The performance of a B2B sales team is often measured in one way- revenue generated. How much money have you made? This is obviously crucial to a business’s growth and success, but if this is your only measurement of performance, you’re hindering your team from the off. KPIs in B2B sales need to go much deeper, taking factors into account that can promote specific changes to your sales systems. These small changes are what build a flawless process, closing sales worth more in revenue and quality. By only measuring the big revenue numbers- you won’t get there.
So let’s get up close and personal with KPIs, and find out which ones are essential to a B2B sales team, giving them the detail they need to initiate changes that drive success (and that all-important revenue).
So what is a KPI…?
Back to basics- a KPI is a key performance indicator, used by teams to measure their performance. This is of course- a hugely broad area, and encapsulates many things! You’ll know what numbers and targets you currently use to measure your team, the question here is- are they the best ones? A good KPI not only measures performance, it also helps you understand why a certain performance generated certain results, in both people and systems. You can put this understanding into finding a solution that brings about improvement, or to replicate your best successes, so you’re continually bettering the process you work with and the skill of your team.
So what KPIs work best for B2B sales teams? Here are six of our favorites…
1) Leads converted
With KPIs, you can’t just measure the end result. The whole process needs to come into account. This KPI is a simple percentage, a ratio of leads generated against the amount of lead successful qualified by your sales team.
To maintain a healthy sales pipeline, you need to start with high quality leads that have been thoroughly qualified, so you’re giving yourself the best chances of making a sale. Bad leads, mean very few sales, and the ones you do make, will be poor quality.
Measuring this KPI gives you two very powerful insights; are the leads you’re generating high quality, and is your qualification process working? These are vital questions that set your sales team up for success or failure, so the more insight here, the better!
Of course you could look into a tool to help with this KPI- and this is where Lead Forensics comes into its element! Our software identifies your anonymous business website visitors, and provides detail about the visiting business (including contact information) and detail about their journey across your site, how they found you and what they looked at. This not only generates leads of high quality (they’ve already been on your website- you know they’re interested), but leads packed full of information to help you qualify with care. With up to date contact details, names of key decision makers and a full visit analysis, half the work is already done; you just need to make that first contact! Book your free demo to find out more.
2) Sales converted
Leading on nicely, this KPI finishes off the cycle measuring the ratio of leads qualified to sales closed. This enables you to get a full grasp of conversions, from lead to sale and pinpoint the areas of the funnel that need work.
This can also be used as a measure of changes made to your processes around lead generation and qualifying; if more sales are closed as a result of changes, you’ll know that the system in place for leads is right.
In many ways, this is the KPI most closely linked to that revenue number- it comes down to how many sales are made, so many B2B sales teams use this KPI in a similar way to their use of revenue. It’s helpful for gaining knowledge about the overall process and how many deals you’re actually closing, but doesn’t allow you to pinpoint what makes a successful sale (and what doesn’t), which is still an invaluable piece of information.
3) Contact analysis KPIs
A broad field for KPIs, we ultimately want a measure of what work is done on a daily basis in keeping contact with prospects. Whether its minutes on the phone, follow up emails sent, LinkedIn connections made, you’ll know what measurements adhere to your process the best, but this gives you enormous insight into how your team members use their day.
If a member of your team literally spends every minute of every day on the phone, that’s all very well, but is it the best use of their time? Salespeople need to spread their time evenly, allowing for research and constructing proposals added to their time dialing and sending follow ups. Equally, if someone closes a huge amount of sales, but spends less time on the phone than their team members- what’s the secret to their success?!
This KPI does wonders for understanding how different people work, and what little things your team may be doing that massively affect the sales process, for better and for worse.
4) Average activity to close
This KPI does well to combine our last two, by measuring how many calls, emails, or similar are needed to make a sale. This helps you know what activity is best received; some prospects may not have time for long calls and prefer to check in via LinkedIn. This KPI can be a large insight into your buyer’s preferences, all helping to pad out that buyer persona. If you know how your buyers like to be sold to, you’ll be able to adapt your process to be more successful and slicker for your sales team.
It also helps you look to finding that magic formula, so you can confidently say “five calls, three emails and two pieces of content make a sale!”. Obviously there’s no one solution for every lead, but the closer you can get to finding it, the better you’ll be. This helps too when deciding on future investments. If you know LinkedIn has a good response rate, maybe it’s worth investing some money in getting Sales Navigator or LinkedIn Helper for your team?
5) Average order value
Easy to equate, this KPI is the amount of revenue you’ve generated divided by the number of sales you closed. It’s the dream scenario, having to close less sales, because you’re generating huge revenue for each one. Often, the size of the sale constitutes the amount of work put in, big sales wins come round rarely, take longer to work and require hard graft, but the revenue gained makes it all worth it!
If your AOV is low, that’s when you need to take action. Clearly lots of sales are being made, but the revenue just isn’t there to support it. This means one of two key factors is in play, either your sales team are low-balling your product and letting it sell for a low amount, or the type of lead you’re working with isn’t matched to your buyer persona. If you’re selling to the wrong sort of organizations, they may purchase from you, but the money they’ll part with is small, as they can’t see the full value of what you offer.
So you know what to fix- chat to your sales team and ensure they stand by your pricing, and go back to your lead source establishing your buyer persona is utilized throughout the lead generation process.
6) Average number of days to close
Fairly self-explanatory, how many days does it take to close a sale once a lead is generated? This has several great purposes; measuring ROI for one. When working out return on investment, whether that be on a new tool or a head count addition, time-frame is very important. If your sales process takes 3-6 months, then you’ll need to know before making any hasty decisions based on ROI.
This KPI can also be a huge indicator of how burdened your sales team are. If you’ve only got a sales force of 3, and it’s taking longer than usual to close sales, this may be because they have more leads to work and less time to push leads through the pipeline. Days to close is also a great hint at seasonal barriers, you may find you average a consistent number on this KPI, then in December it plummets and sales take a long time to close. But then in January, it’s better than ever before! This helps you plan your sales targets, based on experience around the seasons your buyers respond to. Needless to mention, it’s a crucial KPI in calculating your…
Sales velocity (a cheeky bonus…!)
In essence, sales velocity is a measurement of your team efficiency, calculating roughly how much revenue is generated by your team on a daily basis. In the business to business world, where sales can take months, sales velocity provides a great insight into your teams productivity an effectiveness. It’s worked out with this equation-
This will let you know if your team are bringing in the results you need. It’s a great way to keep an ongoing measurement of your team’s success across all areas of the sales process. Measure your sales velocity on a regular basis, so you can track numbers and investigate further when you get an unexpected result. This means you’ll maintain a steady performance, and maximize on the results you gain from measuring KPIs.
Why not download our sales velocity calculator? It does all the hard work for you, so all you need to do is pop the numbers in and use the results to fuel your sales team with motivation- you’ll see them closing more sales in no time!
Free guide – Discover how a multi-channel approach can evolve your B2B sales strategy, and prepare your team for success. Download Effective multi-channel models for marketing and sales for free today!