Sales Audit KPIs for CEOs: How Daily Measurement Drives Growth
Why Sales Audit KPIs Matter
The value of Sales Audit KPIs cannot be overstated. The quote—“You can’t improve what you don’t measure.”—from Peter Drucker, perfectly captures the importance that fellow CEOs and Business Owners place on the value of DAILY tracking top-line revenue and revenue growth.
According to a recent article in Chief Executive, Bob Nardelli, ex-of GE, Chrysler, and The Home Depot takes this concept to the next level by imploring us to routinely conduct Sales Audit KPIs.
“You can’t improve what you don’t measure.”
3 Sales Audit Questions Every CRO Should Answer
In case you missed it, and according to Nardelli, currently a PE Operating Partner, he routinely asks three (3) questions:
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What do you know for sure?
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What is in your pipeline?
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What are you hunting?
When Hunters Become Nurturers
Sadly, it has been my experience (and as Nardelli reinforces) in conducting routine sales audits (performance) with sales teams that “hunters become nurturers.” By that I mean, salespeople get comfortable managing their existing book of business! After all, nurturing existing customers typically delivers steady revenue (e.g. incentives/commissions). As a result, and as time marches forward, hunting new business becomes more and more a distant thought.
What Percent of Your Business is New?
Typically, and in Nardelli’s experience if not my own (new business divided by overall business) this “hits” around 10-12% of an existing book of business.
Nardelli says it needs to be 30-35% in today’s hyper-competitive markets.
As a companion thought, when setting salespeople compensation schedules, reward and/or incentivize your sales team for NEW sales in addition to MANAGING existing sales. This ensures a future growth track for the business.
The Positive Impact of Conducting Routine Sales Audits
Viewed through the lens of a Fractional COO and Executive Coach
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Nardelli personally visits the top 5-6 customers and asks four questions:
- What are your biggest problems?
- What are we doing well?
- What is the competition doing better?
- What else are you buying that we’re not providing? “
Solving customer problems is the best way to gain security with a customer. Opportunities abound and are often just sitting there; all you have to do is ask the right questions.
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Nardelli forces teams to categorize every initiative into three (3) buckets:
- Enhance the Core (grow existing customers),
- Extend the Business (new products/technology) or
- Expand the Market (new geography/customers)
If you’re not working in one of these three (3) above areas you’re not driving the business.
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Nardelli installs a weekly operating rhythm where revenue gets THOROUGHLY examined every Friday for two hours with these caveats.
- Not just “how are we tracking to plan”
- “What do we know for sure”
- “What are we hunting?”
- “Who owns it?”
- “What’s the deadline?”
Nardelli tracks, asks and holds people accountable. It is his way of separating the contenders from the pretenders, keeps salespeople on their toes and at top of their game with little risk of complacency. And that’s why his companies execute.
“If you aim at nothing, you will hit it every time.” (Pipedrive)
