Becoming a Sales Leader: Mastering Pipeline KPIs and leading your team to Success

You have likely heard about or experienced a top-performing sales rep who excelled as an individual contributor, but who failed as a sales leader.  To avoid that fate, one of the several skills you need to learn as a sales leader is mastery of sales pipeline KPIs and how to use them to lead your team.   In this article, we provide an overview and discuss how SugarCRM can help.

Challenges that Sales Managers face

It is hard to balance the need to drive sales results while simultaneously fostering a positive work environment that encourages growth and development. This delicate balancing act requires a precise mix of leadership skills, emotional intelligence, clear communication, and strategic thinking.

Sales managers also face the complexity of managing a diverse group of individuals, each with their unique strengths, weaknesses, and motivations. Sales managers must find ways to inspire, motivate and engage their team members while also holding them accountable for their performance. This can be particularly challenging when dealing with underperforming team members, who may require additional coaching and support to reach their full potential.

Moreover, sales managers must also navigate the ever-changing business landscape, adapting their strategies and tactics to keep pace with evolving customer needs, market conditions, and competitive pressures. This requires a high degree of adaptability and a willingness to embrace change, even when it may be uncomfortable or disruptive.

The Importance of Metrics and KPIs in Sales Management

KPIs can help cut through these challenges by clearly setting expectations and removing ambiguity.  By regularly reviewing KPI results with your team you create an environment for managing with transparency and accountability.

KPIs serve as the foundation for informed decision-making, allowing sales managers to identify trends over time, uncover hidden opportunities, and pinpoint areas for process improvement. By tracking and analyzing key performance indicators, sales managers can gain a deeper understanding of their team's performance and make more informed decisions about where to focus available time and resources.

Metrics and KPIs also play a crucial role in fostering a culture of accountability within a sales team. When targets have been fairly set and team members know that their performance is being consistently measured against those mutually agreed targets, they are more likely to take pride in ownership of their results and work to meet or exceed their goals. This helps create a more engaged and motivated sales force, driving better and more consistent results for the organization.

Furthermore, by leveraging data-driven insights, sales managers can more effectively coach and develop their team members, providing targeted feedback and support before performance becomes a problem. This can help the sales manager to create a more supportive and nurturing environment, where team members feel empowered to learn, grow, and succeed.

In short, metrics and KPIs are the lifeblood of successful sales team management, providing the necessary tools and insights to drive continuous improvement and exceptional performance.

Getting Started: Encouraging a Data-Driven Sales Culture

We have established that a data-driven sales culture is an essential ingredient for a successful sales manager.  There are several key steps that sales managers can take to promote a data-driven culture within their organization.

First and foremost, sales managers must lead by example, demonstrating their commitment to the use of metrics and KPIs within the team. This may involve regularly sharing the KPIs with team members, referring to the KPIs in the normal course of business, and celebrating successes and improvements reflected in those KPIs.

Second, sales managers should invest in the necessary tools and technology to enable their team members to access, analyze, and interpret data with ease. This may involve implementing a robust CRM system such as Sugar which provides powerful data collection and visualization capabilities and providing training and support to help team members build their analytical skills.

Finally, sales managers should work to create a culture of continuous improvement, where team members are encouraged to constantly seek new ways to enhance their performance based on the shared KPIs. This may involve including the review of KPIs in regular sales team meetings, providing ongoing feedback and coaching, and promoting a growth mindset within the team. By fostering a data-driven culture, sales managers can unlock the full potential of their team, their own careers, and drive exceptional results.

Sales KPIs for Effective Sales Team Management

KPIs will vary somewhat from one organization to the next, from one industry to the next, and from one sales manager to the next.   The KPIs need to fit the culture and goals of the organization, the team, and the sales manager.

SugarCRM provides a broad selection of pipeline KPIs right out of the box.  Our customers select the ones most appropriate to their needs and adjust for an exact fit.  

Here are some key KPIs we believe are important and that we provide to our customers:

