What’s on your sales
dashboard
The process of
developing your sales dashboard and defining your sales KPIs and metrics
What are the sales KPIs
included in your sales reports? Hypothetically if someone can look at your sales
dashboard she should be able to get a clear picture of what is going on
with your sales performances by simply looking at your sales metrics. Is
this the case with your reports? Your reporting should be simple, effective
and obvious so even an outsider can understand your strategy and how successful
your execution is.
Without sales tracking
and measuring progress it is possible but very difficult for you to
successfully manage your sales performance. Is it really possible? Yes,
of course it is possible if you are a good manager and really understand
your business however you’ll definitely waste a lot of time looking for
the data and information you need on a continuous basis. The information
you need daily related to your sales growth progress and business
development success is essential for you to make the right moves. If the
old saying ‘you can’t manage what you don’t measure’ is true than it is
a must for any sales manager or sales executive to have a well organized
sales tracking and reporting system.
This is about sales
reporting and sales dashboards however this is not about the fancy tools
and technology but it is about the meat of any sales success. What you
measure is first and how you organize your reporting is second. Many
sales professionals go with the fancy tools they can get without good
planning first and they miss the real benefits.
What should be really on
your dashboard? Here are a few simple steps you can follow to make sure
you develop the best sales management system for your organization:
1. Look at your overall
strategic plan or organizational goals and strategies. If your
company doesn’t have an official strategic or business plan focus on
what is most important for your executives and what is their primary
focus (what are the most frequent topics they talk about during your sales
meetings). Start from there. Write down in a few sentences what your
major objectives are.
While most business
organizations want to grow their sales there are different strategies
they might use and execute. For example, there are organization where
the only obsession is getting new customers, others try to develop
long-term relationships and are more focused on the lifetime value of
their client, customer or consumer, still other companies are focused on
pushing new products into the market, while others are into developing
sales in new regions and territories…
So as you can see all of
these examples show companies that have strategies in place and they all
want to grow their business however their strategies and tactics will be
very different. Make sure you define your sales and marketing
strategy before you start planning your sales dashboard. What makes
one sales professional a hero in one organization can make him a poor
sales man in another so make sure you understand your organizational
strategy first.
2. Define your top
metrics. Once you have your
sales goals defined and you understand the business strategy which is
supposed to execute the plan and deliver the target results it is time
for you to start thinking about how you’ll measure your sales progress.
Defining and focusing on the right sales metrics or sales KPIs is very
important for you to successfully execute your sales plan. Define your
top sales metrics. Your top sales metrics should be not more than 7 KPIs
– you can start with your top 3 to 5 sales metrics first and then you
can drop or add some later. Mr Dashboard explains the top 3 sales
metrics everyone should track in this
article (make sure you read this
article because it will help you in the process of identifying the right
KPIs for your business).
3. Once you have defined
your top KPIs for sales performance reporting you can test them. How?
Look at what you have on your list and answer the following questions:
‘By looking at these metrics am I able to understand the entire progress
and success of my sales management?’. You don’t go into the ‘How’ and
‘Why’ now but you just need to be able to see the execution progress or your
overall sales results. You need just the few metrics that will explain
the story to you anytime you need to analyze your sales… nothing more.
4. Get tactical. At this point you
need to get into the tactical level or operational or activity based
sales performance metrics. While your top sales KPIs shows you the
overall results, the activity metrics will reveal the entire situation
for you – they should be able to communicate the reasons behind your
level of sales performances.
For example, your ‘Sales Growth’ which is
part of your top metrics will show the result (what is your sales growth
over a certain time period) and your activity based KPIs will show what
is really going on behind the success or the failure shown by your top
sales metric. In other words, the operational metrics show how and why
the actual results are as they are. At this point you can review the
article about
strategic vs tactical KPis by Mr Dashboard which will help
you define your operational KPIs.
5. Putting everything
together. Congratulations! You have successfully defined your overall
business strategy, your sales strategy, your top sales metrics and you
have the entire list of operational sales metrics. Now it is the time to
organize everything together.
Your main goal and priority at this point
is to define the most efficient and effective way to present all of your
metrics. Your sales dashboard should be more than a sales report but
ideally it should represent an effective sales management system that
you are going to use on a daily basis to better manage and grow your
sales and exceed your sales targets.
As a summary, your sales
dashboard is your sales management system so make sure it represents the
reality of your organizational and sales strategy - it is about what is really
expected from you in terms of sales performance and results.
Now, some sales metrics
examples. The following are some samples of frequently used sales KPIs.
You might get some additional ideas for your sales dashboard
development.
The idea of using this list is not to overwhelm you with a
huge list of metrics but to help you think and use different
KPI perspectives and categories:
Category A metrics – Who
is the customer?
Market segmentation.
This group of metrics should identify different segments of your market
– different types of customers and different markets. There are many
ways to segment a market so you need to use the right segmentation for
your business.
Examples here include: sales from different demographic
based segments (for B2C or sales to consumers this is going to be age,
gender, social status, location, occupation, hobbies and interests –
what they read, watch, follow and groups or associations they belong
to), for measuring and using B2B or business to business sales
performance metrics use the industry, region, location, company size,
age of account, type of account, average transaction, size (annual
revenue)…
Your category A sales
metrics:
__________________________________
__________________________________
__________________________________
Category B metrics –
What generates the revenue?
Sales metrics related to
measuring the performance of your service or product. This category of
sales metrics is used to analyze product based sales growth and
performance – examples include measuring and tracking: sales from new
service, sales from new product, sales growth from new service, sales
growth from new product, sales from new product group or product
category, sales from top 5 products vs sales from bottom products, sales
trends of existing products vs sales trend of new products, main product
sales vs sales of additional service, number of units sold, average
price per product category, average unit price…
This category of metrics
should be used by any organization however it is especially important
and crucial for organizations with strong R&D and technology based
businesses. For traditional businesses or commodity sales again you
should use this group in order to identify the most profitable products
and service you should push or the potential products and services you
should sell and promote in a different way.
Your category B sales
metrics:
__________________________________
__________________________________
__________________________________
Category C metrics - Who
sells and generates your revenue?
Different organizations
promote, market and sell their products and services in a different way.
Some companies sell directly to the final consumer and some of them use
intermediaries. In addition, some businesses use heavy advertising to
generate leads (pull strategy) while others sell by using sales reps
(push strategy).
Regardless of the type of your sales organization, it
is important to measure the sales performance of different sales
mechanisms and in addition measure specific groups. For example, sample
of sales metrics here will include sales by distributor, sales by sales
rep, direct sales growth, sales by new reps, average sales by type/group
of intermediary, number of
transactions by group, profitability, conversion rates, commissions…
Your category C sales
metrics:
__________________________________
__________________________________
__________________________________
Finally, the sales
metrics every sales manager needs which are the KPIs included in your
sales funnel. You have to report, measure, track and manage your sales
pipeline or funnel in an effective way so you can make smart decisions
regarding new opportunities, new customers, profitability, closing
ratio, number of prospects in your funnel at anytime…
Do you have the right
tools? While this process might seem overwhelming it is very simple
and easy to do it if you follow the steps and have the right tools. The Sales Manager
for Excel by Mr
Dashboard is a collection of software, templates and easy-to-use
tools
for creating sales dashboard and managing sales funnel with Excel (no
Excel skills are required to use them and create professional sales
reports in minutes). |
