Written by Sean McPheat |
Most salespeople we train know they need to achieve their KPI’s, as this is the key measurement against which their performance is analysed.
Normally these performance areas revolve around the number of calls they need to make, the amount of leads they need to generate or the time spent on each lead.
It is necessary to have these performance indicators so you can identify where your time is most usefully spent and they give your management the opportunity to see where development needs are required.
However, sometimes we see salespeople so bogged down with indicators that they are either impossible to achieve fully or there are so many of them that it’s simply impossible for them all to be ‘key’ indicators. In fact, one salesperson told one of my trainers he had over 50 KPI’s he had to meet.
That seems nonsensical to me, as no-one can spend their time hoping to achieve that number of goals. So instead, I ask my team to concentrate on KRA’s, that is, Key Result Areas.
Now, it may sound pedantic or petty, but there really is a big difference between the two.
Take, for example, the Call-Centre KPI of answering the phone within a certain number of rings, or the salesperson KPI of calling so many prospects in a week. It’s entirely plausible for these KPI’s to be hit every single time; yet the outcome may not be a satisfied customer or a new client.
I pay my guys on the number of clients they close because that is when we get the money rolling in. The fact they answer the phones quickly doesn’t always necessarily close the deal. Granted, not answering the phone quickly or professionally may lose the deal but it doesn’t automatically close it.
So, I ask my team to concentrate on results. I call these the ‘What to achieve’ goals, or the Key Result Areas. What they do to achieve them are called the ‘How to Achieve’ steps.
The KRA’s are the results I want. The KPI’s are the steps to achieve them.
I’ve often found that if I give a team member a KRA, they find different ways or steps to achieve them, without being constrained by a series of KPI’s.
I use KPI’s whenever a team member falls short of a target, so they can get back on track. But I’d rather them get 5 sales from 15 calls than 2 sales from 50 calls. They may hit the KPI of making 50 calls, but if they don’t get the results I want, it could be constituted a waste of valuable time. Quality beats quantity every time.
So, don’t let your KPI’s get in the way of your KRA’s. Ensure they help you achieve what you need rather than just be there so you can say you’ve been efficient. Efficiency doesn’t always equal effectiveness.
You may find you become more creative and innovative by aiming for your fewer Key Result Areas than for your greater Key Performance Indices.
Originally published: 14 April, 2015