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Goals (OKRs & KPIs)
June 29, 2023

Leveraging Sales KPIs and OKRs for optimal performance

Zahra Currimbhoy
Zahra Currimbhoy
Marketing, Perdoo
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Leveraging Sales KPIs and OKRs for optimal performance

When it comes to optimizing Sales performance, the biggest challenge often lies in accurately measuring progress and ensuring alignment with overall business goals. How do you ensure that your Sales team's daily activities contribute to your strategy? How do you accurately measure their performance? This is where Key Performance Indicators (KPIs) and Objectives and Key Results (OKRs) come into play.

This article delves into how these two goal management frameworks can be used in tandem to drive optimal Sales performance, addressing questions around their utility, implementation, and potential challenges.

The Symbiosis of KPIs and OKRs in Sales Performance Management

KPIs serve as quantifiable measures that allow Sales managers to assess the effectiveness and productivity of their teams. KPIs are often referred to as “health metrics” as they help monitor and measure the activities metrics a Sales team deems most important on an ongoing basis — that’s their business as usual.

Metrics and KPIs are often used interchangeably. A KPI, however, is more than a metric — it always includes a metric to define what’s being measured, but it also includes a target value to establish what success means to them, and a current value to depict whether it’s succeeding or not. Common Sales KPIs might include metrics like the number of leads generated, conversion rate, average deal size, Sales cycle length, monthly recurring revenue, and quota attainment rate, to name a few. The current and target values of these would be specific to the team.

While KPIs provide a snapshot of ongoing performance, OKRs, on the other hand, provide a roadmap for future improvement. OKRs are more temporary in nature, helping you break out of the status quo, often into unknown territory. OKRs could help Sales teams build something from scratch, improve or rethink a process, or even nurture an unhealthy KPI back to health. The Objective tells you where to go, Key Results are the measurable results you need to achieve your Objective. And Initiatives are all the projects and tasks you’ll need to work on to achieve your Key Results.

Here are some example Sales OKRs:

O: No one can refuse our product offer

KR: Increase average deal size to $X

KR: Have a X% close rate

O: Turn the partner network into a revenue stream

KR: Generate $Xk in partner revenue

KR: X new customers from partner referrals

O: Improve the client demo experience

KR: Increase demo satisfaction score from X to Y

The inherent beauty of the OKR approach lies in its ability to link these activities to the company’s strategy.

The Complementary Dance: Using KPIs to Inform OKRs

KPIs and OKRs, though serving distinct purposes, should not be seen as isolated tools. Instead, they can work together synergistically to drive Sales performance.

Regular monitoring of KPIs can provide valuable insights that can inform the setting of OKRs. For instance, if the Sales cycle length (a KPI) is consistently longer than industry benchmarks, an OKR could be set to reduce it.

Implementation challenges and overcoming them

The successful integration of KPIs and OKRs into your Sales strategy, while promising significant benefits, doesn’t come without challenges. It requires a clear understanding of your Sales process, realistic goal-setting, and above all, a culture that values transparency, accountability, and continuous improvement.

Sales teams should be involved in setting their KPIs and OKRs to ensure they are realistic, meaningful, and have the buy-in of those expected to achieve them. Regular review meetings should be held to track progress, celebrate achievements, and address any hurdles that might arise.

In conclusion: An effective approach to Sales Performance Management

KPIs and OKRs, when used effectively, offer a powerful framework to drive Sales performance. KPIs measure the success, output, quantity, or quality of an ongoing process or activity, also known as your business as usual — the processes or activities already in place. OKRs provide the missing link between ambition and reality — they help you break out of the status quo and take you into new, often unknown territory.

The key to mastering this symbiotic relationship lies in understanding the unique value each brings, using KPIs to inform the setting of OKRs, and cultivating a supportive culture that values transparency, collaboration, and continuous improvement. It's not just about hitting Sales targets; it's about aligning everyday Sales activities with the strategic direction of the business.

[helpie_faq group_id='2265'/]

FAQ

Sales KPIs are quantifiable measures used to track and assess the ongoing performance of a Sales team. A KPI is comprised of a metric to define what’s being measured, a target value to establish what success means to them for that specific metric, and a current value to depict whether the KPI is headed in the right direction. Common Sales KPIs include revenue, lead conversion rate, Sales growth, and average deal size.

