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

By Aleksey Savkin, bscdesigner.com

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SALES KPIS ON THE INTERNET

• In most cases are simple metrics

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SALES KPIS ON THE INTERNET

• In most cases are simple metrics• It is hard to figure out how to make use of

those metrics

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SALES KPIS ON THE INTERNET

Making “informed decisions” with

KPIs…

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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.

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A TYPICAL SALES FUNNEL

Initial request

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A TYPICAL SALES FUNNEL

Initial request Lead

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A TYPICAL SALES FUNNEL

Initial reques

tLead

Meaningful

conversation

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A TYPICAL SALES FUNNEL

Initial reques

tLead

Meaningful

conversation

Qualified lead

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A TYPICAL SALES FUNNEL

Initial reques

tLead

Meaningful

conversation

Qualified lead Sale

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

PERFORMANCE

Initial request Lead Meaningful

conversationQualified

lead Sale

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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.

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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.

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

PERFORMANCE

Initial request Lead Meaningful

conversationQualified

lead Sale

Reach Rate, %

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

PERFORMANCE

Initial request Lead Meaningful

conversationQualified

lead Sale

Reach Rate, % Pas Rate, %

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

PERFORMANCE

Initial request Lead Meaningful

conversationQualified

lead Sale

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

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

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

• They are lagging KPIs

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

• They are lagging KPIs• They tell us a story of what has happened, but

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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.

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

• Still, these process KPIs are useful

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

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

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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

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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

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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, %

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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, %

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

• The manager of sales department should not be inside the process

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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..

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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

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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…

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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, %

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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, $.

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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, $

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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, $

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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, %

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PUT IT ALL TOGETHER

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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.

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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.

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PUT IT ALL TOGETHER

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

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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.

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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.

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PUT IT ALL TOGETHER

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

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HERE ARE SALES KPIs

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THE VALUES OF SOME KPIs WILL BE ENTERED MANUALLY

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SOME VALUES WILL BE IMPORTED FROM EXCEL OR SQL DATABASE

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THE VALUES OF SOME KPIs ARE CACULATED

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SOME KPIs HAVE NON-LINEAR PERFORMANCE FORMULA

AN EXAMPLE OF SALES DASHBOARD IN BSC DESIGNER

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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

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THANK YOU!

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