Sales has been a “gut-feel” profession for so long. Salespeople and Sales Leaders alike have been attributed with some kind of sixth sense that enables them to know what to do and how to do it at just the right time in the sales cycle to score that game-changing deal. This Gandalf-like wizardry has seen many a career accelerate at great speed, only to crash and burn just as fast. But why?
There are many contributing factors at play but one key element is the inability or unwillingness of leaders to be guided in their decision-making by data. There’s a collective belief in the senior ranks that those in sales role just need to get out there and “sell more”. That they should simply make more calls, have more meetings, send out more proposals. And that Sales Leaders simply need to crack the whip to make them do it. The reality is these mindsets are so outdated it’s not funny and the churn in sales talent it creates is not only extremely disruptive and damaging to client relationships and your company brand - it’s hugely expensive.
What’s more is that elementary KPI’s focused on lagging indicators fall well short of providing the insights and intelligence needed to successfully navigate the fog and complexity of today’s new sales and business environment.
Far too often, sales management is conducted strictly with lagging indicators such as:
- Number of units sold
- Gross margin
- Number of different products sold
- Market share
- Gross revenue
- Number of deals won
- Number of deals lost
The problem with analysing and managing only through lagging indicators is right there in the name: lagging. It means, “What has already happened.” By the time lagging indicators become clear, it is too late to change anything.
Of course, lagging indicators are needed - if we didn’t have them, we would never know where we ended up and would be totally lost. We need to be able to look back over time and see how we did. But in managing for the future, we need something that will show us how the activities we are engaging in now will impact our figures for the quarter or the year.
Which leads us to the other kind of KPIs: leading indicators. Leading indicators could be said to be the KPIs that come between the big lagging-indicator victories.
In sales, here are some examples of leading indicators:
- Leads created
- New leads into the pipeline
- Leads converted to opportunities
- Lead-to-opportunity conversion rate
- Sales rep closing ratio
- Team closing ratio
- % of opportunities through each sales stage
- Opportunities proceeding within expected
- Time frame
The Combination of Leading and Lagging
The combining of leading and lagging indicators give you a full picture of your operation. Moreover, the combination gives you a comprehensive look at your risk and allows you to make changes to improve the scene before your lagging indicators come into effect.
It’s one thing to decide what your leading and lagging indicators should be. It’s quite another to begin tracking them in such a way that you can actually use them to gain accurate sales performance insight and skillfully manage.
You could have all of your leading indicators arranged in a spreadsheet, and either have someone who is constantly updating it, or share it so that salespeople can update it with their own figures. The basic issue with such an application - aside from the fact that someone can forget to update it - is that none of them present an instant, visual insight into how all of your leading indicators add up to your lagging indicators, moment to moment, day to day and week to week.
CRM Should Be - But It Isn’t
The traditional CRM approach has been more or less to ”track everything” - primarily the salespeople, their calls, their progress, their activities and so on.
But what should a CRM solution really be? What should it show a company? The answer: Where sales has been, where they’re currently at, and where they’re going. In order for a CRM to do that, it must function with leading and lagging indicators, so it provides real insight. No CRM has truly addressed this issue - until now.
With Pipeliner CRM it’s built right in. Unlike any other CRM solution, leading and lagging indicators are instantly and visually displayed. It’s all right in front of you in the main pipeline view allowing you to instantly see how your leading indicators add up to your lagging indicators. Here's screenshot:
And now with the introduction of the powerful new Advanced Reports feature, Pipeliner CRM finally offers Sales Leaders and Salespeople instant access to the insights they need to make informed decisions that will result in a higher level of individual, team and business performance. Watch this short introductory video to see how easy, yet comprehensive it is:
A CRM THAT ACTUALLY SUPPORTS YOU!
Pipeliner was developed to empower salespeople and sales leaders - not weigh them down with cumbersome data entry and a complex and difficult-to-use application. Pipeliner means smooth navigation through the complexities of today's selling and business environment - bringing a whole new level of consistency and predictability to your business. It is the most visual CRM on the planet, always available and won´t break your budget.
Isn't it time you had the best possible tools and intelligence on which to base your decisions. Click Here to learn more, book a demonstration or register for your free trial.
Image Credit: The Lord of The Rings movie, 2001 - New Line Cinema.