Who is running the store? Who is in charge of reaching your goals? Management doesn’t necessarily mean doing the work. But it does mean keeping an eye on what’s happening, helping as needed, giving guidance and insights, and keeping people on task to get results. That means daily accountability, weekly accountability, monthly accountability, and annual accountability.
One mistake a lot of managers make is that they think they are looking at a key performance indicator (KPI) when in fact they’re looking at a target.
So, for instance, if I’m a manager of a sales team and the only thing I measure is whether a sale closes — if the only question I ask is “Did we get the deal done or didn’t we?”— then I am ignoring every other potential metric before that closed deal. That’s too bad because those earlier metrics can help my team affect their outcomes. You can’t really change the outcome by the time the end result is in your hand.
Always Be Measuring
Of course, some people like to talk a lot about improving a team’s closing skills, but the reality is that success in sales is much more likely to correlate with other activities that come long before the close. My point is that it’s not just like that in the world of sales. It’s like that just about everywhere.
A more effective manager won’t wait until the sales team is hurtling toward the end of the quarter to tell them they are not on track to reach their goals.
I like to tell managers something I learned from my friend Dan Burrus, author of Flash Foresight: Sometimes the problem isn’t the problem. Here’s what I mean by that. If I have water all over my floor and I wipe it up, I can talk myself into thinking I’m solving the problem, but in reality, the cracks in the wall that allow the water to leak in are the real problem. The key performance indicators have to be set at specific stages so that you really can evaluate what’s causing (or preventing) forward progress. This has a relationship to your team’s effort, to your tracking of that effort, and then to whether the effort is paying off.
On the Right Track
Of course, you may decide — for cash flow reasons, say — that it’s important to you to know how much business your salespeople close every day. You may choose to look at that figure closely, and you may even assess daily how much closed business has actually come through compared to how much you expected . . . but if you don’t like the number you see, then guess what? The problem is not the problem. You weren’t monitoring the right number. You were looking at the outcome, not at what made it possible. What you want is information about whether the process worked so you can intervene and adjust the course if you have to. That means you have to identify something else the team is doing to keep track of.
Finding the right KPI by which to manage your team is likely to be an ongoing challenge, even for an experienced manager. A lot depends on the individual goals of the team members who report to you, their level of career maturity, and the goals you and the team are responsible for reaching. It’s really a balancing act. If the KPI is too complicated, people won’t pay attention to it, but if it’s not detailed enough, you’re not going to get enough data to know whether your process is really working.
Here’s a list of some commonly used KPIs for teams with sales responsibility:
- Total number of prospecting calls made in a given period.
- Total number of initial appointments set in a given period.
- Amount of face time spent with prospects in a given period.
- Amount of face time spent with customers in a given period.
- Percentage of income from returning customers in a given period.
- Customer attrition rate in a given period. (Obviously, the lower it is, the more effective your sales and service process.)
Or take the example of someone’s website. You should manage that with the right metrics, too. The owner of the website may say, “Well, I really don’t know what my website is doing!” or “My website’s doing great!” But unless they actually look at the website analytics then they are making assumptions not based on real data.
Here are a few key metrics for measuring website performance:
- Unique visitors
- Repeat visitors
- Visitor value, which is sales divided by the number of people who visited your website in any given period.
- How many pages did they visit per session
- How long did they spend on your website
- Organic vs. Paid traffic
- Traffic sources
- The users journey from the entry page to the page they exit on
- Opt-ins, subscribers, leads, contacts form submissions, etc…
- Average sales
Measuring your success and defining what success looks like is the first step. Then, you want to put in the milestones and the benchmarks so that you can measure your success and make corrective course changes.
Here is a short video that expands on the topic on how to Improve the Customer Engagement.
As a creative agency CEO, we use lots of tools to help measure performance and our favorite one is Semrush. We use it and recommend it, and yes, this is an affiliate link.
The bottom line is, whatever you are trying to achieve needs to have a clear target, scheduled measurements in place, and use critical thinking to make adjustments to stay on track.