For many VPs of Sales, board meetings can be a nail-biting, teeth-gnashing affair. Often, they’re thrust into the limelight, and expected (as if a robot) to spew out only the most traditional of sales KPIs, such as average deal size, conversion rates, retention rates, and the like. Regrettably, while these metrics offer pulse-points into sales performance, they fail to paint a full picture. Your Board is not doing its job if it’s not also considering these nontraditional metrics – metrics that provide powerful purview into the health and longevity of your sales organization:
1. Lead response times:
Most traditional sales KPIs are lagging indicators and, as such, are limited in terms of assessing sales effectiveness. To this end, your Board should be looking at other metrics such as lead response times. A Harvard study found that reps who contacted leads within 1 hour of outreach were 7x more likely to engage in a meaningful conversation with a decision maker. Time is of the essence. By assessing lead response times, your Board can assess how adept sales reps are at reaching decision makers. The data unearthed can raise red flags before the bottom line begins to signal trouble. At Node, we’re all about unearthing prescriptive data.
2. Social media usage:
Chances are your Board is laser focused on competition. Undoubtedly, it’s bent on ensuring your company stays atop key market players. Unfortunately, however, your Board doesn’t likely have an informative way of assessing the magnitude of this threat. Social media usage is a great place to start. Studies have found that top sales reps use LinkedIn. As well, multiple bodies of research indicate a direct correlation between sales reps’ social media usage and revenue. If your Board isn’t looking at social media usage and aptitude across your sales team, it has adopted too narrow a view.
3. Sales tool spend vs. usage
TechCrunch was spot-on when it touted 2016 as “The Year Of the Sales Stack.” Over the past year, salespeople have added a deluge of new tools to their sales stack – including tools addressing sales intelligence (e.g., LinkedIn Sales Navigator), lead sourcing (e.g., Lead 411), CRM (e.g., Salesforce), outbound sales (e.g., SalesLoft), conferencing (e.g., WebEx), and deal closing (e.g., DocuSign). Sales teams have spent hundreds of thousands of dollars haphazardly piecing together tools into their own “Franken-Stack.” Unfortunately, many of these tools aren’t used effectively – or at all. Your Board is doing you an injustice if it fails to scrutinize sales tool spend vs. usage. If a sales team is burdened with too many options, productivity is hindered and team members will devour valuable selling time attempting to navigate their sales stack.
Oftentimes, and especially in the case of hyper-growth companies, a good product and brand image can overcompensate for a poorly functional sales team. When the focus is merely on traditional sales KPIs, a Board can be easily misled. Your VP of Sales shouldn’t be the only one who needs to bring his or her “A” game to board meetings. It takes two to tango. Your Board has a responsibility. The onus should also be placed on them to scrutinize the nontraditional sales KPIs outlined above.