What KPI's are most important to track?

I get asked this question a lot - what are the most important KPI's to track?  I'd like to say they are the same for everyone but they're not.  Businesses are different - some businesses have very specific leverage points (e.g. the quantity of trades in foreign currency exchange before a "conversion" happens).  Yes, there are common areas but it's helpful to know the business before identifying critical KPI's.

However, let me offer some framework that may prove helpful.  Now, the context of my comments are relating to inside sales operations.  If you're running an inside sales team, I'd like to suggest the following as the framework to organize and structure your critical KPI's:

1)  Activities.  You need to know whether the team is doing the basics.  Are they executing on fundamentals.  Pick up the phone, call the customer, have a conversation.  These are simple:  daily calls, daily conversations and daily talk time.  There's no magic in this, these are fundamentals.  Reps making 20 calls a day and having 2 conversations is in a very different place than someone making 65 phone calls, having 18 conversations and 2.5 hours of talk time.

2) Quality of conversation.  Is the rep on the phone talking to family or sports radio or sitting on hold lines for 30 minutes at a time.  A twenty minute conversation with a customer is worth a lot more than 20 minutes of hold time to the same number six times a week.  Repeat conversations to the same customers when quotes are being generated are a lot more productive than 100 phone calls to 100 different companies, with each call spent on trying to find the right person to talk to.

3) Results/output.  If the cash register doesn't ring, you don't have a sales team.  They may be very productive in picking up the phone and building great friendly relationships, BUT the cash register must ring if you're selling products or services.  These can show up as line items per order, average order size, cost per order, gross margin % per order, units sold, trailing twelve months (TTM) revenue, etc, etc.

KPIs' can tell you a lot about your business.  Just make sure they are aligned with the nature of your business and that you're focused on the right indicators.

www.irgilyeat.com

 

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