It can be tough being a sales manager. You need to constantly monitor your team’s performance, set sales goals and manage business operations. Unless you’re regularly present on the field, you have to rely on field representatives to be your eyes & ears in the market.
However, sales leaders can effectively monitor their team’s activity, compare its performance against goals and manage their field reps better by measuring the right sales metrics about their business, and tracking them regularly. Sales KPIs tell you how your team is doing, what’s working and what isn’t. They provide immediate and measured feedback that you can use to improve your team’s performance and identify new growth areas.
Here are 5 Sales KPIs every sales leader should monitor regularly:
1. New Contacts Rate
New Contacts Rate is the rate at which your team is able to get new contacts (prospects) for your business. You can measure the number of new contacts obtained every week/month and compare it with your team’s targets to get an idea about the overall performance of your team. As you gather more data, you can also monitor its trend over time to know if it’s growing or falling.
You can even dig deeper and break out this metric for each field rep. This will tell you what percent of your team is able to meet its quota, whether their quota is too high or low and who are the top contributing reps in your territory. You can share this information with your reps to motivate them and encourage healthy competition.
2. Conversion Rate
Conversion Rate is the rate of client of acquisition. Out of the new prospects your team reaches out to, how many turn into customers? It’s essential to track this metric every month (if not every week) and compare it against your target conversion rate.
You can break out this metrics to track conversion at each stage of your sales pipeline – outreach, qualification, sales meeting, demo, proposal, quote, and close – to see at which stage your prospects are dropping off. This will allow you to identify the problem area and fix it quickly.
You can even track conversion rates for each sales rep. This will allow you to dig deeper and find out the problems faced by low performing reps – are they targeting bad-fit prospects, is there something the top performers do in their sales meetings that others don’t?
You can go further and monitor the conversion rate for each pipeline stage for each rep. This will help you figure out which rep is doing well in which stage of the pipeline and which ones need further coaching.
You also monitor & compare conversion rates for every outreach method – email, cold call, inbound marketing, and face-to-face meeting.
3. Sales Volume per Location
Monitoring sales volume in each location will tell you where the demand for your product is the highest, where it is the lowest and how it varies with location. Accordingly, you can allocate your resources to focus on high-demand locations. You can also examine these places in greater detail to understand why the demand is so high in these locations, and replicate their strategy in low demand areas.
You can launch special offers or promotional campaigns targeting high-demand locations to boost sales. Apart from promotional offers, you can try out various tactics such as shelf displays, coupons, samples, exclusive deals or demos.
You can also provide customizations for your products & services to cater to these high demand locations.
It also provides an amazing opportunity to run A/B testing campaigns to fine-tune your strategy. For example, if 2 locations show similar sales trend in a month, you can launch a promotional offer in one location and not the other to see if it drives more sales.
4. Client Engagement
Keeping a good rapport with customers after the sale, helps a lot in the long run. It establishes a long-term relationship and improves brand value. By keeping in touch with customers to find out how your product is working out for them and how you can help, your salespeople can build trust and make customers happy. When your team is consistently available to help, customers know that they can rely on your team to support their business needs. Happy customers spread good word about your product and bring repeat business.
You can track the number for interactions each representative has with each of their clients, and analyze it’s impact on the length of the relationship. This will help you understand the optimum communication required to maintain a healthy client engagement, and avoid over as well as under communication.
5. Employee Satisfaction
A sales representative’s job requires a lot of persistence and the ability to face many rejections. So it’s possible that occasionally some might feel dejected or demotivated to continue. A leader is nothing without a good team. As a sales manager, it’s your responsibility to keep your sales reps motivated.
How do you ensure that your team is in sync with your strategy? Do they feel valued to be a part of your team? Do they enjoy their job? Just as you use KPIs to monitor your team, you should also measure your own performance as a sales leader.
You can begin by simply asking your team to rank job satisfaction and your performance on a numeric scale. You can also ask a qualifying questions to understand what makes them happy/unhappy. Try to be as detailed as possible to cover every aspect of your field rep’s job to easily understand what he/she is going through. Some may not like travelling long distance, some may hate cold calling, some may prefer face-to-face meetings, some may not like the prospects they’re asked to contact, and so on. You can compare the results against your goals.
You can begin by creating a simple sales dashboard to monitor these sales KPIs regularly, and sharing it with your team. This will tell you how your team is performing against its goals, which areas are doing well and which ones need your attention. As you feel the need to track more KPIs, you can always add more charts & numbers to this dashboard.
Regularly tracking these sales KPIs will help you understand why your team performs the way it does. It will enable you to systematically improve performance and measure the impact of your actions. You’ll be able to better identify top performers and reward them, identify low performers and guide them. A motivated sales team with a clear strategy works like a well-oiled machinery driving sales and boosting revenues for your business.