In this episode we will look at KPIs or Key Performance Indicators. These are activities which when carried out effectively lead to revenue results. There are also behavioural aspects to KPIs which are important and shouldn’t be neglected. Everyone has their own business area, so the construct of the KPIs will vary across industries and sectors. What are they for you?
Has your company already defined them for you and you were given them when you came on board? If we haven’t been given KPIs already, then we can create them for ourselves. They provide good markers to know what we are doing and what we should be doing.
First of all, we have to recognize that we cannot do everything, but we can do the most important things in our sales activity. So let’s start thinking about what are the highest priority items we need to be doing, to boost our sales.
These could include things like the following:
How many qualified leads do I have to work with each week?
How many calls to clients do I need to make each week?
How many of these calls are leading to appointments?
How many of these appointments lead directly to agreed deals?
How much am I selling on average per appointment gained?
How many of my buyers become repeat buyers?
We can be setting our own targets for the ratios between each step. It is a good practice to break big revenue targets down to activities, which upon completion will get us to the target. For example, if I have 100 leads to follow up, how many calls do I actually need to get through to the buyer? We can have a long list of numbers to call, but they are not answering, we get a message service, the gate keeper faithfully promises they will pass on the message so that they will call back, as they gracefully slide it straight into the bin. Of the small number of calls which get through to the buyer, how many leads do I need to get an appointment? Talking to the buyer and getting a meeting are planets apart. We have to be persuasive and spark their interest to allow us to take things to the next stage. What is my target for success in this area? What is the closing ratio I want for deals coming from meetings with buyers?
These are very specific targets we are setting and often we will fail. Over time, however we will start to build up some reliable statistics, which tell how strong we are in various stages of the sales process. We will begin to see that there are some areas of weakness, which we need to work on.
Our goals can have a range. We might have a number range that we can achieve comfortably. We might have a higher number which is more difficult but realistic and then we might have stretch targets. So, let’s set some targets for ourselves and once we establish some ratios, we will know how much activity is needed to reach our revenue targets. For example: 100 calls leads to 80 calls making contact with the buyer. Of these contacts, we meet 50 buyers. From these 50 buyers, we close 20 deals. The deals achieved from these 100 calls attempted add up to one million yen. If our revenue target is two million yen, then we know we have to make 200 calls and so on.
Having specific targets for our activity activates our time management skills. We know we have to schedule calls throughout the day, in order to get to the number of people we need to make our target. It is no good just calling everyone from 9.00am to 12.00pm, because some can be reached, but others will be better to call during lunch break, others after 6.00pm, when the gate keepers have gone home, others from 8.30am in the morning. The point is to keep calling and keep trying different times of the day until we can make contact.
Starting the day with targets for activity and starting with no targets, are such completely different approaches. Sales is a diabolical art, where mostly you fail, so you need supreme discipline to do what needs to be done. We have to force ourselves to do the activities or we will never make enough activity effort to be able to hit the revenue targets. Once we know the ratios, we have a guide on how much we need to be doing. As we keep analysing where we are struggling, we can work on our weakness and improve on them, thus advancing the overall ratio of success.
