5 Fundamental Sales KPIs you Need to Track

[Music] hi I'm David Marin sit with a Zomba consulting group and today in better business management I'm going to offer you a beginner's guide to the five fundamental sales KPIs that you should absolutely be tracking as sales managers now as a sales manager a big part of your job is to identify track and understand key performance indicators or KPIs and that's so that you know whether and to what extent your team is achieving important business goals and can then adjust your efforts accordingly the fact of the matter is that going from the gut just isn't going to cut it any more most well-run organizations use key performance indicators across various levels and departments to get as complete a picture as possible of where your organization is already succeeding and also where improvements can or in some cases must be made thus some of these KPIs can focus on high-level concerns like the overall performance of a business whereas others and the ones that you're more likely to be overseeing will focus on specific processes departments or even individual employees so as a sales manager then where do you start for your department now if you don't already have a lot of good data and process in place the answer is actually pretty simple we recommend you start off as simply as you can while still delivering value I mean as tempting as it may be to track and report on it everything you can think of right from the get-go trying to do too much can overload you and your team and ultimately create more problems than it actually solves Plus what happens if you start tracking a bunch of dead-end data I mean that could result in a whole lot of wasted time and effort and that of course defeats the whole purpose of tracking this information and trying to do something about so instead we recommend starting with five core sales metrics and building from there now these five core KPIs are going to help you identify common bottlenecks in your sales process and that will enable you and your team to focus your efforts both will be most beneficial plus you can always build on the basics later to create more granular or insightful or specific analysis as you hone your processes so it's not like you're just stuck with these by starting with them and remember as long as you establish good long-term data collection storage and consistency practices that data isn't going anywhere so for this reason among others we strongly recommend using CRM to do so if you're not doing that already so the first KPI you should start with is quantity and really that just means how many opportunities are in your sales pipeline and digging a little deeper how many of those opportunities are at each stage in your sales pipeline are there enough opportunities in your pipeline overall or do you need to step up or adjust your marketing efforts are opportunities stalling at particular stages these are the sorts of questions that you can answer once you've got some measure of quantity in your analysis and you need to know the answers to these questions especially if your company isn't kidding its sales goals or if it's recently set more aggressive goals I mean the answer can be as simple as not having enough opportunities to win sales in the first place but if your quantity is high and those opportunities are just sitting there you need to know where where they're stalling out in the Y so quantifying your opportunities can help you to identify bottlenecks in that pipeline and once you've done that you can begin the work of identifying the issues that are causing those bottlenecks so for example are you having difficulty identifying who's likely to buy or with tracking your interactions or following up effectively if any of those things are true you're gonna have difficulty converting opportunities until you can resolve the issues again knowing quantity helps you identify those problems and ultimately puts you on the road to finding solutions the second KPI we suggest you start with is size I mean knowing how many opportunities you have is important quantity matters but how much revenue are they likely to generate in other words how large is each opportunity and that's what size tells us it tells us the average opportunity size in terms of central revenue size matters when it comes to sales there's no getting around that and it's a great way to prioritize your efforts after all if you've got a $15,000 sale in a $150,000 sale at roughly the same point in your pipeline you're probably pumping more resources into the hundred and fifty thousand dollars sale and that's smart you should be size is also a good way to evaluate your lead funnel if you're getting way too many tiny opportunities and not enough medium or large ones you may need to adjust some combination of your marketing efforts pricing scheme and product or service offerings the third core KPI we suggest you start with is velocity and velocity simply refers to how quickly opportunities pass through each stage at your pipeline so do they tend to stall at some stages or move more quickly through others knowing this is important velocity helps you prioritize opportunities evaluate your efficiency and enable accurate forecasting so for example if you have an opportunity that is taking far longer to close than most odds are pretty good that it's not worth