How much should your reps be producing annually? What should your win rate be for each product group? These are questions that are often asked and answered with benchmarks. We’ll walk through what you should track, but more importantly, what you do with the information once you capture it.

“What is the standard, and what is everybody else doing?”  You’ve asked yourself this question individually in many different situations.  What you choose to eat, how you decide what to wear to an important event, or even how often you work out in a week.  CEO’s asking how much they should be getting from their sales force are no different.  How much should your reps be producing annually?  What should you be investing in Marketing each quarter?  What should your win rate be for core products?  These are questions that are often asked to understand where we sit in comparison to peer organizations.  This is where the desire from benchmarking usually starts.  The real value, however, isn’t in knowing where you sit in contrast to similar organizations, it’s about what you do with this information and how you use it to drive performance.  This is where a benchmark turns into a meaningful KPI.  Understanding the current performance will drive where you allocate your resources and what initiatives you will prioritize this year to hit your targets.

 

So, what KPIs should you track, and why should you care about them?  Before we get into what the core KPIs are that you should be tracking, we need to review some ground rules.  For KPIs to be actionable, there needs to be a process with the following key steps thought through.  Click here for a simple tool to help document the planning process:

 

 

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  • Identify Data Owner – What team will be in charge of capturing, validating, and reporting data in a consistent output?
  • Capture Baseline Data – You can’t measure progress if you don’t know where you started.
  • Cadence for Collecting KPIs – Identify which need to be captured weekly, monthly, quarterly, annually, etc.
  • Review – Who will review, and how will exceptions be reported up to the executive level?
  • Operationalizing – Documenting the outcomes of executive reviews that have clear actions tied to owners.

     

Through our thousands of engagements and expert panels with private equity leaders, CEOs, and marketing and sales leaders, SBI has developed the following B2B High Growth “Core 10” KPIs.  We’ve separated these into two categories; leading and lagging.  For this article, I will focus on what they are and why you care.

 

For a more in-depth explanation of the calculation of each KPI, review our research report, Making Your Number in 2020.

 

For comparison of how your organization stacks up against SBIs benchmarks for these KPIs, participate in our Revenue Growth Maturity Model Diagnostic.

 

Leading Indicators

 

  1. % Revenue (or Bookings) Invested in Sales and MarketingLeading Indicator
    • What is your overall return, and how efficient are your teams at generating revenue for each dollar spent? This can be broken down at each functional level, but each organization should have a high-level macro-view monitored every quarter.
  2. Pipeline Coverage RatioLeading Indicator
    • At the onset of the year, how many total opportunities are in your pipeline, and based on your historic win rates, is this enough to hit your annual target? World-class organizations break this down into weekly, monthly, and quarterly targets and update in real-time as the year progresses.  It is also a mistake to think that sales alone are in charge of the pipeline.  Breaking down targets across functional groups like Sales, Marketing, & Product can provide the visibility necessary to pinpoint coverage shortages.
  3. Sales Rep TurnoverLeading Indicator
    • Are you retaining your top talent, or do you have high performers leaving your organization? It’s critical to understand why reps are leaving (often this can be done in conjunction with your HR business partner).  How many are choosing to leave vs. being asked to leave?  Best in class companies stratify their reps into 3 categories: A, B, and C players.  You want to retain all of the A reps and create an environment that rewards them.  C players should be where your turnover is coming from, which ideally is controlled by you based on who is able to make the jump to B players.  Follow this link for ideas to stay competitive in your incentive plans to retain top performer talent.
  4. Selling TimeLeading Indicator
    • You want reps focused on high-value activities that are tied to selling – not spending their time on administrative or supporting tasks. Time studies provide the baseline time reps spend each week on different activities.  What can be offloaded to lower-cost sales support resources?  The opportunity cost you don’t have visibility to today could be the difference between 1-2 more deals per quarter for each rep.

       

Lagging Indicators

 

  1. Bookings Attributed to MarketingLagging indicator
    • What portion of your total bookings are coming from Marketing sourced opportunities or are being influenced by Marketing? We find many organizations break these 2 categories apart to understand how much is attributed to each motion.
  2. Annual Bookings per Rep (or per FTE)Lagging Indicator
    • How much should you expect per rep is largely dependent on your sales cycle, average deal size, product/service complexity, etc. World-class organizations monitor this metric across segments and geographies to understand where they have areas to dig into further.  You’ll often notice a correlation to your selling time and rep turnover KPIs when you begin tracking this consistently.
  3. Retention Rate (in $)Lagging Indicator
    • A common misconception is that this is just a software KPI, but understanding how much your existing base is continuing to buy each year applies to industries like oil & gas or office supplies as well. If you are not on a set renewal schedule, look at how many existing customers increased their spend year over year vs. decreased spend.
  4. Revenue MixLagging Indicator
    • Existing base renewal or upsell, Existing base expansion (cross-sell), and Acquisition (new customers) are the 3 main categories that you should be looking at for sources of revenue. This depends on your maturity level, but it is important to break down, so you understand where there is risk in your plan.  Are you mature and can get 80%-90% of your target from farming the base, or do you need to acquire 30% of your target from new logo customers?  Establish a historical baseline, use this to inform your strategic plan for hitting your target, and then monitor against actuals each quarter.
  5. Quota Attainment by RepLagging Indicator
    • Similar to productivity per rep, but this also accounts for how well your targets are set at the individual rep and territory level. Is everybody making their target, then perhaps you are setting them too low.  If everybody is missing their target, then you might be setting unrealistic goals.
  6. Win RateLagging Indicator
    • This sounds easy but can be made complicated when you start to break down by segment, product, region, and ultimately stage level. Start simple.  What is your win rate with new logo acquisitions?  What is your win rate for existing customers by each stage in your sales process?  Establish what the baseline is by looking at what % of these opportunities you win for each of these 2 categories.  This will help inform your pipeline coverage KPI we discussed earlier.

       

Recap:

 

    1. Setup a process to begin capturing KPIs and baseline data necessary to compare where you are today.
    2. Establish what KPIs you will track using the 10 we’ve outlined above as a starting point.
    3. Customize these to your business – what segments, product lines, regions, etc. require their own tracking.
    4. Use the information to course correct and identify risks to your annual plan and progress throughout the year.
    5. Take action – Take the Revenue Growth Maturity Model Diagnostic and utilize SBIs KPI Process Planner to get started.

       

Download the CX Strategy Workbook Here

 

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ABOUT THE AUTHOR

Garrett Ryan

Combines data-driven analysis with creative solutions ensuring clients make their number.

Prior to joining SBI, Garrett has served in a variety of finance, tax, and accounting leadership roles.  Using a data driven approach, he has developed tools to help organizations measure and grow their revenue.  Working with Marketing leaders, he has built models to help attribute revenue to key initiatives and track progress against previous norms.  Utilizes cutting edge tools to help visualize the success of product launches into new markets.  Areas of expertise include financial modeling, strategy development, concept implementation, risk mitigation, and creative problem solving.  Garrett’s experience allows him to translate complex information into bottom line, actionable insights.

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