Does everyone in your organization know the Key Performance Indicators (KPIs) that really matter? If you lack measurement, the issue are obvious.  But if you measure too much, the end-result is similar - employees and managers don’t know the key metrics to track and optimize. Too many reports creates the the illusion of measurement. Most businesses only need 3-5 company-wide Key Performance Indicators (KPIs). Below are 4 Core KPIs that the entire company can rally around to gain insights and optimize performance.

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The 4 Core KPIs

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Pipeline Report

• Shows which Opportunities are expected to close this quarter by Rep.
• When properly constructed, the Revenue number and Probability (often automatically associated with the Stage) provides a forecasting number.
• Below, we'll sketch this report out in detail.

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Activity Report by Rep

• Shows the calls, meetings and (optionally) emails for each Rep Can be segmented by Record Type (ie Customer, Prospect, Partner)
• We advocate making this viewable to all Reps.
• The goal is not to incentivize more activity - it's to gain insights. If one Rep is crushing it with half as many phone calls, that is worth discussing. LinkedIn, email, events...use this report to spur internal discussion on what works.

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Neglected Leads & Contacts

• A Lead or Contact that has not been contacted in X days. The X is dictated by your SQL (Sales Qualified Lead) Process.
• This will be different by company as well as by Lead vs Contact.  
• The report is obviously useful for the reps to identify who to reach out to. However, it's also really useful for management to track this number over time.

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Closed Opportunities

• This report groups all the Opportunities Won and Lost for the Quarter To Date (and/or previous Quarter).
• We like including the Opportunities Lost - not only Won - because it makes it easier to see changes in the overall win rate %.
• Including the Lost Reasons on this report is a big value. Aggregating the reasons for losing deals and discussing internally can inform sales, marketing, customer success & product.

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There are other reports that we recommend for specific teams and roles. But we clal this the 4 Core KPIs because there is so much to be gained from just these reports. The one that we're going to dissect is the Pipeline Report.

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The Pipeline Report Process

Changes Internal alignment is always more complicated than it seems on paper. But failure to align on the internal processes means that in six months, your Pipeline Report could be largely worthless. Have the discussion on the points below and write down the consensus.

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• When to create the Opportunity - This should be as objective as possible.  For instance, when a demo is requested. Or when a phone call is logged. We see Opportunities all the time that should never have been entered. 
• What Revenue to assign - This is easy when the transaction value is very clear, such as a product sale. It’s more difficult for project or subscription-based businesses where the full value is unpredictable. Make some assumptions (i.e. assume a 6 month retainer) and keep those assumptions consistent across Opportunities.
• What Probability to assign -While you can assign automatic probabilities to Stages, we always advise making this editable by the Rep.  To illustrate why, let’s say there is a Stage called “Contract out for Signature. This should have a high probability (i.e. 80%) assigned to it.  However, the prospect may stop responding. The Stage is still the same, but each month with no activity means the Probability should be lower.
• When to Close out the Opportunity - This is really important. Align on how long a contact should be unresponsive before closing out the Opportunity. Don’t let Opportunities hang out that are not real. This often happens when Reps use it as a way to remember to follow-up (see below).
• Have a Follow-up Framework - When an Opportunity is closed because the contact stopped responding, that doesn’t mean they must be forgotten. There should be a framework for follow-up. The most common is assigning a Task. Or periodically checking lost Opportunities due to non-responsiveness (see #2 below).  Don’t keep the Opportunity hanging out as a substitute for an effective follow-up process. 

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Technical Changes

Once you have the right process in place around the pipeline, it’s time to make some CRM changes.

• Required fields
  1. Stage
  2. Probability
  3. Revenue
  4. Lost Reasons
• Create a list of Lost Reasons that are common.  
  1. Don’t forget to include “Non-Responsive.” This information is so valuable.
  2. This list should by a dynamic field that only appears when the Opportunity moves to Closed-Lost.

Finally, there is the CRM configuration reporting changes required to create the actual report.  Let’s dive in below.

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Pipeline Structure

There are best-practices for the Pipeline Report but still some matters of preferences. As with any CRM report, think of it like an excel pivot table with rows that are grouped (y-axis) and columns of information (x-axis).

Groups

1. Month/Quarter
2. Owner
3. Stage

Columns

1. Opportunity Name
2. Weighted Revenue - this is circled red in the image above because this is the number to track. It's (expected revenue) x (probability)
3. Expected Revenue
4. Probability
5. Close Date

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Other KPIs of note

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As mentioned, there should be other KPIs for individual groups (and some specific to business models, like Saas).

It is very important that your CRM has appropriate roles and permissions so that only certain users can create reports viewable by all. Otherwise, you end up with hundreds (or thousands…) of reports with no one able to find the ones that are truly important.

Some examples of other KPIs are below.

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• Executive KPIs Revenue by month (TTM)
  • Cost of Acquisition (CAC) by month
  • Revenue per Source/Rep (TTM)
  • Leads by month (TTM)
  • Revenue by Source Category
    • Inbound
    • Outbound
    • Retention
    • Expansion
• Sales Team KPIs
  • Opportunity Cycle
    • Average Opportunity size
    • Opportunity time to close (Sales cycle length)
    • Change over time
  • Pipeline Velocity
    • Quantifies the time for an Opportunity to close.
    • This can be analyze by Rep, by Source, or both.
• Customer Success KPIs
  • Total Customer Service tickets by month
  • Open tickets by month
  • Net Promoter Score trailing average (TTM)
  • Customer Churn per month

We geek out on data. Why?  Because we’ve seen how powerful it can be for the growth, efficiency, and culture of a company. Visualizing this data in a tool like Tableau, PowerBI, or Looker makes it even more actionable.

Aligning on the most important KPIs is arguably the highest impact use of your organization’s data. Good luck, and if you need help, drop us a note.

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