3 Layers of Sales KPIs

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In this presentation I'm sorting out sales KPIs. Instead of long lists of KPIs that one can find on Internet and that are in most cases pointless, I suggest to have a balanced view on sales KPIs:
-- There are KPIs based on conversion rate that are great for process monitoring;
-- There are leading KPIs like "Time to answer a prospect's query, hours" that influence sales outcomes directly;
-- There are KPIs that help sales managers to see a big picture.
Al these sales KPIs make much more sense if used within the Balanced Scorecard

What do you think? Does an approach suggested to KPIs in the article helps in comparison to having a plain list of KPIs?

Published in: Business, Technology

3 Layers of Sales KPIs

  1. 1. 3 LAYERS OF SALES KPIS Based on www.bscdesigner.com/3-layers-of-sales-kpis.htm By Aleksey Savkin, bscdesigner.com BSC DESIGNER
  2. 2. SALES KPIS ON THE INTERNET • In most cases are simple metrics BSC DESIGNER
  3. 3. SALES KPIS ON THE INTERNET • In most cases are simple metrics • It is hard to figure out how to make use of those metrics BSC DESIGNER
  4. 4. SALES KPIS ON THE INTERNET Making “informed decisions” with KPIs… BSC DESIGNER
  5. 5. SALES KPIS ON THE INTERNET Making “informed decisions” with KPIs… “Converting data to knowledge” with KPIs… BSC DESIGNER
  6. 6. SALES KPIS ON THE INTERNET Making “informed decisions” with KPIs… “Converting data to knowledge” with KPIs… Beyond these buzz phrases it is hard to find the real advantage of using a specific indicator. BSC DESIGNER
  7. 7. A TYPICAL SALES FUNNEL Initial request BSC DESIGNER
  8. 8. A TYPICAL SALES FUNNEL Initial request Lead BSC DESIGNER
  9. 9. A TYPICAL SALES FUNNEL Initial request Lead Meaningful conversation BSC DESIGNER
  10. 10. A TYPICAL SALES FUNNEL Initial request Lead Meaningful conversation Qualified lead BSC DESIGNER
  11. 11. A TYPICAL SALES FUNNEL Initial request Lead Meaningful conversation Qualified lead Sale BSC DESIGNER
  12. 12. LAYER 1. PROCESS-ORIENTED LAGGING KPIs HELP TO MONITOR THE PERFORMANCE Initial request Lead Meaningful conversation Qualified lead Sale BSC DESIGNER
  13. 13. LAYER 1. PROCESS-ORIENTED LAGGING KPIs HELP TO MONITOR THE PERFORMANCE On each stage of this process we can measure a conversion rate in percentages. Initial request Lead Meaningful conversation Qualified lead Sale BSC DESIGNER
  14. 14. LAYER 1. PROCESS-ORIENTED LAGGING KPIs HELP TO MONITOR THE PERFORMANCE On each stage of this process we can measure a conversion rate in percentages. Initial request Lead Meaningful conversation Qualified lead Sale For each stage sale managers tend to use a special name for this conversion rate. BSC DESIGNER
  15. 15. LAYER 1. PROCESS-ORIENTED LAGGING KPIs HELP TO MONITOR THE PERFORMANCE Initial request Lead Meaningful conversation Qualified lead Sale Reach Rate, % BSC DESIGNER
  16. 16. LAYER 1. PROCESS-ORIENTED LAGGING KPIs HELP TO MONITOR THE PERFORMANCE Initial request Lead Reach Rate, % Meaningful conversation Qualified lead Sale Pas Rate, % BSC DESIGNER
  17. 17. LAYER 1. PROCESS-ORIENTED LAGGING KPIs HELP TO MONITOR THE PERFORMANCE Initial request Lead Reach Rate, % Meaningful conversation Pas Rate, % Qualified lead Sale Conversion Rate, % BSC DESIGNER
  18. 18. LAYER 1. WHAT’S THE PROBLEM WITH THESE KPIs? BSC DESIGNER
  19. 19. LAYER 1. WHAT’S THE PROBLEM WITH THESE KPIs? • They are lagging KPIs BSC DESIGNER
  20. 20. LAYER 1. WHAT’S THE PROBLEM WITH THESE KPIs? • They are lagging KPIs • They tell us a story of what has happened, but BSC DESIGNER
  21. 21. LAYER 1. WHAT’S THE PROBLEM WITH THESE KPIs? • They are lagging KPIs • They tell us a story of what has happened, but • They don’t really tell a manager how to change a situation. BSC DESIGNER
