Winning organisations are those that regularly manage their Key Performance Indicators (also known as KPIs).
KPIs come in many forms and it is important to monitor these from many areas of your sales based business. As they say “you can’t manage what you can’t measure”.
So what should we measure in our business?
We suggest that you regularly measure, monitor and adjust performance issues related to:
- Monthly sales revenue
- Incoming enquires through walk-ins
- Internet and telephone enquiries
- Number of deals won
- Average order size
- Gross profits
- Lead time to delivery
These are just some of the KPIs which will affect the dynamics of your business. As a manager or business owner, you will then be able to take corrective action to rectify any issues and ensure that you realise a profit each month. Not only should you set KPIs that relate to making profit, you should also set KPIs for your sales staff, each of these KPIs being linked to the overall need to make a profit.
Measuring your monthly sales revenue is crucial, and we also suggest that weekly snapshots are also shared with the team to demonstrate how we are tracking for the month. When we identify lower than normal trends in sales, this is a sure warning bell that we need to check many aspects of the sales operation.
The first real indicator of a potential reduction in sales is a drop in the number of incoming enquiries. This is also an area which we as business managers should become involved – if your marketing isn’t working and your enquiry level diminishes, it’s time to ask questions. Lower than normal enquiry levels can often mean a correlated reduction in sales and gross profit. Keeping your finger on this pulse is crucial.
Measuring to win sales
Measuring the numbers of deals won each month as a ratio of incoming enquiries is also critical. If your “win ratios” diminish then this could mean a number of things have come into play – your competition is smashing you on price, perhaps your sales team is not as enthusiastic about closing deals, perhaps it’s just an objection that your sales team is struggling with, in any case, measuring this KPI is crucial in order for you to get to the next level in sales.
Average order size can also tell you much about what is happening in your business – many factors come into play here – it could be the current product and service offerings are not congruent with a large order value, or it could be as simple as your team not adding value to each sale.
Measuring and benchmarking gross profit is also another valuable KPI to measure. It can give an indication as to what the market is doing to your pricing structure, perhaps your team is discounting too much, or perhaps you have one particular team member that has a pricing phobia? Driving your profits up is a crucial competency of successful business people.
So as you can see, measuring is a simple process, but then acting on trends is the next step to building a more powerful and profitable business – successful companies measure and manage KPIs on a regular basis.
Would your team benefit from learning more about which statistics to measure?
Learn more about crafting a powerful sales process at Sales Training Program, B2B proven program used by National & Global Corporations on August 16-17 – perfect for any team seeking to level up in sales.