Easy But Powerful Key Performance Indicators To Track (Part Two)

Easy But Powerful Key Performance Indicators To Track (Part Two)

Be Sociable, Share! TweetIn the last post we talked about general KPIs. In this post I’d like to focus on sales based KPIs. For most organizations, sales is the lifeblood of the company. If you don’t have sales, you don’t have revenue. There are a number of simple Key Performance Indicators you can use to measure how your sales team is performing. Many of these KPIs can be tracked via your accounting software or CRM software out of the box. Others may require a bit of tweaking. Quoted Pipeline ($) – The dollar value of your pipeline measured in a consistent way. We used to track the percentage of low, medium and high probability opportunities that closed and would multiple each “bucket” by the closed percentage. For example, if we had 80% of our high probability, 50% of our medium probability and 20% of our low probability opportunities close while they were in those respective buckets, our quoted pipeline would be (Total $’s in the high probability bucket X 80%) + (Total $’s in the medium bucket X 50%) + (Total $’s in the low bucket X 20%). Win/Loss Ratio (%) – The ratio of the number of leads in vs. the number of deals closed. Once again, this has to be measured in a consistent way. Are you using “qualified” leads? All leads? My preference is measuring all leads. If you get a lot of unqualified opportunities through the door you need to change how you acquire leads. Quotation Conversion Rate (%) – Similar to the Win/Loss Ratio, this ratio measures how many quotes or proposals you generate...
Easy But Powerful Key Performance Indicators To Track (Part One)

Easy But Powerful Key Performance Indicators To Track (Part One)

Be Sociable, Share! TweetI’ve been reading a number of articles on key performance indicators recently and wow – talk about complex measurements!  There are numerous easy to measure key performance indicators that can be measured on a weekly or monthly basis that will tell you a lot about your organization. Why track Key Performance Indicators at all?  As you make changes in your business, or as the world changes around you, you have the opportunity to measure the effect of various influences on parts of your business and do something about it.  If you aren’t going to act on changes in KPIs – don’t bother tracking them. So what KPIs do I recommend tracking?  I have about thirty I’d like to talk about so we’ll break this into a few different articles. Gross Profit Margin (%) – The difference between the dollar volume you sell vs. the cost to produce it.  This does NOT include your overhead expenses (payroll, commissions, rent, taxes, etc.).  You should compare this metric against others in your industry, and if you see it decreasing you either have an issue with how much you are selling, or the cost to produce your products. EBITDA (%) – This is “Earnings Before Interest, Taxes, Depreciation and Amortization”.  In plainer English – it’s your net profit before you do all of the adjustments for taxes and depreciation, etc.  Once again, compare this percentage against others in the industry.  If you start seeing decreases in this but your Gross Profit Margin is staying the same then you may need to look at your sales compensation plans, marketing expenses or...
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