Having your business goals/destination in mind is the first step towards effective management. But you cannot manage what you don’t measure. Key Performance Indicators (KPIs) analytics are a vital resource for measurement, taking quantitative data analysis to the next level. KPIs represent the measurement of progress indicators, identified beforehand, toward organizational goals.

Frequent, routine review of KPIs gives you a glimpse of whether the processes are underperforming, need immediate attention, are on target, or exceeding your expectations. This information will help your leadership team make critical decisions that contribute to your company’s most important goals.

KPI analytics are typically available in mid-market CRMs, helping businesses stay on track to attack new customers, and attract new ones.

The most important categories of KPIs to watch are related to performance measurements, and can be broken down into three categories.

Past Measures

The information about your past business performance is vital in its right. By reviewing this information, you get a snapshot of the overall business health. For instance, when you have no closing sales today, it may imply that your product has not been performing well for months on end. If you fail to take action today, your business might as well reach a point of no return tomorrow.

Using KPIs, you can focus on your products past performance, profile your products and services’ strengths and weaknesses, reinforce on strengths, and improve on areas of weakness. They help you identify changes necessary for your business’ better performance, all while maintaining a competitive edge in your markets.

For example, sales may not be consistent. A good measurement will help you predict seasonal sales, and act accordingly. KPIs are important indicators in understanding your buyers’ behaviors over time, helping not only with stock or service issues, but also with marketing objectives in advance of high-sales seasons.

Knowing your seasonal sales also helps to reduce inventory costs. Instead of holding non-moving stock, you can always invest the capital elsewhere. Some underlying factors may drive down your sales in a particular season. For example, most companies close their stocks around the month of December. To clear their stock, they sell their products at considerably low prices.

KPIs helps you identify the particular seasons/periods the sales are low, and the possible reasons for such. If it is attributed to your key competitor clearing the stock and thus selling low, it helps you to make decisions about how to engage your markets and possibly improve your sales.

Current Measures

By using KPIs, you can evaluate your current position based on your sales or lack thereof, and determine a strategy to bring you closer to your goals. You not only get to know whether your sales are in line with your break-even mark, but you also get a glance of how much market share there is to capture.

Important business decisions are made using the sales figures. For instance, you get to determine whether you are in a position of meeting current supply and demand. If you are, do you have the necessary resources to deliver? What will adding orders and more work do to your quality of service? KPIs helps you answer questions like these.

Future Measures

KPIs, through pipeline analytics, provide a clear vision of all your business opportunities, regardless of their probability of closing. This is essential for the creation of effective sales tools, the organization of sales processes, and benchmarking of the sales team. Through KPIs, you can get within 5% forecast margin, implying that you are always aware of your current performance as well as the roadblocks and opportunities lying ahead.

Using a combination of these Key Performance Indicator categories within a CRM enables your leadership team to not only identify progress, but they also identify actions that are a priority in reference to outlining tasks for your team. KPIs are undoubtedly a vital part of CRM software, especially when businesses are measuring organizational performance.

What does the fourth quarter typically look like for a business? In most cases this quarter falls in-line with the holiday season. As a result, the majority of the focus remains in boosting sales and current revenues.

While this is an important time for any business’s bottom line, could this laser-focus toward sales serve as a mistake for leadership teams and executives? In many cases, management and executive teams set themselves up for failure at the end of the year by not effectively planning for what’s next.

Instead of simply focusing on the holiday rush, the final quarter should also serve as a time for leaders to step back and let their teams drive the business. While they’re a step back from the action, effective businesses are evaluating their year-to-date performance while planning for the future.

For example, McDonald’s recently deployed an all-day breakfast model to expand their fast food competition. While this is an important change that is creating quite a reaction, now is the time for corporate to evaluate the results of this change.

Additionally, Apple’s recent OS update to their Apple Watch has their perspective focused far beyond the flagship iPhone release. Their team is also currently assessing this performance to better understand how the road will proceed ahead for their business operations.

