Have you ever asked your single friends what they are looking for in a mate? They usually come back with “the list”…..smart, nice eyes, good sense of humor, decent job etc. Very rarely will you hear just one thing. And, at times, the list may be too long and unrealistic.

The same concepts hold true for measuring the ideal sales employee or manager. One KPI or measurement is never enough to assess the entire package, but too many can also cause problems. You need to consider a small group of measurements that together, ensure that you will achieve your department objectives. I have heard this described as a “three legged stool” or “true north”.

Here are five tips for choosing the right sales measurements for your team.

1) Choose KPIS that consider the long term business results

If you only measure achievement of sales quota, you may lose site of whether your customers are satisfied and will renew their contracts or buy more from you in future months.

Many organizations have moved from monthly sales compensation plans to quarterly or annual measurement plans, so that employees keep the big picture in mind.

2) Measure Activities and Outcomes

Outcomes are the “critical few”, measurable, end results that show whether your department achieved success or not. Activities are the set of tactics, enablers or leading indicators that you will use to achieve the desired outcomes. It is important that your management team understands the differences and focuses on the right things

For example, common activities that influence sales goal achievement are the number of sales phone calls and/or the number of customer visits. It is important to measure those, as they enable your sales people to achieve their sales goal. However, I have observed organizations that get carried away with activity monitoring and set black and white activity goals such as “make 100 calls per day”. These activity goals distract your team from focusing on the end goal, which is likely driving sales revenue.
Check out an earlier blog post, “2011 Sales Planning: Activities VS Results VS Outcomes”, for more examples.

3) The Danger Of Too Many KPIs

When I get a report with too many stats, goals and variances my head hurts. It is difficult to figure out what is most important. It’s painful!

Hand pick the most important outcomes and the most important activities and focus reporting and discussions around them. Also think about the layout of your reports and how the stats are displayed. I recommend putting the outcomes on the top and the activities lower on the page.

4) If You Meet Or Exceed One, Is Another Impacted?

Before settling on your list of department measurements, ask yourself and your team, “If we exceed measurement A, what impact will this have on the business? Will exceeding A cause us to miss KPI B”?
The measurements you choose should work together, not against each other.

This is important to consider when you run sales contests that focus on targeted product groups. The product management team may want to see sales growth in Widget ABC and fund a contest. And, alas, you will probably see sales growth in that line, if the contest is lucrative enough. However, at the same time it is common to see a drop in sales in competing products. Don’t Rob Peter to Pay Paul,

5) Align Comp With The Most Important Measurements

Very simply, your sales team will follow the money. Don’t measure one group of metrics and incentivize employees on another. The closer you align them, the more likely you are to achieve your department objectives.

Excited about sales stats? Then, you may also find these posts helpful:

Do Your Sales KPIs Include Digital Body Language?

5 Sales Metrics To Rule Them All

Measuring Sales Performance