Why Your Sales KPIs Aren't Working and How to Improve Them

When you look at a sales team's performance, nine times out of ten, their managers are using KPIs to track them.

KPIs provide a way to put a number to an otherwise hard-to-track job role. Making deals is the easiest way to track performance, but what about the things leading up to it? Are your salespeople putting in the background work to build a solid foundation that will reap results in the future? If you're not sure, this is where KPIs come in.

But what if we told you this could have the opposite effect on performance?

Forbes said, "KPIs sound good but it’s doubtful whether as currently implemented they really enhance performance." A large part of that is probably because KPIs can either exaggerate success that isn't there or underestimate great work.

Sales success speaks for itself at the end of the day, but until you get to the end of the day, are you absolutely certain that you know each employee's abilities and if what they're doing is bringing them closer to their next deal? It's easy to look busy in any job, especially in sales, but busy doesn't mean effective.

No, this doesn't mean you should scrap your KPIs altogether, it just means you should look to improve how you track them.

Track Quality Over Quantity

A classic sales KPI is calls. Make 50 cold calls a day, and surely something will land, right?

The problem with this metric is that anyone can make 50 calls, but are those calls of value? Have your salespeople learned good cold calling strategies? Do they know how to sell a product in a way that shows what's in it for the prospect? Do they even know who their ideal prospect is, or are they just calling any and everybody hoping for luck?

This isn't to say you need to get rid of tracking calls, emails, or LinkedIn InMails. If your salespeople aren't doing them, it would make a lot of sense if they're struggling to perform. But go beyond the numbers and ensure the calls they are making are of value, increasing chances of success.

Heavily tracking quantity over quality means you miss seeing successful employees and the solid relationships they're building with prospects. For instance, you may have a salesperson who makes only 15 cold calls on average a day, but those calls have been carefully curated. They've done extensive research on who to reach out to, understood their pain points, and presented the service they're selling with relevancy and persuasion.

This salesperson is going to have a far higher percentage of success than the person who's mindlessly called through people who have no relevance in what they're selling.

To support your employees in improving the quality of their sales outreach, provide training on effective communication, encourage research and preparation, and use CRM tools effectively. This ensures each interaction is purposeful and informed, leading to better and more strategic success in the long run.

Set Realistic KPIs

Many Sales Managers set goals that are, quite frankly, unachievable.

This can lead to a lack of performance in the long run because employees are more concerned with hitting KPIs to make their manager happy rather than doing the work that's actually bringing in results.

The truth of the matter is that unrealistic KPIs cause stress and frustration, leading to burnout and decreased morale.

Instead, you need to focus on setting achievable goals that reflect the realities of your sales environment. Of course, you need to set KPIs that should push your team to improve, but they should also be attainable long term.

Making the change for realistic KPIs means making the change to regularly review them. They need to remain relevant based on current business needs and market conditions. And if you truly want your KPIs to be of benefit, your best bet is to involve some of your sales team in the development of them to ensure they're reasonable and achievable from their perspective.

Sales is about genuine progress, not about ticking boxes - something that is truly demotivating in the long run.

Don't Allow KPIs to Become Superficial and Competitive

While it's important to track individual performance, focusing solely on individual KPIs can foster unhealthy competition and undermine teamwork.

If you're constantly emphasising KPIs as the ultimate measure of success and standing in the company, you may cause tension or even shame, pushing employees away from supporting one another and towards a toxic sales culture.

It's very common for sales environments to have stats on show that can motivate and hold each employee accountable to one another. There's nothing wrong with this and it can be helpful, but the way you communicate those stats will determine how employees view them.

For instance, communicate that KPIs are a good indication of what you're doing towards success, but they can look different for different people at different stages. It's your job as a manager to change the relationship employees have with KPIs. If your KPIs only highlight failures without providing a pathway for growth, they're not doing their job.

Create a culture where KPIs are used to identify areas for development and encourage your sales team to continuously refine their skills and strategies.

Create Unique KPIs for Each Person

Many Sales Managers take a one-size-fits-all approach to KPIs, which can lead to people either struggling or becoming frustrated because the way they work might be different from others.

As a manager, it's crucial to work with each employee to find a structure that works for them and will reap more results in the long run.

For example, you may have a salesperson who is working to close a high-ticket deal and therefore doesn't have the time to fit in as much outreach right now. 121 meetings are a great way to keep track of such things and provide personalised guidance.

Create KPIs that reflect the unique strengths and challenges of each team member. This not only helps them stay motivated but also ensures they are working towards goals that are relevant and achievable for their specific situation.

- Written by Arun Sutton

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