Sales OKRs consist of an Objective, which is a clearly defined outcome that guides them where to go, and Key Results, are the measurable results set to gauge if the Sales team is meeting the Objective or not. Initiatives are all the projects and tasks the team will work on to move the needle on the Key Results. For example, an Objective could be to increase Sales revenue, with Key Results specifying the percentage increase targeted. Initiatives may involve hiring more Sales reps or improving Sales pitch.

OKRs help define the key temporary advancements a Sales team might want to make within a given period of time to push their team and organization forward. KPIs, on the other hand, help define and measure the ongoing health of the team and its processes.

Sales KPIs and OKRs can work in tandem to drive optimal Sales performance. While KPIs measure your business-as-usual (eg, closing deals), OKRs help to set targets for improvements. By monitoring KPIs, you can identify areas of weakness or opportunity that can then be addressed with OKRs.

Ideally, Sales KPIs should be reviewed regularly, such as weekly or monthly, to keep a pulse on current performance. OKRs, on the other hand, are usually set and reviewed on a quarterly basis, however, should be updated regularly (weekly or monthly) to track learnings and make adaptations to ensure the goal is met.

Yes, the same metric can be used in both a KPI and an OKR. For example, ‘Sales revenue’ could be a KPI that is tracked weekly, and also could be a part of an OKR, ie. a Key Result aiming to increase revenue by a certain percentage over a quarter.

Sales KPIs and OKRs foster a culture of accountability and focus, which can motivate Sales teams to perform better. They provide clear, measurable targets, enable early identification of issues, and help align team efforts with company goals.

Sales teams should be involved in setting their KPIs and OKRs to ensure they are realistic, meaningful, and have the buy-in of those expected to achieve them. Regular review meetings should be held to track progress, celebrate achievements, and address any hurdles that might arise.

It’s not about quantity but rather about relevance and manageability. For an average Sales team, having 3-6 KPIs and 1-4 OKRs for the team as a whole is recommended to ensure focus and prevent overwhelm.

A common mistake is setting too many KPIs or OKRs, which can dilute focus and create confusion. Also, it’s important to avoid setting OKRs that are too ambitious or not achievable, as this can be demotivating for the sales team.

Sales KPIs are quantifiable measures used to track and assess the ongoing performance of a Sales team. A KPI is comprised of a metric to define what’s being measured, a target value to establish what success means to them for that specific metric, and a current value to depict whether the KPI is headed in the right direction. Common Sales KPIs include revenue, lead conversion rate, Sales growth, and average deal size.

Sales OKRs consist of an Objective, which is a clearly defined outcome that guides them where to go, and Key Results, are the measurable results set to gauge if the Sales team is meeting the Objective or not. Initiatives are all the projects and tasks the team will work on to move the needle on the Key Results. For example, an Objective could be to increase Sales revenue, with Key Results specifying the percentage increase targeted. Initiatives may involve hiring more Sales reps or improving Sales pitch.

OKRs help define the key temporary advancements a Sales team might want to make within a given period of time to push their team and organization forward. KPIs, on the other hand, help define and measure the ongoing health of the team and its processes.

Sales KPIs and OKRs can work in tandem to drive optimal Sales performance. While KPIs measure your business-as-usual (eg, closing deals), OKRs help to set targets for improvements. By monitoring KPIs, you can identify areas of weakness or opportunity that can then be addressed with OKRs.

Ideally, Sales KPIs should be reviewed regularly, such as weekly or monthly, to keep a pulse on current performance. OKRs, on the other hand, are usually set and reviewed on a quarterly basis, however, should be updated regularly (weekly or monthly) to track learnings and make adaptations to ensure the goal is met.

Yes, the same metric can be used in both a KPI and an OKR. For example, ‘Sales revenue’ could be a KPI that is tracked weekly, and also could be a part of an OKR, ie. a Key Result aiming to increase revenue by a certain percentage over a quarter.

Sales KPIs and OKRs foster a culture of accountability and focus, which can motivate Sales teams to perform better. They provide clear, measurable targets, enable early identification of issues, and help align team efforts with company goals.

Sales teams should be involved in setting their KPIs and OKRs to ensure they are realistic, meaningful, and have the buy-in of those expected to achieve them. Regular review meetings should be held to track progress, celebrate achievements, and address any hurdles that might arise.

It’s not about quantity but rather about relevance and manageability. For an average Sales team, having 3-6 KPIs and 1-4 OKRs for the team as a whole is recommended to ensure focus and prevent overwhelm.

A common mistake is setting too many KPIs or OKRs, which can dilute focus and create confusion. Also, it’s important to avoid setting OKRs that are too ambitious or not achievable, as this can be demotivating for the sales team.

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