with which deals, to maximize results. By the same token, a rep’s time is well spent with a leader who can provide continuous and customized feedback aimed specifically at helping them achieve a new personal best with each passing quarter.
Learn more about Maximizer Sales Leader Edition, and how these features increase sales success through leading indicators:
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