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KPIs: Science or Bullshit?

This is a long post. If you care to read it, awesome, but if you don't, here's a summary: Stop complaining about your KPIs unless you are willing to prove to management that your method is netting higher revenue than their prescribed plan. Here's how:


We've all said it: "These KPIs are bullshit. Why do I need to make X calls, send Y emails, and interact with Z social posts?"


At face value, these are solid questions...but have you actually asked your management team why they exist?


You'll likely hear two reasons:


  • (Common) A puzzled look on their face, followed by "why don't you get back to dialing!?"
  • (Radical) The numbers are based on funnel activity that has been proven to drive opportunities and closed deals in the past by our top reps.


If you heard the second answer, would you be more likely to hit the numbers put in front of you for daily tasks? If not, would it change your mind if your manager/director/VP could walk you through the funnel math that proves out the KPIs as a scientific approach to pipeline-driving activity?


In my experience, you are more likely to get the first answer from your management team. They likely pulled the numbers they put in front of you from a blog or another peer/colleague in the industry. The problem is, those numbers worked for the company that published the blog or for the team their buddy manages...but who's to say that'll work for your team? In this instance, the KPIs are complete bullshit. However, you might be able to change things for the better!


I would challenge you to look at your June activity KPIs at the end of the month and compare it to the rest of the H1 2021. Is your call/email/meeting average higher or lower as compared to the previous 5 months? What about your closed business? Is it higher or lower as compared to the previous 6 months? If higher, take note of that and try to repeat it in July. If you can replicate the same outcomes from identical inputs then you might have a trend on your hands. Give it one more month and see if Q3 produces greater results than all of H1...and then go compare that to your peers. If your numbers perform better as compared to other reps in your org then you should take that data and prove out the math that your approach to activity is a scientifically-backed method to producing revenue for the company. Work with them to document it, and then replicate it across the sales org.


This is how you become an agent for change in a corporate environment. Managers hate complainers and excuses, but they love money...show them how to make more of it and you just might make your life, and that of your peers, much easier and more fulfilling.

πŸ‘‘ Sales Strategy
πŸ“Š Metrics
πŸ’†β€β™‚ Mindset
13
WCK
Notorious Answer
+13
Padre de Tequila, General of the Coors Knights
Another thing I want to note is that, for some companies(like mine), KPI's are a sliding scale of sorts. If you don't have pitches on the board, your output should be higher and you should be extending convos regardless in their eyes. I get it.

In the end, unless you're closing deals, KPI's are in place to stay. Revenue will always hide all sins, but until you get to that point, the KPI's are a way to track the effort put in at the end of the day.
goose
Politicker
+12
Sales Executive
Goodhart's Law: when a measure becomes a target, itΒ ceases to be aΒ good measure. In other words, if you pick a measure to assess people's performance, then we find a way to game it.
poweredbycaffeine
WR Lieutenant
+10
Bean Juice Drinker | Sales Savant
Gaming won't go away, but flexibility and adaptation on the part of management to regularly assess and adjust targets/measures are imperative to building a long-term strategy that will net growth and tame disgruntlement.
GDO
Politicker
+7
BDM
What gets measured get done. On the other hand, Management should be able to explain why they set these numbers.Β 
poweredbycaffeine
WR Lieutenant
+10
Bean Juice Drinker | Sales Savant
Do they get done? Or are they gamed and satisfied? When it’s the latter, reps are wondering why they are β€œhitting” their activity numbers, but not hitting their quotas.
GDO
Politicker
+7
BDM
If there are incentives they get gamed. That’s why it’s difficult to set KPI’s.
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paddy
WR Officer
+11
Account Executive
Unpopular opinion here and something no manager will want to hear is that goals (or KPI's in this case), are a losing strategy. Systems work much better. I'd encourage you to take a look at this and let me know what you think:

https://www.scottadamssays.com/2013/11/18/goals-vs-systems/

Having a system in place to prospect daily is more useful than having to track and make sure you have achieved XYZ phone calls/emails.
poweredbycaffeine
WR Lieutenant
+10
Bean Juice Drinker | Sales Savant
This post was actually inspired by a long chat I had with my Dad yesterday about systems. He's a 35-year-long-career government employee and was responsible for tearing old systems apart to build new ones that adjusted for the modern age. We dove into how sales prospecting is a system that is designed to turn specific inputs (prospecting) into desired outcomes (closed deals). While you have to focus on the outcomes, which all great systems do, you also have to mind the volume in inputs that keep the system running.

If you have too much variability in the inputs of the sales prospecting system then you are perpetuating drastically varied outcomes. Like a furnace for example: if you put in 5 logs in the morning to get things started, but only 1 log in that afternoon, you're doomed to be out by evening and you'll have to compensate with 10 logs to stay warm all night. You can't go from 50/day in January to 10 calls/day in February and expect similar results because you don' have enough input volume to produce similar results (effort and research being equal). The inputs have to stay constant to drive consistent outcomes.
MrNiche
Valued Contributor
+5
Senior Account Executive
I think early in role it's a numbers game. Need to push a ton of volume to hear about competitors, common painpoints, and real use case for what you're selling. I think top dog/senior reps should be held to other KPIs. Like a new rep has zero pipeline to actively work whereas a senior rep has a ton of pipeline & shouldn't spend their whole day cold calling. It takes a senior rep half as many calls to book a meeting.
poweredbycaffeine
WR Lieutenant
+10
Bean Juice Drinker | Sales Savant
I would be curious if we asked 100 SaaS reps with 10 years of experience if they make consistent outbound efforts (i.e. consistent numbers each day/week/month) or if they take a varied approach based on their pipeline. The results would drive the rest of this conversation.Β 
MrNiche
Valued Contributor
+5
Senior Account Executive
Agreed. I feel like most reps who have made a lifelong career in sales will never talk about making cold calls, they make their money off of customer upsells since they have sold to so many (depends on the industry, obviously).Β 

I'd argue it also depends on your manager. I've had managers who don't give a shit what you do if you've hit your number & I've had managers who ask my why I've only made 30 calls that day when I'm at 150% to quota.

There's no doubt making cold calls is always going to be an effective way to prospect, but I usually adhere to the whole "bird in the hand is worth two in the bush" and invest more time exploring all avenues for my existing opps before going into the bush to hunt for more.
Justatitle
Politicker
+11
Mid Market AE
For the most part, they're BS and a way for management to say look we're covering our teamΒ 
poweredbycaffeine
WR Lieutenant
+10
Bean Juice Drinker | Sales Savant
Why?
Justatitle
Politicker
+11
Mid Market AE
Because it's tough to measure salespeople aside from their number and quota attainment so if management is bad at this or they're not sure how the sales team is doing they make up some KPIs so that they can say look this is what matters and here is how the sales team is performing. SO made up numbers is whyΒ 
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