  22. 22. LAYER 1. WHAT’S THE PROBLEM WITH THESE KPIs? • Still, these process KPIs are useful BSC DESIGNER
  23. 23. LAYER 1. WHAT’S THE PROBLEM WITH THESE KPIs? • Still, these process KPIs are useful • Put them on a performance dashboard BSC DESIGNER
  24. 24. LAYER 1. WHAT’S THE PROBLEM WITH THESE KPIs? • Still, these process KPIs are useful • Put them on a performance dashboard • Use them to monitor the performance BSC DESIGNER
  25. 25. LAYER 1. WHAT’S THE PROBLEM WITH THESE KPIs? Here are some more popular examples of process KPIs: • • • • • Quantity of leads needed in sales funnel, # Conversion rate to sales, % Conversion to qualified leads, % Qualified leads close rate, % Average sales cycle time BSC DESIGNER
  26. 26. LAYER 2. RESULT-ORIENTED LEADING KPIS HELP TO PLAN A CHANGE There supposed to be more useful “leading” KPIs! BSC DESIGNER
  27. 27. LAYER 2. RESULT-ORIENTED LEADING KPIS HELP TO PLAN A CHANGE • Lists of sales KPIs from the Internet have nothing to do with leading KPIs BSC DESIGNER
  28. 28. LAYER 2. RESULT-ORIENTED LEADING KPIS HELP TO PLAN A CHANGE • Lists of sales KPIs from the Internet have nothing to do with leading KPIs • Leading KPIs are normally the result of a long-term research in a company when some consistent patterns are found BSC DESIGNER
  29. 29. LAYER 2. RESULT-ORIENTED LEADING KPIS HELP TO PLAN A CHANGE • Some insights can be concluded using a common sense… BSC DESIGNER
  30. 30. LAYER 2. RESULT-ORIENTED LEADING KPIS HELP TO PLAN A CHANGE • Some insights can be concluded using a common sense… • While some will be a surprise even for business owners BSC DESIGNER
  31. 31. LAYER 2. RESULT-ORIENTED LEADING KPIS HELP TO PLAN A CHANGE • Results of the research* confirm that queries from online prospects that were answered within an hour seven times likely generate a qualified lead. * Harvard Business Review http://hbr.org/2011/03/the-short-life-of-online-sales-leads BSC DESIGNER
  32. 32. LAYER 2. RESULT-ORIENTED LEADING KPIS HELP TO PLAN A CHANGE Here we have a good leading KPI for online business: – Time to answer a prospect’s query, hours benchmark: 1 hour. BSC DESIGNER
  33. 33. LAYER 2. RESULT-ORIENTED LEADING KPIS HELP TO PLAN A CHANGE Initial request Lead Reach Rate, % Meaningful conversation Pas Rate, % Qualified lead Sale Conversion Rate, % BSC DESIGNER
  34. 34. LAYER 2. RESULT-ORIENTED LEADING KPIS HELP TO PLAN A CHANGE Time to answer a prospect's query, hours; benchmark: 1 hour. Initial request Lead Reach Rate, % Meaningful conversation Pas Rate, % Qualified lead Sale Conversion Rate, % BSC DESIGNER
  35. 35. LAYER 3. KPIs TO FORM A BIG PICTURE OF A SALES PROCESS • The manager of sales department should not be inside the process BSC DESIGNER
  36. 36. LAYER 3. KPIs TO FORM A BIG PICTURE OF A SALES PROCESS • The manager of sales department should not be inside the process • He or she should be able to see the big picture and.. BSC DESIGNER
  37. 37. LAYER 3. KPIs TO FORM A BIG PICTURE OF A SALES PROCESS • The manager of sales department should not be inside the process • He or she should be able to see the big picture and.. • Have various sources (including KPIs) to make informed decisions BSC DESIGNER
  38. 38. LAYER 3. KPIs TO FORM A BIG PICTURE OF A SALES PROCESS • The manager of sales department should not be inside the process • He or she should be able to see the big picture and.. • Have various sources (including KPIs) to make informed decisions • Here are KPIs that can be used on this level… BSC DESIGNER
  39. 39. LAYER 3. KPIs TO FORM A BIG PICTURE OF A SALES PROCESS Time to answer a prospect's query, hours; benchmark: 1 hour. Initial request Lead Reach Rate, % Meaningful conversation Pas Rate, % Qualified lead Sale Conversion Rate, % BSC DESIGNER
