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?

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3 LAYERS OF SALES KPISBased on www.bscdesigner.com/3-layers-of-sales-kpis.htm

By Aleksey Savkin, bscdesigner.com

BSC DESIGNER

SALES KPIS ON THE INTERNET

• In most cases are simple metrics

BSC DESIGNER

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

SALES KPIS ON THE INTERNET

Making “informed decisions” with

KPIs…

BSC DESIGNER

SALES KPIS ON THE INTERNET

Making “informed decisions” with

KPIs…

“Converting data to knowledge” with KPIs…

BSC DESIGNER

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

A TYPICAL SALES FUNNEL

Initial request

BSC DESIGNER

A TYPICAL SALES FUNNEL

Initial request Lead

BSC DESIGNER

A TYPICAL SALES FUNNEL

Initial reques

tLead

Meaningful

conversation

BSC DESIGNER

A TYPICAL SALES FUNNEL

Initial reques

tLead

Meaningful

conversation

Qualified lead

BSC DESIGNER

A TYPICAL SALES FUNNEL

Initial reques

tLead

Meaningful

conversation

Qualified lead Sale

BSC DESIGNER

LAYER 1. PROCESS-ORIENTED LAGGING KPIs HELP TO MONITOR THE

PERFORMANCE

Initial request Lead Meaningful

conversationQualified

lead Sale

BSC DESIGNER

LAYER 1. PROCESS-ORIENTED LAGGING KPIs HELP TO MONITOR THE

PERFORMANCE

Initial request Lead Meaningful

conversationQualified

lead Sale

On each stage of this process we can measure a conversion rate in percentages.

BSC DESIGNER

LAYER 1. PROCESS-ORIENTED LAGGING KPIs HELP TO MONITOR THE

PERFORMANCE

Initial request Lead Meaningful

conversationQualified

lead Sale

On each stage of this process we can measure a conversion rate in percentages.

For each stage sale managers tend to use a special name for this conversion rate.

BSC DESIGNER

LAYER 1. PROCESS-ORIENTED LAGGING KPIs HELP TO MONITOR THE

PERFORMANCE

Initial request Lead Meaningful

conversationQualified

lead Sale

Reach Rate, %

BSC DESIGNER

LAYER 1. PROCESS-ORIENTED LAGGING KPIs HELP TO MONITOR THE

PERFORMANCE

Initial request Lead Meaningful

conversationQualified

lead Sale

Reach Rate, % Pas Rate, %

BSC DESIGNER

LAYER 1. PROCESS-ORIENTED LAGGING KPIs HELP TO MONITOR THE

PERFORMANCE

Initial request Lead Meaningful

conversationQualified

lead Sale

Reach Rate, % Pas Rate, % Conversion Rate, %

BSC DESIGNER

LAYER 1. WHAT’S THE PROBLEM WITH THESE KPIs?

BSC DESIGNER

LAYER 1. WHAT’S THE PROBLEM WITH THESE KPIs?

• They are lagging KPIs

BSC DESIGNER

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

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

LAYER 1. WHAT’S THE PROBLEM WITH THESE KPIs?

• Still, these process KPIs are useful

BSC DESIGNER

LAYER 1. WHAT’S THE PROBLEM WITH THESE KPIs?

• Still, these process KPIs are useful• Put them on a performance dashboard

BSC DESIGNER

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

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

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LAYER 2. RESULT-ORIENTED LEADING KPIS HELP TO PLAN A CHANGE

There supposed to be more useful “leading” KPIs!

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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

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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

LAYER 2. RESULT-ORIENTED LEADING KPIS HELP TO PLAN A CHANGE

• Some insights can be concluded using a common sense…

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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

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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

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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.

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LAYER 2. RESULT-ORIENTED LEADING KPIS HELP TO PLAN A CHANGE

Initial request Lead Meaningful

conversationQualified

lead Sale

Reach Rate, % Pas Rate, % Conversion Rate, %

BSC DESIGNER

Time to answer a prospect's query, hours; benchmark: 1 hour.

