Are you looking for ways to increase your sales performance? Predictive sales metrics could be the answer.
By identifying and capturing the right sales activity data, you can derive insightful metrics that help you better understand how well your team is tracking to achieving their short-term and long-term sales goals.
What’s more, performing with high levels of sales forecast accuracy is largely beneficial to the business when it comes to cashflow, inventory, and staff planning.
- Why meeting sales quotas and profit margins aren’t enough
- How future-focused metrics improve your revenue growth
- What to do if your team is not meeting established activity targets
In a previous blog post, “Does Your Sales Dashboard Provide Powerful Insight?”, I covered why having a sales dashboard is a critical tool in keeping a pulse on how your team is performing and I discussed some key mistakes to avoid when setting one up.
In this article, I’ll break down the differences between key performance indicators (KPIs) and metrics, and how to structure them in your sales dashboard to create insightful and actionable data.
Why hitting your sales quota and profit margin isn’t enough
Most business leaders are accustomed to tracking lagging indicators on their company-level scorecards. These are data points that reflect performance outcomes that assess the current state of the business.
In the sales department, common lagging key performance indicators (KPIs) are Total Sales, Gross Margin, # Units Sold, Sales Quota Obtainment, Customer Retention Rate, etc.
The problem is that this view focuses all your attention on historical performance instead of future pipeline indicators.
Rear-facing indicators, such as how many units you sold in a given month or quarter, are important to track but they tell you nothing about what will happen in the future.
Even when your sales team is performing to quota, that can be short lived without the right balance of proactive sales activity.
Leading indicator metrics provide a picture into how well sales activities are contributing toward KPIs that tie directly to strategic business goals.
Armed with predictive metrics data, sales leaders can take a proactive and targeted approach to sharpening sales skills, heightening accountability, adjusting sales strategy, and more!
Aligning KPIs and Metrics to work together
Metrics and KPIs are often considered the same thing in day-to-day business contexts. However, while they work in similar ways, they are not used for the same purposes.
KPIs measure performance directly related to key business goals while metrics measure the performance or progress of the specific activities or processes that drive toward the KPI.
KPIs are strategic in nature while metrics are operational or tactical. Metrics provide context for business activities whereas KPIs allow for strategic decision-making.
Therefore, all KPIs are metrics but not all metrics are KPIs. This is why it is critical that your sales dashboards monitor both KPIs and sales metrics performance.
Here are a couple examples to get ideas flowing as you consider the right KPIs and metrics for your unique sales environment:
What to do if your sales team is not hitting their metrics
Leading your team to success in achieving their sales metrics involves many factors. It starts with having “the right” sales dashboard visibility, a well laid out sales methodology, and a commitment to sales coaching.
The common challenge I find my small and mid-sized business clients share is not knowing if they have the right sales strategy, methodology and team structure in place to be positioned for success.
This uncertainty tends to translate into sales team metric adoption problems, and difficulty holding sellers accountable for their key responsibilities.
In my next blog I’ll share several tips I’ve learned through my decades of sales leadership experience on how to tackle those roadblocks. Make sure you subscribe so you don’t miss it.
Meanwhile, if you don’t have the bandwidth or sales leadership expertise to develop the necessary sales foundation to achieve your growth objectives, I can help. To learn more how that could work, check out a previous article I wrote called, “How Does a Fractional VP Sales Make an Impact?”.
Or if you’re ready to start talking about how we can partner to design the right metrics to give you more confidence in your sales growth plans, contact me today at (773) 203-7086 or firstname.lastname@example.org.