As these examples show, the importance of Q4 planning and analysis is critical. Here are five important components of that analysis that every team should follow. This list can ensure that any firm is better prepared for success in the next fiscal year.

1. Year-Over-Year Comparisons

Comparing current year data with previous years is one of the most important metrics a business can measure. This helps showcase performance, trends, growth and other critical areas of business operations.

Using reporting tools to compare key performance indicators can show how current sales and forecasts look within the market. Additionally, market reports cross-referenced with this data can help to better forecast what to expect for the next quarter within business.

In most cases this type of data measurement is easily accomplished through an integrative CRM platform. This type of data can be reviewed as a general overview – or more specifically within quarters, months and even the year-to-date. Both positive and negative trends can be better identify when compared within this context. Additional planning can be undertaken to help prevent ongoing negative trends – or to better address positive growth potential.

2. Cost Evaluation

Cost evaluation is one of the most challenging areas of any business analysis. After all, it’s the costs across a business operation that inevitably leech into revenue when left unmanaged. Subscriptions, term agreements, unchecked contracts and other factors can quickly add up to excessive costs against a company’s bottom line.

By remaining proactive in the analytics, businesses can better identify these costs. And they can devise solutions to reduce or even eliminate expenses that may be unnecessary.

One of the most common areas where costs can be reevaluated occurs within company health insurance. With the marketplace becoming increasingly competitive, more and more insurance packages are becoming available for businesses. In many cases, alternative plans with similar features and lower costs may be available for a switch.

Additionally, contract renegotiations may help to reduce spending. It’s important to remember that these companies are competing for business. Hence, a management team’s job is to leverage contract offers against one another to find the most competitive rates possible.

ISPs and other telecom service contracts are a prime example where costs can likely be lowered. By reviewing current plans, needs and available options, many businesses can reduce these costs by a significant margin. Even essentials such as rent or janitorial services can be reassessed to find cost-saving measures.

3. Product & Service Evaluation

Right alongside overall costs, planning for the future must also encompass an explicit evaluation of products and services. The goal of this phase is threefold:

• Make improvements.
• Make changes.
• Make cuts.

A company must stick with its mission and plan while holding true to the strengths that have contributed to success. If cuts are necessary, ensure that they are made with company strengths in mind.

While seeking out new opportunities is always great, it’s important that a company not spread itself too thin during the process. This stage can allow for planning – and exploring potential market opportunities. By planning ahead for analysis, a business can better set itself up for success. And they can readjust their business focus to remain more aligned toward their goals in the next year ahead.

Remember, making necessary cuts and spending adjustments does not show that a company is having financial trouble. Instead, it shows that they’re preparing for even more success in the future.

4. Employee Evaluations

The best employees to any organization are an investment to the company’s success. Accordingly, it’s important to measure each employee’s ROI and their direct contributions to a company’s potential future.

While layoffs and terminations are never an easy step, the truth is that performance is important within an organization. Without the right team in place, a business will never reach its greatest potential.

In many cases, employee evaluation comes down to assessing current workforce as well as investing in future growth. This could also include investing in fresh talent within new business areas to facilitate this type of growth.

5. Budgeting

Now that the planning has encompassed the major areas of operations, a realistic budget can be developed for the next year.

Utilizing a CRM or ERP software suite should come as no surprise within any organization’s operations. This software simplifies all the above-mentioned steps by compiling data and developing customizable, intuitive reports. This information can be used to quickly develop budgets that address all areas of a business – and plan with future market trends in mind.

Getting Ahead of the Curve

While this list contains many of the important steps a business should take in Quarter 4, it certainly is not exhaustive. There are all sorts of additional options that should be looked at for success. However, these five represent all the essentials any business management or executive team should address.

No matter a business’s size or scope, utilizing a CRM platform can enable even better analytics for improved fiscal performance into the future. These software packages help to compile data into intuitive reporting. That way, management can better forecast the business climate – and the best path forward.

