Rethinking Sales KPIs: Beyond Vanity Metrics to Meaningful Measurement

Many organizations struggle with ineffective KPIs and metrics that fail to drive meaningful business outcomes. They focus on vanity metrics and misaligned measurements. This often leads to counterproductive behaviors and missed opportunities for real performance improvement.

A Few Examples

What is a vanity metric? It's a metric that may appear impressive but has little underlying value toward achieving core business goals.

• MQL. Marketing Qualified Lead. Marketing easily pumps these up by buying useless lists or scanning people aggressively at events.
• Calls per day. Sales development teams love to tout these figures, especially if they are over 100. It doesn't mean they are calling the right people with the right message.
• Pipeline. Reps with big, fat pipelines but can't close deals may look better than reps who qualify aggressively and keep their pipeline lean and trim.

A Few Ideas

Here are some you might consider for your sales team:

• SQL. Sales Qualified Lead. Count them only if the persona, business, and pain are within well-defined criteria. Any inbound leads from Marketing should only count if qualified by Sales.
• Weighted pipeline. Calculate each rep's historic conversion rate and weigh their pipeline accordingly.
• Pipeline velocity. Assuming you have clearly defined sales stages, calculate how much time opportunies exist at each stage.

Know math, or ask someone who does

Most organizations I've worked with use averages when calculating their KPIs. Do you know the huge effect one or two outliers can have on averages? Compare the average with the median. You'll get a better sense of where most opportunities lie.

If you are exploring the right KPI's for your business, let's talk. I know math. And sales.