  40. 40. LAYER 3. KPIs TO FORM A BIG PICTURE OF A SALES PROCESS Total cost to gain a new customer, $. Time to answer a prospect's query, hours; benchmark: 1 hour. Initial request Lead Reach Rate, % Meaningful conversation Pas Rate, % Qualified lead Sale Conversion Rate, % BSC DESIGNER
  41. 41. LAYER 3. KPIs TO FORM A BIG PICTURE OF A SALES PROCESS Total cost to gain a new customer, $. Revenue per sales rep, $ Time to answer a prospect's query, hours; benchmark: 1 hour. Initial request Lead Reach Rate, % Meaningful conversation Pas Rate, % Qualified lead Sale Conversion Rate, % BSC DESIGNER
  42. 42. LAYER 3. KPIs TO FORM A BIG PICTURE OF A SALES PROCESS Total cost to gain a new customer, $. Revenue per sales rep, $ Customer lifetime value, $ Time to answer a prospect's query, hours; benchmark: 1 hour. Initial request Lead Reach Rate, % Meaningful conversation Pas Rate, % Qualified lead Sale Conversion Rate, % BSC DESIGNER
  43. 43. LAYER 3. KPIs TO FORM A BIG PICTURE OF A SALES PROCESS Total cost to gain a new customer, $. Revenue per sales rep, $ Customer lifetime value, $ New customers versus returning customers, % Time to answer a prospect's query, hours; benchmark: 1 hour. Initial request Lead Reach Rate, % Meaningful conversation Pas Rate, % Qualified lead Sale Conversion Rate, % BSC DESIGNER
  44. 44. PUT IT ALL TOGETHER BSC DESIGNER
  45. 45. PUT IT ALL TOGETHER • Prepare a sales dashboard with average conversion rates over a period of time. BSC DESIGNER
  46. 46. PUT IT ALL TOGETHER • Prepare a sales dashboard with average conversion rates over a period of time. • This will help you to monitor the current performance and warn if you something is going on. BSC DESIGNER
  47. 47. PUT IT ALL TOGETHER • Prepare a sales dashboard with average conversion rates over a period of time. • This will help you to monitor the current performance and warn if you something is going on. • Add big-picture sales KPIs to your Balanced Scorecard. BSC DESIGNER
  48. 48. PUT IT ALL TOGETHER • Don’t forget to map your strategic objectives and link them to KPIs. BSC DESIGNER
  49. 49. PUT IT ALL TOGETHER • Don’t forget to map your strategic objectives and link them to KPIs. • Research historical data of your company carefully to find out the drivers of success of your offer and your product. BSC DESIGNER
  50. 50. PUT IT ALL TOGETHER • Don’t forget to map your strategic objectives and link them to KPIs. • Research historical data of your company carefully to find out the drivers of success of your offer and your product. • This will provide you with more leading KPIs. BSC DESIGNER
  51. 51. PUT IT ALL TOGETHER • Here is how it might be in BSC Designer software. BSC DESIGNER
  52. 52. HERE ARE SALES KPIs BSC DESIGNER
  53. 53. THE VALUES OF SOME KPIs WILL BE ENTERED MANUALLY BSC DESIGNER
  54. 54. SOME VALUES WILL BE IMPORTED FROM EXCEL OR SQL DATABASE BSC DESIGNER
  55. 55. THE VALUES OF SOME KPIs ARE CACULATED BSC DESIGNER
  56. 56. SOME KPIs HAVE NON-LINEAR PERFORMANCE FORMULA
  57. 57. AN EXAMPLE OF SALES DASHBOARD IN BSC DESIGNER BSC DESIGNER
  58. 58. STRATEGIC OBJECTIVES AND KPIS LINKED TO THEM
  59. 59. STRATEGY MAP WITH BUSINESS OBJECTIVES AND KPIs BSC DESIGNER
  60. 60. HERE IS A SALES FUNNEL
  61. 61. ADD SOME ACTION PLANS
  62. 62. GENERATE VARIOUS REPORTS BSC DESIGNER
  63. 63. CREATE NOTIFICATIONS FOR RESPONSIBLE EMPLOYEES BSC DESIGNER
  64. 64. CHECK IT OUT YOURSELF Check out Sales KPIs in BSC Designer Online: (no registration is needed) • http://www.webbsc.com/document/kpi/sales-kpis BSC DESIGNER
  65. 65. Find more insightful articles about the Balanced Scorecard in ”Articles” section at www.bscdesigner.com MORE ABOUT THE BALANCED SCORECARD BSC DESIGNER
  66. 66. THANK YOU! Feel free to send us your questions using the contact form at www.bscdesigner.com

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