  1. Forecast versus Quota: This is the bedrock KPI for all sales managers.  We provide a day-by-day KPI to show your quota target and how your team forecast and won business is progressing towards it.
  2. Forecast: Current vs Prior Quarters: On any day of a sales period, look back at the same day in prior periods to review what your forecast looked like at that time, what pipeline you started with, and how you ended up.   When your Chief Revenue Officer calls to ask you how you will close two-thirds of your quota in the last third of the sales period, you will be prepared to answer confidently.
  3. Pipeline: Current and Next Quarter: Review if you have enough pipeline remaining to cover your sales targets.  For instance, if your blended win rate is 25%, then you would like to see a 4X pipeline available compared to your remaining target.
  4. Pipeline Creation Trend: A powerful leading indicator that tells you if your marketing and sales teams are sourcing enough new opportunities to feed your pipeline.  You want to be in the lookout for falling pipeline creation trends because your sales targets will be in trouble a couple of sales periods out.
  5. Funnel Velocity and Conversion: This measures your team’s ability to move opportunities forward through the sales stages.  Measure both stage conversion percentages and days in stage to help spot bottlenecks in your sales process where you need to pay some attention. Your goal is to increase conversion percentages and reduce days in stage.
  6. Funnel Flow Analysis: Opportunities do not always flow in a nice linear manner, and they do not always exit from the same stage.  This KPI will tell you where your sales team takes shortcuts and how far you get in the sales cycle before you lose.  Ideally, you want to flow through each step in the sales cycle, and if you are going to lose you want to lose early.
  7. Average Deal Size Trend: This KPI shows you the size of your average pipeline opportunity over time.  For a growing organization, it is often a goal to also see the average deal size increase over time.
  8. Win Rate Trend: Understanding your win rate is crucial in order to become a predictable sales organization and sales leader.  It sets you up to collaborate with marketing about lead generation and it helps you set team targets for sales prospecting that will create a pipeline that can support your sales targets.  This report shows you how your win rate is moving over historical sales periods.
  9. Sales Cycle Trend: A measurement of the average number of days an opportunity spends in the sales cycle before it is Won, Lost, or closed as Undecided.  In general, you want this KPI to go down.
  10. Sales Velocity by Sales Stage: This KPI shows you how your team members are trending over time in terms of days spent in each sales cycle.  It is a very useful KPI for coaching team members on how to improve their respective weaknesses.   Your team will have different strengths and weaknesses and this report will help you work with each salesperson to improve skills such as qualification, quoting, negotiating, or closing the deal!
  11. Idle Opportunities Trend: This KPI shows opportunities stuck in a stage for a defined idle time.  It gives you as a sales leader the opportunity to parachute in and help ‘un-stick’ them.  Sometimes salespeople get into situations where they may hesitate to ask for help and would rather ignore the opportunity.  As a sales leader you need to understand why, and you cannot afford to waste any opportunity.

By closely tracking these essential sales KPIs, sales managers can gain a better understanding of their team's performance and make more informed decisions about how to drive growth and success.

Setting Realistic and Achievable Sales Targets

To be an effective sales leader you must both set achievable and stretch goals for your team. When setting sales targets, sales managers should consider the following factors:

  1. Organization Goals: Your team goals need to align and roll up into the goals of the organization.   Understand the organizational goal and the expected contributions from your team.
  2. Historical Performance:  History tends to repeat itself.  Given the same set of variables do not expect different results unless you are prepared to be an agent of change.
  3. Market Conditions: Sales managers should consider the state of the market, including factors such as competition, economic conditions, and customer demand when setting sales targets.
  4. Team Resources:  Has the size or composition of your team changed; do you have the budget you need?  Are technology and other teams available to you?  The answers to these questions change and you need to consider them.
  5. Individual Goals:  Base goals should be achievable by 75% of your sales team and stretch goals should be achievable by your top 25% performers.  Set these goals individually for each team member based on their experience and responsibilities.  

By setting realistic and achievable sales targets, sales managers can create a clear roadmap for success and motivate their team members to reach their full potential.

Utilizing CRM Systems for Sales Metrics Tracking

Customer relationship management (CRM) systems (I’ll use Sugar as an example…) provide a centralized platform for tracking and analyzing sales metrics and KPIs.

Key benefits we provide include:

  1. Centralized and Flexible Data Collection: Sugar allows you to create a workspace for your sales team to store their account and opportunity information but also easily combine it with sales data from accounting and ERP systems for ease of measurement.
  2. Automated and Real-Time Insights: Sugar will continuously and automatically calculate your KPIs so that they are available in near real-time and eliminates the need to manually update spreadsheets and such.  This can save dozens of labor hours per week and be the difference between being able to consistently utilize KPIs or not.
  3. Streamline Sales Processes: By having KPIs in the same system as where you run your sales processes, it becomes easier to continually improve those processes.  Continuous process improvement is the sign of a great sales leader!

 By utilizing CRM systems for sales metrics tracking, sales managers can more effectively manage their team's performance and drive outstanding results.

Using CRM and KPIs to coach your sales team

By leveraging KPIs to provide targeted feedback and support to team members, sales managers can help to drive continuous improvement and foster a culture of learning and growth.

 There are key steps that sales managers should take to use KPIs effectively as a coaching tool:

  1. Set Clear Expectations: Create a KPI dictionary to share with your team and other departments in your organization.   Make sure that your team understands how a KPI is calculated and what they need to do to influence it.
  2. Provide Regular and Consistent Feedback: Routinely refer to the KPIs in team and individual meetings.  Ensure that team members understand that you regularly monitor these KPIs and that you share them with the rest of the organizational leadership.
  3. Create Action Plans:  Collaborate with your team members on defining the plan of action they can take to improve on the KPIs.   Document the plan in writing with the KPIs.
  4. Track Progress over Time: Seeing the KPIs change over time is empowering to both the sales leader and their team members.  Make sure you have the tools to do that.  At Sugar, that is the essence of our claim to be the ‘Time Aware’ CRM.  We uniquely provide the ability to track your key KPIs over time.

By using KPIs as a coaching tool, sales managers can become great leaders and help their team members to develop their skills, improve their performance, and achieve their full potential for the organization.

Conclusion: Mastering Sales Team Management with Metrics and KPIs

From setting realistic sales targets and fostering a data-driven sales culture to utilizing CRM systems for sales metrics tracking, and using KPIs to coach team members, there is a range of strategies that sales managers can employ to drive exceptional performance and become great sales leaders.

So, what are you waiting for? Put on your analytics hat and get ready to master the art of sales team management with metrics and KPIs. Your team's success is in your hands!

Good luck and contact us if we can help.