Why Having Key Performance Indicators (KPI’s) are Important to Help Reach Your Sales and Profit Goals – Part III
By Thad Whittenburg
Well, the highly anticipated Part III of important KPI’s has finally arrived at your doorstep just like all those holiday Amazon packages that landed at the same place.
Before I dive into our latest KPI’s I wanted to thank you for reading these blogs through 2018. Hopefully you found them helpful for your business. I think 2019 is going to be a great year for companies that continue to embrace change. I recently heard from a software company (Seberis) that more and more K & B dealers are looking to new technology to help their business. That was really exciting to hear!
So, open your 2019 playbook and make sure that you have a real focus on changing your business so that you can take plenty of profitable market share!
As a refresher, back in February, I started a series of blogs on KPI’s and then branched off into different subjects. Now that 2018 is nearing its close and budget season is upon us, I thought it was important to approach this topic again.
As I mentioned in the last 2 blogs, we’ll be covering these KPI’s and this week I’ll be addressing the remaining #5 & #6
- Gross Margin Per Person (GMPP)
- Customer Survey Scores
- Margin Erosion
- Closing Ratios
- Net New Accounts
- Key Product or Service Growth
If your business is focused on increasing sales with the trade companies (builders, remodelers, property mgmt. etc.), net new accounts should be high on your list of KPI’s. I say this because it doesn’t help if you are setting up new trade customers and are losing existing ones at the same rate. I like a goal of 2+ net accounts per month for each salesperson. (new accounts – existing ones that left or went out of business) Of course this depends on their existing book of business so it’s just an average but for one salesperson, it equates to a minimum of 24 new accounts yearly! It’s important to review this KPI with your sales team monthly because it’s critical that they stay on top of it.
The final KPI we are going to cover is growth of a key product or service. As an example, if you have decided to start selling appliances or labor, you’ll want to make sure that you have goals and measurements for those categories. Selling something new is one of the hardest things to get salespeople to do because it’s out of their comfort zone.
Here are some steps you may want to take to ensure that your new initiative has a chance to be successful:
- Explain WHY you think selling a certain product or service is a good idea.
- Make sure there is a financial incentive in place to make it worthwhile.
- Outline the process of how you will be successful selling the product or service.
- Training, training, training!
Lastly, I just want to mention to always make sure your KPI’s are simple to understand and are very visible for the teams, so they can gauge their progress.
As always, I would love to hear your feedback!
Happy New Year and best of luck in 2019!
Don’t forget to check out our new KABS (Kitchen and Bath Systems) website https://kabstech.com/ and request a demo. The feedback from Dealers so far has been overwhelmingly positive!! Have a great day!