Every B-B sales professional needs to prove their intrinsic value. It goes beyond making President’s Club. Sales representatives should think in terms of building their personal “brand” to improve their corporate visibility, increase their income and position themselves for advancement within their own organization or another. To build your brand think like a “sales leader” with metrics that demonstrate your accomplishments.
There are two types of indicators that are typically measured within every sales organization. The first are lagging indicators. These are measurements after the fact. They look at historical information and they are the easiest to measure. They measure past performance so they are not actionable. Another better metric is leading indicators that measure behaviors. If the right behaviors are being done each day, then the overall future performance should be excellent. Most sales organizations focus on lagging indicators because they are the easiest to measure.
Each organization determines which lagging indicators they should measure, monitor and report on with regularity. Listed below are several common lagging indicators we see measured by sales management. B-B Sales representatives that desire to build their brand would be wise to measure these as well. Savvy B-B sales representatives can use these metrics during a performance review or job interview with an existing or new employer.
Here are a few typical lagging indicators to consider.
- Total Revenue Achieved Versus Same Period Last Year
This metric measures the total revenue you generated this year compared to last year. You should also describe the percent increase.
Example: 2015 Net revenue = $1.5M
2014 Net Revenue + $1.0 M
Percent Increase = 50%
- Number of New Customers (#)
Key to growth in every business is the number of new customers acquired and the amount of revenue they generate.
- New Customer Sales ($)
It’s one thing to acquire new accounts but if they don’t generate much revenue you could be targeting the wrong type of accounts. If your Ideal Customer Profile is tightly agreed upon then new customers should generate a high percentage of revenue. Measuring new business in dollars shows that you can target and acquire the right types of customers.
- Sales Expense ($)
This metric measures the total sales expense for the previous 12 months. It includes all SG & A in your budget such as salary, benefits, travel, training etc. Key is whether you came in at budget or below budget and compared to the net revenue generated. Stand out for making your number and not for being a spend thrift. While an individual sales representative may not have this information, your manager has it. Ask them how you are doing versus plan and versus others within the organization.
- Did You Make Quota ($ and Per Product)?
Key for every sales representative is did they make their yearly revenue target. Remember you don’t need to like your sales quota (i.e. number) but you do need to achieve it. Keep in mind sales managers measure the percentage of the sales force that makes plan every year. In many organizations making quota means not just in terms of total dollars but also by product category is required.
- Closed Opportunities (# and $)
This includes the total number of opportunities closed during the year and the associated currency volume.
- Number of Lost Customers (#)
Customer churn kills a business. Every customer lost equates to a dollar loss. This means that to make your quota you must achieve your growth number plus the amount of revenue lost. If you don’t lose business it’s easier to make your number and it shows a level of customer satisfaction.
- Total Number of Existing Customers (#)
If your total number of customers is growing, then your market share is increasing as long as their purchase volume maintains the market pace. Are you tracking the number of existing customers you have?
- Total Number of Viable Opportunities in the Funnel (#)
Any sales representative can add a lot of opportunities to their pipeline. This doesn’t mean that they are viable. By that we mean they are a match to the organizations Ideal Customer Profile and they have a reasonable chance of winning the opportunity. Top sales professionals have a pipeline that is filled with viable opportunities.
- Total Dollars in the Pipeline ($ or other currency)
Every sales opportunity in the funnel has a dollar amount associated with it. While each opportunity often has different dollar amounts, key is understanding if there are enough total dollars in the funnel to make your number this month, this quarter and for the year. Once that is established the analysis can occur of which opportunities need to be won to make the number.
- Average Deal Size ($ or other currency)
This metric provides insight into your ability to sell at list price or within your pricing guidelines and cross-sell the company’s products. It also quickly allows you to remover opportunities that are not worth pursuing.
- Average Days in Stage (Days)
This metric looks at the average time an opportunity takes to pass through a given buying stage of the funnel. The longer an opportunity sits in a stage the less likelihood of winning the deal.
- Win Percentage & Number (% and #)
This metric illustrates how effective a sales professional is at winning qualified sales opportunities. It’s the number of closed opportunities that you have won. A higher percentage means your ability to navigate the complexities of an opportunity (i.e. discovery, presentation, craft a solution, negotiation etc.) and add measurable value is superior to others.
- Loss Rate (#, $ and %)
Not every sales opportunity can or should be won. It’s important, however, to know if you lost it to a direct competitor, an internal solution or to do nothing.
- Orders Booked (# and $)
These are the number of orders booked and their associated currency volume. It is usually expressed month-to-date, quarter -to-date and year to date versus plan.
- Average Days in Pipeline (#)
This metric measures how long sales opportunities sit in the funnel.
- Average Time to Close (#)
This measures how long it takes a sales representative to get a buyer to make a decision to buy or not. It includes wins and losses.
- Total Sales Cycle Length-Velocity (#)
This metric measures the length of time from the start of the sales process to the conclusion i.e. to win a deal. Since “start and end” times can vary by organization it’s important to define what ‘start and end” means.
- Average Percent Discounted
This metric measures whether the sales professional is able to negotiate effectively and sell at list price or close to it. Anyone can discount the product significantly and win.
- Forecast Accuracy
Sales leadership hates guesswork especially when it comes to forecasting. Top sellers understand their customer’s buying process, who can issue the final “yes,” the process to get an order approved and executed.
- Social Promotion
This metric tracks the number of LinkedIn updates, Tweets and SlideShare presentations posted per month by sales representative via Social media. Think of these as bread crumbs to attract prospects.
Whether you are a sales representative or in sales leadership you must continue to build your personal brand. One of the key ingredients to building your brand is sales is through achieving and/or excelling with all the key performance indicators (KPIs) we have described. These are merely examples. Your organization may use others.
Keep in mind that different organizations use different metrics so your sales metrics may be different. Be sure to verify what your metrics are. Also, keep in mind there are other metrics that organizations use to measure performance such as adherence to company policies and procedures, response to requests etc. In a future blog we will explore actionable, coachable and real-time leading sales metrics.
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- Blog: http://strategicdynamicsfirm.com/blog/
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