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Defining the Key Performance Indicators for Sales That Drive Results
When you engage with Richardson Sales Performance, we work with you up front to define and set of key performance indicators that matter most to you, as well as the critical selling skills you need to drive them right now. From there, we create a customized Learner’s Journey and a detailed Measurement Plan to validate impact. The critical activities we partner with you to complete are:
- Understand your current- and desired-state sales KPIs, goals, and performance metrics
- Identify and prioritize the specific selling and coaching behaviors that impact your KPIs
- Design the right blended approach for your team, using a market-tested curriculum customized to your unique selling environment
- Align your organization around the most important components of your strategy and link selling behaviors to the goals and outcomes that you seek
- Create a Measurement Plan to quantify business impact and inform the learning program
Key Performance Indicators for Sales
To truly measure sales training impact you should be looking at the qualitative and quantitative metrics that translate into actionable sales performance metrics that show financial and operational selling performance and take measurements that reveal the health of your sales team and their ability to position value. You also need to define metrics that are easy to baseline and easy to track.
After decades of working with sales organizations across industries, we’ve determined a core group of sales metrics that are the most critical for revealing the effectiveness of sales training.
- Win Rate: Win rate is a simple gauge of how many new pursuits close with a win status. By isolating competitive differentiation from demand creation, a company can see how well their approach to selling resonates in the field. The win rate often serves as a starting point telling leaders where else to look for clues on business performance.
- Quota Attainment: Quota attainment serves to judge performance against expectations and is a function of how all initiatives are operating. This is a qualitative metric that signals the effectiveness of business strategies.
- Time to Productivity: Time to productivity measures the length of time it takes a new sales rep to contribute to the bottom line. Measuring time to productivity is particularly useful when looking to expand team capacity or when an organization is facing high turnover.
- Attrition: Attrition measures more than a company’s exposure to the cost of high turnover, it is a lagging indicator of other measures such as ramp time, productivity and engagement. High attrition is often a warning sign of systemic problems within the sales team.
- Contract Value: Contract value serves to gauge the effectiveness of a team’s shift to multi-divisional solutions. It reveals the ability of a sales team to create strategic relationships that position the value of multiple products and services.
- Profitability: Profitability is a function of price and product mix. This key financial measurement helps sales leaders understand their degree of efficiency when utilizing resources to win the sale.
- Pricing: Adjustments to pricing are the primary driver of profitability. Effective sellers can control pricing with strong negotiation skills that maintain the value of the deal through the signed contract.
- Sales Cycle: The sales cycle reflects the effectiveness of the sales team and the buyer’s engagement. As teams increase their productivity, the sales cycle decreases, which narrows the distance between the start of the pursuit and the contract. Longer sales cycles drive up costs and can be particularly taxing on a company’s resources.
These sales performance metrics serve not only to answer the key questions regarding the health of a business, but they also lend valuable insight as to where leaders should explore further. Nearly every business will find that they have quick access to data that allows them to leverage at least some of these eight metrics. The earlier that a business begins measuring, the more complete – and therefore – useful the picture will be for leaders affecting change.
If your baseline metrics tell you that your team has opportunities to increase revenue and profits, contact Richardson Sales Performance and we can help you develop a customized training program that will move the needle for your business.