I recently discussed APIs, KPIs and KRIs within my business in a series that I’ve been calling, Behind the Curtain. Today’s entry will continue that series and focus on the KPIs within our sales department. To gain a greater insight into the sales KPIs within my businesses, I turned to my dear friend and colleague, Jeff Jeter. Jeff is one of our advisors and has earned his CFP®, ChFC®, and CEP® designations. In addition to being a great advisor, Jeff is our Director of Planning and has helped us solidify, strengthen, and condense our sales KPIs.
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Before joining our team, Jeff began his sales training as a pharmaceutical representative. What’s unique about a pharmaceutical rep’s sales process is that they never truly “close the deal.” Instead, they cultivate and foster an ongoing relationship with doctors. Essentially, they are relying on the doctors to make the sale for them as they write prescriptions. Jeff spent around 8-9 years in that industry, receiving several awards and recognitions for his outstanding work.
From there, he entered the world of industrial equipment. During this time, Jeff honed a new side of his sales technique. As the only sales director, he trained, instructed, and supervised a team of 15 to 20 sales representatives. Jeff’s job was to prepare the team to sell the equipment across the United States, Canada, and Mexico.
Jeff began his journey into financial services through the insurance industry. Once again, the sales training that he received prepared him to become the most qualified person on our team to discuss the various performance indicators, key performance indicators, and key result indicators that we track within our sales department. These indicators track the sales process more than the actual act of making a sale. So, how many metrics are we tracking with our sales KPIs?
At any given moment, Jeff is tracking between 25 and 30 different metrics to determine how our sales process is performing. However, the sales KPIs—the critical indicators to our business—all revolve around the sales funnel. I introduced this concept in my last entry, comparing it to a fishing net. The general idea is to get people to stop and listen to your message to attract future clients. At first, this is a wide-reaching effort, but as the prospective client moves closer to becoming a client, the message becomes more targeted, relatable, and personal.
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One of the present sales KPIs is something we call “hot prospects.” These are clients that have been pre-qualified and have experienced some of the “broad funnel” aspects, and are moving further down the funnel. Once we feel that the prospective client is at a higher than 50% close rate (meaning we have a better than 50% chance of making them a client), we classify them like a hot prospect. They stay in this classification until they say, “No,” or they become a member of the Heritage family.
Although all KPIs are important, Jeff says that the most important sales KPI we track is the “lead to client conversions.” This particular metric gives Jeff a kind of holistic overview of the entire sales process. It measures when a potential client enters the funnel as a lead until they reach the end of the funnel as a new client. You may recall that the marketing department follows a “lead to qualified marketing referral.” That is the point when the metric transfers from marketing to sales.
The next most important KPI that Jeff measures are the “Commitment to Engage” versus clients who actually sign. This metric shows us how many potential clients committed to the process after the initial consultation and, for whatever reason, failed to sign the letter of engagement. We track this and why it’s such an important sales KPI because it enables us to identify shortcomings in our process. On the other hand, we can learn just as much from the clients who commit to engaging and actually sign. This one KPI can be so valuable to informing us on what we need to improve and what we’re doing right.
Finally, with Heritage being such a unique business, we have a KPI that is specific to us. We like to call this one “Completeness of Client.” Basically, we have four distinct revenue streams. As such, our ideal client will utilize all four of these services, giving us a complete client. Within our office, we call this persona “Frazzled Frank/Fran.” This is a client that can use all of our services. They use our services for personal financial planning but also own a business that needs strategic planning. They own assets that require management. Likewise, because they’re a business owner, they need 401(k) or other employer-sponsored retirement plans. This KPI determines how many clients use our complete suite of services and how we can better reach others like them.
Ultimately, every sales department wants to maximize the efficiency of its funnel. Therefore, there are five sales KPIs that every sales department should track. These indicators will help you track the direct results of your funnel.
Oftentimes, business owners and sales directors can get too wrapped up in the results. When it comes to sales, you need to focus on the actions. The only way to identify which actions produce the results you want is to track your sales processes through PIs, KPIs, and KRIs. Not only does this help you to refine your sales process, but it can also help you to design sales and marketing training for your business.
Friends, life is hard, but life is good. Refining your sales processes to maximize efficiency can be frustrating. But it doesn’t need to be. By tracking the proper sales KPIs, you can make your sales department, at least financially simple. Let’s go out and make it a great day!
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