It’s an old expression, but still valid. Each business and the individual departments within companies have leading indicators of future success. They also have lagging indicators of success. A leading indicator should, to some degree of accuracy, predict future success. A lagging indicator is a look at the past and lends no insight into what could have been done differently to affect an outcome.
Unfortunately, many companies and department heads are more focused on the lagging indicators, not leading indicators. In sales, this is often the case and can be potential for disaster. Sales managers can become focused, almost myopic on sales figures and call reports, both lagging indicators. For the record, weekly or monthly call reporting is often a creative writing assignment on ancient history. Telling you what happened, not what is possible in the future.
So, what to measure? Key performance indicators (KPI’s) for sales are typically those activities that are most likely to lead to the next step in your sales cycle and ultimately a definite conclusion for the buyer and the seller. In other words, a closed deal. As there is no “one size fits all” sales process, the KPIs you should be measuring are going to depend on what you sell and how it sold. Some examples include: prospecting activity, calls made, demonstrations conducted, site visits, proposals delivered, pipeline or opportunity value, and closing ratios to name a few.
I have recently added EOS implementation (Entrepreneur Operating System) to my offering of services and have discovered having the right KPIs or scorecard lends powerful insight into what you, as the leader of your organization or department, must focus on every day. For more information on creating a great Scorecard check out this EOS Worldwide blog post or email me Les@LesLent.com and write “I want a Scorecard” in the subject line. I’ll reach out, and together we can build you one!