Key Performance Indicators are invaluable when it comes to your business. They are quantifiable measures that can help you gauge performance over time and take action towards your sales goals. However, they are only truly useful if you are using the KPIs that specifically fit your business. You can gather all the data in the world, but it has to be applicable to your business to see a positive impact. Your KPIs are only of value if they encourage action.
Just for clarity a KPI is a measurable value that demonstrates how effectively a company is achieving key business objectives.
So, what makes a KPI effective? We have put together some tips on how to work out your essential KPIs.
Communicate with your KPIs
Think of your KPIs as a form of communication because that’s what they are. They are tools that communicate how your business or sales teams are doing so you can then move forward on solid footing. Just like any successful communication; make them simple, clear and applicable to create the biggest impact.
If you’ve ever found yourself in a meeting that ran too long or could have been accomplished in an email, you’ll know there can be wasted time and effort when communication is not succinct. It’s the same thing here. A lot of time will be saved if you don’t just collect the relevant data you need, but that you also analyse and qualify data to benefit your specific business goals.
The K in KPI is perhaps the most important part of the puzzle. KPIs are not just general data or metrics related to your business. They are created to give you key information about specific areas of your business to show where you are doing well and where you can improve. It means you need to be specific when creating them.
Take time before choosing your essential KPIs. Ask questions about what sales outcomes and goals are important for you to achieve. Why are they important and how is progress best measured? Thinking of KPIs using the SMART criteria can be really helpful here. Asking clear questions at the beginning of the process will help bring in useful data and create a stronger sales process going forward.
Once you have an idea of your essential KPIs, you have to make sure they are actionable. Knowing what data you want is great but it’s only one step. You have to create the right methodology to make sure they are measurable so that you create the biggest impact. This is true of new KPIs, but also vital when tweaking existing ones (especially ones that are just sitting pretty but not really adding any value).
How do you create impactful KPIs? Firstly, know who is responsible for each outcome, how you will know if you reach your sales goal and how frequently you will review the data if nobody is assigned to do that job? Just as you wouldn’t expect a ship to navigate passed choppy waters without a captain at the helm, KPIs need constant honing and direction. Sales data has an expiration date so if you collect data but don’t use it for six months, it may no longer be accurate to your current sales landscape or even your business goals. Put in place regular KPI reviews and use that as a place to readjust KPIs where needed so they are working for you in the best possible way.
And don’t be afraid to get stuck in and make your KPIs completely bespoke for your needs. Using an external standardised set of KPIs isn’t always the right way forward for your business. Think about which KPIs will be useful in reaching your goals. KPIs need to work for you so make sure they come from you and your team.
If you want to read more about why your sales teams should be more data driven or how to get more sales referrals from your current customers then visit our blog. If you want more information on how to streamline your sales processes take a look at our sales accelerator tool.