In our experience, many businesses see the establishment of KPIs as a pen-pushing exercise – a poor cousin in comparison to the set sales targets.
KPIs however, form a vital element of the sales strategy, both for individuals and for the team itself. To explain their importance, I often use the analogy of a journey.
Two groups are given the task of finding their way to Cannes, arriving on a set date and a specific time. One group stays behind and plans the journey from beginning to end, examining the route, timings and various means of getting there; predicting any obstacles they may face along the way which might threaten their goal and ensuring they have enough money for the whole journey. The other group simply gets in the car without any prior planning, and sets off. Only the first group will have a good idea of when they will arrive at their destination, from their initial plan. It is this planning and regular reviewing which act as its KPIs, which will help them to ensure that they reach their final destination on time.
In order to secure shared vision, commitment and determination, it is vital that the KPIs are discussed with and agreed by each member of the team from the outset. They should cover:
- Team targets (ie convert 75% of all projects during the first quarter of 2014)
- Individual targets (ie 60% of day spent with contractors throughout Jan 2014)
- Key tasks
The nature and specific tasks of your KPIs will depend very much on variations including the market sector and geographical area. However, managers must ensure that they follow the SMART principal – that is, that they are Specific, Measurable, Attainable, Realistic and Timely.
I find it useful to adopt a traffic light method for each client account, so areas of strength and weakness can be easily and quickly identified. These charts are also very useful when preparing KPIs, giving specific objectives and demonstrating how the results have a direct impact on the overall sales and business objectives.
Once set, KPIs should then of course be reviewed on a regular basis, both with the team as a whole and with individual members. Any variance in performance can then be identified and flagged appropriately, with remedial actions put in place before any aspect of the traffic light chart turns to amber. Bear in mind that KPIs should always be dynamic. For example, even if a KPI target hasn’t been met, the individual or team performance may still be on course to achieve the overall sales objective, and the KPI target may need to be lowered. Similarly, if a target has been met, then it may need to be increased at intervals, to maintain drive and enthusiasm.