Why This Simple Sales KPI Is The Most Important

Jun 21, 2019 | Uncategorized

How A Single Simple Sales KPI Doubled Revenues

Photo by Eric Rothermel on Unsplash

I’ve spent many many hours trying to figure out how to manage the performance of our B to B sales team. Eventually, after I put my pride and pig-headed nature aside, I landed on some insights and a big sales KPI breakthrough that have helped significantly in terms of revenue at our company.

Insight #1

In terms of sales personnel, hire as smart as possible. C-level clients want to work with smart, actualized people. They won’t trust any other type. Conversely, mediocre reps return less than mediocre results.

Insight #2

Don’t hire smart people and then micromanage them. We hold individual progress & performance reviews with our reps every 90 days to shake out roadblocks and celebrate wins.

Insight #3

A good B to B rep has a learning mindset. If the environment is right, reps gain self-insight, collaborate, then improve.

Insight #4

Reps generally resent being told to keep notes, fill out fields in a CRM, and run on scripts. I struck a Devil’s Bargain with my team. We stripped all but three major functions from our CRM, and moved from scripts to talking points. In exchange, we required 100% compliance on a looser structure. It was a fair trade for everyone.

Insight #5

Building sales quotas is for the birds. There are too many external variables that can mess up a deal. Sales quotas create undue pressure. They focus on results versus creating and maintaining a standard process, such as adequately qualifying leads.

Breaking Down Our Processes

To begin, my team and I broke down each of the critical functions within a rep’s process. Within that breakdown, we searched for two specific things: ‘force multipliers,’ and anything that a rep could control 100% of the time (a rep cannot be accountable for something if they do not also have the corresponding control over it).

Many functions we analyzed were of great importance but not force multipliers, including relationship building at conferences, personal branding, qualifying leads correctly, and asking for referrals. I also considered their closing skills, but there wasn’t a gap to close as our reps are experienced and good at what they do.

The process did uncover an opportunity to improve conversion rates by a few percentage points through reversing risk for clients. Helpful, but not the force multiplier. I also looked at the team’s qualification skills, which are valuable, but not my elusive force multiplier.

Uncovering The Obvious

The Elusive Force Multiplier KPI I was seeking to help my team was hiding in plain sight. The good old sales KPI of meetings per day per rep. No matter how I ran the math, the number of meaningful conversations per day per rep was the only KPI with a potential force multiplier effect. Meetings per day per rep was also a metric a rep could control.
Testing My Theory

First, I followed Insight #5 and removed the burden of hitting sales quotas from the team. They were pleased but cautious, as they knew something was afoot.

Second, I told them that they now only had one KPI to work towards: meaningful meetings per day per rep. Because we sell big-ticket B to B software, I set the floor at two phone or in-person meetings per day. Attending a conference, would count as ten meetings. We all agreed that this was an attainable challenge that reps could meet through medium effort.

Third, each rep had 100% control over ‘how’ they were going to reach their two meaningful meetings per day. I did not care what kind of meeting it was: rock turning, follow-up demos, chatting with a pal who could send referrals, qualifications, even meetings to help a prospect find a vendor. They had the freedom to work with leads, prospects, existing or past clients, fellow vendors — it just had to be meaningful.

Given we have quality people with a good skill set and resources, I felt confident that revenue would increase if they achieved only two meetings per day.

Sales KPI Test Results

The team understood that their commitment to the single, attainable, and controllable KPI was non-negotiable. To that end;

  • One rep did not embrace the new KPI and sat on his hands in protest. He was let go.
  • One rep tried very hard to meet the KPI, but it was not attainable for some reason. She and I worked together to find her another position within our company, and I’m happy to report that she is thriving in that new role.
  • The remaining five reps embraced the single sales KPI of two meaningful meetings a day. Their business development skills, work rate, and personalities were the same. They focused on ensuring they had a minimum of two meaningful meetings a day. It was all about maintaining intention and focus.

So here is what happened: we started the process in February and in March, sales doubled year over year. We continued through March and in April, sales tripled year over year. We have maintained the single KPI process, and revenues each month are still doubling to tripling year over year.

Management can realize incremental improvements in terms of closing techniques, qualification abilities, communication skills through training, mentorship, and other such methods. However, when you hire smart people, there isn’t much management can add… except to help them refocus their efforts back to meaningful tasks. In our case, that refocusing produced a significant lift in revenue and more interested and engaged reps.

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