As a CRM Vendor I often find myself not only selling software but offline solutions as well; mainly consultative services that help a business establish best practices in front of the keyboard and in front of the customer. It’s part of the value we have to offer in order to really help our customers improve their operations. After all, software alone isn’t the single solution that will save the day.

A natural part of providing solutions to your customer is discovering their philosophies and current processes. We do this so we can tailor a solution that complements and improves upon the workflow their already familiar with. Over the years we’ve had a chance to speak with thousands of people from a variety of industries to learn about sales needs and ultimately their sales process and find out what’s important to them in a CRM. While almost 95% of them had common needs in a CRM solution, like improved collaboration, calendar sharing, ease of use, mobility, tracking leads and opportunities, etc. we found the way CRM users are managing their sales teams and the metrics they were recording could be broken down into two categories; those who focus on their sales reps’ daily activities and those who focus on their accomplishments (usually on a monthly basis). In other words, micro sales management and macro sales management.

Why do we hire sales reps? Simple. To grow revenue. Growing your customer base and increase sales is the end result you’re looking for. Period. It doesn’t matter how they achieve that result either, by the way, as long as the results meet or surpass your expectations (and legal of course).

When you employ a sales rep, you hire them for a service; “Selling” and compensate them for a result; “Sales”. Lose sight of this and will cost you lost revenue, be an expensive mistake and could even bankrupt your business if not dealt with.

Sales can take time, and how much time all depends on your industry and where your prospects (or customers) are in their buying process. There are a variety of reasons (in fact too many to count) that can impact a company’s sales cycle. Far too often micro sales managers invest their time reviewing the wrong matrix. They get too lost in looking at their sales rep’s daily activity log an equating of the volume of activity with successful efforts. There’s a false feeling of comfort that can come from viewing activity analytics, like the number of calls made or emails sent during a given day. I’ve seen plenty of organizations in a variety of industries with sales reps who had greater sales results with fewer calls over a monthly period than their peers, mainly because they knew where and how to invest their time.  It’s true that sales is a numbers game and the more touch points you have, the more chances you have of closing a deal, but there is also a multitude of factors that are required to support that activity like experience, technique, personality, demand, price and so on. Setting expectations on HOW your sales rep sells boxes them into your process and not theirs. Sales is a talent, much like art. If a person had artistic abilities wouldn’t you let them work using their unique skills that make them successful rather than stand over their shoulder and instruct them on how to paint?

Keeping with the art analogy, you judge a painting on the end result, what the picture looks like when it’s completed, not how many brush strokes or colors it took to make it.

Volume of calls doesn’t necessarily mean quality calls.

On paper, Frank makes an average of 50 calls per day while Kelly only makes 10. A report like this offers a single dimension perspective and basically indicates that Frank makes more calls than Kelly and is probably a better sales rep. In reality, all of Frank’s calls may last an average of 2 minutes, while Kelly’s 10 calls could average 15 minutes. In this case, because Kelly is spending longer with her prospects on the phone, she’s actually advancing them further into the sales process by qualifying her prospects, determining their needs, identifying key decision makers, buying motives and so on. When you look at it from this perspective and understand the details, it becomes a little clearer that sometimes less can be more. But even in this example, the details in the duration of the calls are irrelevant from a sales management perspective because Frank and Kelly need to be measured on their results, not the details of their conversations. Face it, sometimes those details could be exaggerated and thus makes the details irrelevant to measuring their success. They need to be measured on one single criteria; the revenue they generate for your business. The number of closed deals, actual sales that they make in a given time period. Successful sales managers focus on the big picture; the results of their sales reps.

The Devil is in the details.

The details are still important, but usually best observed in postmortem to help you identify why someone is either more successful or less successful in their sales activity. They should be used to uncover relevant symptoms that can lead to an accurate diagnosis. Remember, there is a multitude of reasons why one sales rep can outperform others in your organization; experience, specialty, territory, technique, approach, product knowledge, geography, lead sources, number of existing customer relationships, just to name a few. Understanding the details by analyzing your business intelligence through reports and KPIs will give you a broader perspective of why and where you are seeing success and help you standardize these elements throughout your organization where and when possible. For some, finding the formula that works best could take years. This is particularly common in startups.

