6 Sales KPIs You Need To Track
Considering the ultra-competitive nature of business nowadays, a company’s sales team must wield every tool available to them. Employers must encourage a data-driven workplace that promotes the efficient use of stats that help their sales teams to make the best decisions. Various schools of thought have suggested that the more stats, the better. However, this isn’t always true. The truth is that tracking way too many KPIs may cause sales managers to lose sight of the KPIs that truly matter. The pressure to hit sales quotas is a burden borne by every sales manager, yet with so many sales KPIs to choose from, confusion and exasperation is almost guaranteed. Here six important KPIs to get you started.
Reach Rate – Your reach rate helps you to understand the productivity of your outbound sales activities. Thus, the reach rate is the percentage of those outbound activities that result in a meaningful conversation with a decision maker. Top-of-the-line sales managers have an average reach rate of about 40 percent, while the minimum reach rate is considered to be 35 percent. Thus if a sales manager makes 1000 calls, he or she should produce at minimum 350 quality conversations. Reach rates serve as a good indication of the efficacy of your sales efforts. In order to increase their reach rate percentages, sales managers will need to take a closer look at the sample lead list for the territory they service. They will then need to ask themselves if they have the most suitable leads possible. If possible, the ideal customer profile should be tweaked in order to refine the lead list. This is where marketing and sales need to do a better job of communicating to make sure efforts aren’t being wasted.
Load Response Time – Lead response time refers to the time it takes for a business to follow up with a customer after the customer’s initial contact whether by calling, emailing or filling out a form. It is also an indicator of how well your company will do on sales. A study in the Harvard Business Review found that if a business’s lead time was less than an hour, the sales representative was seven times more likely to have a meaningful conversation with a customer. In addition to this, the study found that reps were 60 times less likely to qualify a lead. From these stats, it’s clear to see that a customer’s perception of the company and its product or service is informed by the company’s response time. As far as responses go, there is no substitute for a person-to-person conversation. Robocalls and emails will simply not cut it. Business owners must make a concerted effort to reduce the time between initial contact and response.
Clicks from Sales Follow-Up Emails – How the customer interacts with a follow-up email is a good indication of the quality of your follow-up. Your email should be relevant and tailored to the customer in question, providing him or her with the information they need, even if they didn’t think to ask. However, it is important to remember that sending a follow-up email isn’t just to measure click through rates (CTR). But rather, the follow up email is essential to ensure that sales reps have included the links the customer needs. If your CTR is low, it means that your sales reps are hitting a snag. This can be resolved in three ways either (1) sales reps need to be coached on the importance of including relevant links for potential customers, (2) sales reps need to be made aware of the content that is available or (3) management needs to make more content available to the reps.
Rate of Contact – Ensuring that your sales team maintains a high call-volume can do wonders for your sales. Reps should generate 32 leads for every 1000 outbound calls made. Considering that many of these calls are cold, it is of no surprise that such a high volume of calls are required to maintain such a low lead rate. Sales managers must pay close attention to the call logs to ensure that their sales reps are making the required number of calls each day. However, if there is lots of sales activity with little to show for it, it may be a good idea to listen in on a few of those sales calls (whether recorded or live) in order to diagnose any issues that may exist. A few adjustments to the sales pitch may mean the difference between a lead and nothing.
Social Media Usage – While it’s one of the more difficult KPIs to track, social media usage is as important as any KPI. Sales managers need to make sure that their sales reps’ activity on social media is up to scratch. While most professionals use LinkedIn, other social media outfits like Facebook, Twitter and Pinterest are also important. Social media use has a direct effect on sale volumes. However, since there are no clear guidelines on the types and volume of contact, it is up to sales managers to decide what works best for them.
Rate of Follow-up Contact – Far too many times, sales reps do not follow up on a lead a second time. What happens when a contact fails to answer the phone or is too busy to entertain you? Do you give up or do you try again? Unfortunately, according to a survey from the National Sales Executive Association, 48% of sales reps never follow up after the initial call. This is even more tragic considering that 10% of sales are finalized only after the fourth call and 80% between the fifth and 12th call. Not following up means leaving money on the table. This doesn’t mean that sales reps need to become obnoxious in order to make sales. However, they should adequately space out their calls allowing a reasonable passage of time between calls.
When it comes to making healthy sales, it is of paramount importance to pay attention to the KPIs that impact your sales the most. Knowing what works and what doesn’t allows you to put more effort into the former while tweaking or abandoning the latter.