LAYER 2. RESULT-ORIENTED LEADING KPIS HELP TO PLAN A CHANGE

Initial request Lead Meaningful

conversationQualified

lead Sale

Reach Rate, % Pas Rate, % Conversion Rate, %

BSC DESIGNER

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

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

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

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

Time to answer a prospect's query, hours; benchmark: 1 hour.

LAYER 3. KPIs TO FORM A BIG PICTURE OF A SALES PROCESS

Initial request Lead Meaningful

conversationQualified

lead Sale

Reach Rate, % Pas Rate, % Conversion Rate, %

BSC DESIGNER

Time to answer a prospect's query, hours; benchmark: 1 hour.

LAYER 3. KPIs TO FORM A BIG PICTURE OF A SALES PROCESS

Initial request Lead Meaningful

conversationQualified

lead Sale

Reach Rate, % Pas Rate, % Conversion Rate, %

Total cost to gain a new customer, $.

BSC DESIGNER

Time to answer a prospect's query, hours; benchmark: 1 hour.

LAYER 3. KPIs TO FORM A BIG PICTURE OF A SALES PROCESS

Initial request Lead Meaningful

conversationQualified

lead Sale

Reach Rate, % Pas Rate, % Conversion Rate, %

Total cost to gain a new customer, $.

Revenue per sales rep, $

BSC DESIGNER

Time to answer a prospect's query, hours; benchmark: 1 hour.

LAYER 3. KPIs TO FORM A BIG PICTURE OF A SALES PROCESS

Initial request Lead Meaningful

conversationQualified

lead Sale

Reach Rate, % Pas Rate, % Conversion Rate, %

Total cost to gain a new customer, $.

Revenue per sales rep, $

Customer lifetime value, $

BSC DESIGNER

Time to answer a prospect's query, hours; benchmark: 1 hour.

LAYER 3. KPIs TO FORM A BIG PICTURE OF A SALES PROCESS

Initial request Lead Meaningful

conversationQualified

lead Sale

Reach Rate, % Pas Rate, % Conversion Rate, %

Total cost to gain a new customer, $.

Revenue per sales rep, $

Customer lifetime value, $

New customers versus returning customers, %

BSC DESIGNER

PUT IT ALL TOGETHER

BSC DESIGNER

PUT IT ALL TOGETHER

• Prepare a sales dashboard with average conversion rates over a period of time.

BSC DESIGNER

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

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

PUT IT ALL TOGETHER

• Don’t forget to map your strategic objectives and link them to KPIs.

BSC DESIGNER

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

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

PUT IT ALL TOGETHER

• Here is how it might be in BSC Designer software.

BSC DESIGNER

HERE ARE SALES KPIs

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THE VALUES OF SOME KPIs WILL BE ENTERED MANUALLY

BSC DESIGNER

SOME VALUES WILL BE IMPORTED FROM EXCEL OR SQL DATABASE

BSC DESIGNER

THE VALUES OF SOME KPIs ARE CACULATED

BSC DESIGNER

SOME KPIs HAVE NON-LINEAR PERFORMANCE FORMULA

AN EXAMPLE OF SALES DASHBOARD IN BSC DESIGNER

BSC DESIGNER

STRATEGIC OBJECTIVES AND KPIS LINKED TO THEM

STRATEGY MAP WITH BUSINESS OBJECTIVES AND KPIs

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HERE IS A SALES FUNNEL

ADD SOME ACTION PLANS

GENERATE VARIOUS REPORTS

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CREATE NOTIFICATIONS FOR RESPONSIBLE EMPLOYEES

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CHECK IT OUT YOURSELF

Check out Sales KPIs in BSC Designer Online:(no registration is needed)

• http://www.webbsc.com/document/kpi/sales-kpisBSC DESIGNER

MORE ABOUT THE BALANCED SCORECARD

Find more insightful articles about the Balanced Scorecard in ”Articles” section at www.bscdesigner.com

BSC DESIGNER

THANK YOU!

Feel free to send us your questions using the contact form at www.bscdesigner.com

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