Measure your reps monthly, but keep on top of their weekly progress. Familiarize yourself with the activity they have in their pipeline and work towards closing those deals as well as growing your sales funnel. Give your sales team the flexibility they need to deliver the results you expect and make sure they have the support they need to succeed. Don’t get lost in reporting micro details that are insignificant values, stay on track with the big picture and keep your eye on the ball; making sure your monthly, quarterly and annual revenue goals are being met. Set your expectation on revenue, not activities. If you expect call quotas to be met, you’ll achieve call quotas. If you expect revenue goals to be met, you’ll achieve your revenue goals.

Shorten your “selling stages” and simplify your sales workflow.

Many of the leading CRMS will provide you with a wealth of business intelligence to help stay on top of your sales pipeline and give you a deeper perspective into the activities conducted by your sales team. In fact, in some cases it could be too much insight or overkill, having you decipher so much business intelligence your overlooking the basics or the obvious. When you look too closely at the wallpaper you can’t see the pattern.

Don’t get me wrong; the more analytics you can draw from your business, the better decisions you’ll be able to make, assuming your versed in understanding what to look for and your interest in your data is routine so you can record patterns, irregularities, trends and so on. Consistent monitoring of KPIs and reports are instrumental in understanding your data.

Two key criteria that are at the heart of every sales process are the Selling Stage and the Buying Stage, or to be more specific; where the customer is in your selling process and when you are in their buying process. Each company has their own Selling Stages and Buying Stages that are based on a number of factors, such as sales cycle, products and services, manufacturing and distribution lead times and so on. But despite your business and selling process, regardless of how you label these stages in your CRM one thing is consistent- All Selling Stages have a start and end point and all Buying Stages will prioritize which prospects deserve immediate attention.

Selling Stages

As a sales rep, from your first conversation with a lead, it’s your challenge and responsibly to qualify the prospect’s interest and overall needs and them guide them through toward a closed deal. Defining selling stages adds structure to your sales process and creates a common funnel that you can try and steer each prospect through. The better control you have over your selling stages, the more likely you are to close the deal. In fact, as many successful sales reps will share, you should have complete control over your selling process, you need to command the relationship, and always plan the next move for you and the prospect. Using Selling Stages will help you stay the course every time and develop a habitual track that is sure to increase your close ratio, by becoming more organized within your own sales process.

Define your selling stages

Selling stages have activities that include a beginning, middle and an end. When establishing your selling stages, it’s in your best interest to have as few as possible. More stages and more options will confuse and prolong your says process and as they say, “time kills all deals”. It’s also best to share your sells process with your prospect, so they have an idea of what to expect up front. This is another way you will take control of the sale.

1. Qualify.

Not every prospect is an ideal fit. The more you understand about your prospect’s needs, the better you have a chance of closing the business. If you’re not a right match, then it’s in your best interest to avoid the aggravation of dealing with an unhappy customer. The quick question (and hopefully obvious one) is, do you solve the prospects problem? If yes, move to the next round.

2. Presentation

Once you determine you’re a good fit, prove it. Show your prospect you understand their pain points and demonstrate how your product or service can add value by solving their problems and producing added benefits.

3. Draft Proposal

Sometimes pricing is straight forward, but sometimes options need to be considered, especially in consultative selling.  Produce draft pricing, estimates and options and then review them clearly with your prospect. This will give you the opportunity to achieve to very important activities in your selling process. 1) When presenting options you’ll better set expectations, and 2) You’re letting your customer determine their price point and solution, they feel in control in the pricing process, because you are giving them a choice in their purchasing. Just make sure you continue to command the selling process.

4. Final Proposal

Based on the results and decisions finalized in the draft pricing process you now present the prospect with the arrangement they chose and they’re ready to seal the deal with you.

5. Close

Your final selling stage ends with the prospects commitment to buy. They sign the deal and the sales order is initiated.

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