I bet when you read "Killing your KPI's", your first thought was this was going to be a blog about sales high performers, right?
I'm literally telling you that you should KILL your KPI's. As in buried and dead. As in no longer around.
Ok, that might be a little over the top, but I fear that if I don't push the envelope, you won't get my point about why you shouldn't be basing your sales success on just Key Performance Indicators.
KPI's are important. They do give you a "scorecard" on how someone DID, but I have found that if you are talking about KPI's, the game is already over. If they hit their KPI's, great. They won. But if they didn't achieve their KPI's, it's too late to do anything about it. At least for that game, because it's already over.
KPI's are your rearview mirror. They tell you where you have been, NOT where you are going.
To look forward, you must add Leading Indicators to your sales management measurement toolbox. Leading Indicators are your windshield, your odometer, and speedometer. LI's give you real-time data on how sales are going! They tell you if your team is heading in the right direction, if they will arrive at the right destination, and how quickly they will get there.
How often have you assumed that your sales team was going to hit their goals for the month, quarter, or even the year, and then all of a sudden, something happened and their projections were wrong? Sadly, it happens way too often. Ironically, most account executives are not the best forecasters, which puts sales managers in difficult situations.
So, what should we be tracking as our Leading Indicators? Well, the answer depends on what is important to your organization and what indicators are predictive to the overall success of your team.
Here are 5 examples of Leading Indicators that you can track:
- Number of New Business Appointments
- Number of Needs Analysis Completed
- Number of New Proposals
- Closing Ratio
- Sales Cylce Length
All of these Leading Indicators can, over time, allow you to become a better predictor of success for your sales team. You'll be able to see in real-time if a rep or the whole team is making enough new appointments, presentations, and ultimately sales to meet or even exceed their sales budget.
Killing your KPI's are still important, but knowing your Leading Indicators will be much more valuable in the midst of the process so that you'll know if you will actually "kill your KPI's."