Metrics and KPIs there is a difference

Why deals are stuck in the middle of your pipeline.

metrics and kpisI recently read the HBR article on Dismantling the Sales Machine. In addition to being accurate its timing is perfect. We all know the next five weeks are going to be a mad scramble to close business so I thought I would peel back the layers of the onion and provide additional insight.

One of the biggest challenges I see with all sales teams including inside sales teams and field sales teams are the deals stuck in the pipeline. For some reason a sales rep feels the prospect was interested, and now the rep is afraid anything they do will cause them to lose a deal. They are suffering from a case of “Happy Ears”.

What these reps need to see is that they cannot lose something that never really existed. Furthermore they need to grasp the fact that nothing that will exhaust their spirit and kill a sales reps motivation than chasing the proverbial maybe.

My clients ask me, “What do we do now?”; “How do we stop doing this?” and “How do we get these deals moving again?”

Obviously the answer is two-fold, having the right types of OOO (one-on-one) and pipeline reviews will help but unless you know what you are really looking for you will not get very far other than vague answers and a verbal commitment from the sales team to do a better job or go back and try get more information. Which they do reluctantly out of fear of losing the deal and they end up trading price for information.

The real answer can be seen from look at their measurements of metrics and KPIs and goes back to the HBR article mentioned earlier.

When I ask my clients to define and show me their measurements for metrics and KPIs. The answer they give is complex and confusing. When they hear themselves try to explain it out loud that is when a light-bulb goes on above their head.

Time after time people view metrics as KPIs and KPIs as metrics. The purpose of this blog post is to clearly identify the difference between a metric and a KPI. They are two entirely different things.

Metric, as it implies, it’s a number. To be more specific according to Merriam-Webster a metric comes from a Greek origin of metrikos in meter, by measure. In short it’s a number and in relation to inside sales and selling it references things like: number of dials, average talk time, number of emails sent, number of voicemails, number of returned calls, number of returned emails, etc. To imply anything other than a number is to only muddy up your sales process and have your pipeline become bloated with nonsense.

On the other hand, KPIs (Key Performance Indicators) – are the measurements of defined strategic goals accomplished as a result of the metrics. The important thing to remember about KPIs is that you must measure deeper than the surface.

For example:

A BDR (Business Development Rep) has a goal to make 60 phone calls per day and have 7 selling conversations. Often time’s people think that those 7 conversations are the KPIs when in fact they are not. It is the result of those seven conversations that are the true KPIs. KPIs must the specific topics covered within the conversation. Meaning did you talk about BANT (Budget, Authority, Need, Timeframe). And to go deeper, in having BANT discussions did you uncover information that will actually move the deal to the next stage such as qualified, discovery, trial, close, and yes, even lost.

Examining further…

Let’s say your product or services require a technical conversation with someone. What specific piece(s) of information does your sales rep need to gather as a result of that conversation in order to move the deal in a specific direction? That answer is a KPI.

If after a conversation you a sales rep cannot truthfully say they have moved the deal in one direction or other then they have not achieved a measurable KPI and therefore not had a real selling conversation.

In the end you need to make sure your organization is tracking the metrics and KPIs as they relate to moving your sales from one stage to the next. If you do not do this, you are only capturing metrics which will help you discover a problem but not help you solve it.

Chew on this over your long weekend of tryptophan and football. If you need help identifying Metrics and KPI’s for measurement contact us, we are here to help.


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