nearly as much of your time as one that is of similar size and moving along on schedule so velocity paired with quantity and size can offer you a pretty fair idea of your expected revenue for opportunities which can really help when you're trying to plan your sales efforts for a given evaluation period and velocity can also help you spot patterns if your opportunity progression tends to slow or stall at certain points I mean if those patterns emerge you can focus efforts on identifying and fixing any snags or inefficiencies in your pipeline which is tremendously valuable for you and your team the fourth KPI we suggest you start with is quality quality simply refers to which and how many of your opportunities offer enough value to offset the time and money that need to be invested in that opportunity in order to win it so quality is combining quantity size velocity to ask a very simple but very important question it's just is the juice worth the squeeze wins matter but quality wins are the lifeblood of any successful sales operation if the resources that you need in order to score a sale erase too much of the profit from that sale you're probably better off putting it on autopilot letting your team focus their efforts on higher quality opportunities elsewhere understanding your opportunity quality enables you to maximize the profitability of your sales team you are far less likely to over commit to low quality opportunities especially sizeable opportunities that might initially look lucrative until we actually look at the quality of them the fifth and final sales KPI that we recommend you start with is close rate and close rate simply refers to the percentage of active opportunities that closes each evaluation or bonus period the higher closed rates are obviously better but it's important to evaluate close right alongside other metrics as well a high close rate on too few opportunities may just not be good enough and the same goes for too many small opportunities or too many low-quality opportunities are too many low velocity opportunities you can also break your close right down by size stage and velocity to get a better feel for what factors increase or decrease those close rates and once you have this information you can adjust your sales process to improve fix mitigate maximize whatever you and your team need to do so for example if you find that stalling for more than X amount of time during qualification is just the kiss of death for your close rate then you've got a few options you adjust your process to eliminate stall you adjust your process to mitigate the effects of the stall or you stop throwing resources and opportunities that sit at that stage for too long and what I hope you're seeing here is that as we combine these KPIs we get a better picture of what to actually do with that information so if you're close rate is much higher on opportunities of a certain size your next move might be to break down those numbers and really try to dig into why that is I mean if you discover some secret sauce you might be able to apply it to other opportunities at the very least you'll be in a better position to understand your market build forecasts and allocate resources for your team now once you're ready to move beyond the basics you'll likely want to track other metrics especially as you're getting more sophisticated with your data collection and analysis but again quantity size velocity quality and close rate are really the five fundamental metrics you should be tracking from day one and as you start to combine them you can really do a lot with them and the best part is that because these five KPIs are so fundamental you're always going to have some use for them they're gonna be the building blocks for much of your analysis even as that analysis gets much more specialized and more complicated down the road but probably the best way to build on these basic KPIs is to invest in a CRM system when a quality CRM will allow you to more easily track many different metrics at many different levels of detail and to view and report on those metrics easily and effectively plus if your CRM is well implemented much of that data collection and analysis can be streamlined and sometimes even automated which means that your salespeople spend more time selling and less time actually just entering data for you obviously that's great you want them doing what they're best at so that you can help them do it better now I certainly hope that this video has been helpful if you'd like to learn more about tracking sales KPIs or about how CRM can help you better manage and track those KPIs please reach out to us at as Amba we're always looking to help you out that in the meantime thank you so much for watching and we'll see you [Music]

Channel: Azamba

Views: 23,612

Keywords: Microsoft Dynamics, Microsoft365, Microsoft Dynamics CRM Online, Microsoft Dynamics CRM, Dynamics CRM, MS Dynamics, Microsoft CRM, MS CRM, Microsoft Dynamics 365 CRM, Microsoft Dynamics 365, Microsoft 365, Microsoft, 365, CRM, CRM help, CRM Dynamics, video, videos, QuantaCRM, data, uniformity, accuracy, completeness, azamba, quantarocks, uniqueness, timeliness, crm 101, what is crm, kpi, kpis., key performance indicators, close rate, opportunities, revenue, sales pipeline

Id: ty_Xszi5FiU

Length: 10min 28sec (628 seconds)

Published: Wed Jul 03 2019