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How do KPIs kill sales? – PROBUSINESS.IO

Elena Solovieva. Photo: Pro Retail

Today, each client is worth its weight in gold, the business makes significant efforts and invests large sums of money to attract customers. But “curves” KPI in one account can nullify all efforts.

Today we are a consultant of the Pro Retail Group of Companies, who has been working with large contact centers for 20 years – Elena Solovieva. She will talk about common situations where KPIs can kill sales.

Probably, already in every selling contact center, key performance parameters have been introduced and the work of each employee from the boss to the salesperson on the line is assessed. But often the manager or the owner, when setting the parameters, commits deadly mistakes that lead to the loss of clients and money.

Marketers advertise and attract customers, the head of the contact center strengthens the line for the promotion (this is industry slang, if simply, it brings out the maximum possible employees), but sales are not growing. The budget is wasted. Why? – one of the reasons may be KPIs.

Let’s look at a few situations:

  1. Emphasis on the number of received calls

The manager understands that there will be a lot of calls, all of them must be answered and decides to evaluate the employee’s work not by the number of requests or completed transactions, but by the number of calls received per hour or day. It would seem that the seller will process more calls from customers and make more sales, but as a result, sales, on the contrary, become less. Why? – an employee with this approach is not interested in sales. His task is to “fill” the number of calls. And how he spoke with the client, whether he sold to him – that’s another question.

Solution: the emphasis in the KPI of the seller should be made on the number of completed orders or transactions. The number of calls is only as an additional parameter if you have repeatedly taken measurements and are 100% sure that the quantity will not kill the quality. I prefer to replace it with workload – the time that an employee spends during the day working with a client (dials his number, waits for an answer, speaks with him, draws up a deal).

  1. Focus on average talk time

The second error is similar to the first. The reason is the same – the desire of the manager to take more calls per employee. And again, it is not sales that go into sales, but an indicator that affects them negatively – this is the average call time. The employee begins to rush, does not identify the need, does not sell, because his main task is to quickly end the conversation. The result is again deplorable.

Solution: similar to item 1. Emphasis on KPIs by the number of transactions. I recommend eliminating the average time for sellers in principle and replacing it with workload.

  1. Applying a lower achievement threshold KPI with an unattainable plan

Lower thresholds in – when the indicator is reset to zero if it has completed less than a certain percentage of the plan. It would seem that this is an entirely adequate approach. Plan 100, fulfilled, for example, less than 70% of it – that’s all, zeroing, because you’re not working well. But this zeroing can play a cruel joke when the plan is clearly overestimated or even unattainable. And the employee understands that he will definitely never do even 70%. No way. And what does he do? – that’s right, he doesn’t try. And, therefore, it does not sell.

Solution: Recruit or grow strong salespeople and set ambitious yet achievable plans for them.

Elena Solovieva.  Photo: Pro Retail
Elena Solovieva. Photo: Pro Retail
  1. Application of the upper threshold KPI when the plan is too low

Upper thresholds – when, upon reaching a certain indicator, you will not earn more, even if you sell more. For example, a plan of 100 pieces of something. An employee can sell 200 pieces and get 200 rubles instead of 100. But if he sells 300, 400 or even 500 pieces according to his indicator, the threshold value is triggered, he will still receive 200 rubles. Of course, such a situation can happen if the plans are incorrectly set, when both the plan and its overfulfillment are easily achievable. The initial problem in this situation is incorrect planning, but the final link in the loss of sales is already. After passing the threshold, an employee may simply start to “drain” customers, since the sale will not count towards him anyway. Why then make an effort?

Solution: the absolute mirror of point 3 is the situation where you need an adequate setting of plans, then the employees will not constantly “bump into the ceiling.” And if a star appears in the team that sells more than others and makes, say, 170%, then why not think that the ceiling is not always needed?

  1. 100500 KPI

100,500 performance indicators appear when a leader wants to embrace the immensity. As a result, we have defocusing instead of the result. Yes, and one indicator begins to “weigh” negligible, for example, 5-10 rubles per month. And the salesperson may simply decide it’s easier to forget about him and focus on something more “weighty” in terms of payment, or put more effort into achieving sales for a product that he is better at selling.

Solution (recommendation): do not shallow, highlight the main focus for the seller, set no more than 4-5 clear KPIs. And not try to squeeze 5 more inside each.

  1. Late communication of plans to employees.

I would also like to point out one more mistake. It is indirectly related to, but directly affects the result. We are talking about untimely setting plans and communicating to employees. For example, the plan for May is posted on May 20. And it is not quite what or not at all what the employee expected. The focus of his attention was directed in the other direction, and then he received a surprise. It may happen that he realizes that in the 10 remaining days he will not be able to achieve the required performance and will simply “fold” his hands.

Solution: set up plans before the beginning of the month or, as a last resort, in the very first working days. Immediately after that, communicate KPIs to employees.

It would seem that all of the above is obvious, but in fact the above situations can be found very often in business.

May 4th will pass training by Elena Solovyova “Where business loses money”, join.

Link to training >>>

Expose KPIs with an eye and good sales!

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Fidenge Pecold

My profession is a journalist, but my hobby for 8 years has been studying Forex investing and trading. During this time, I managed to gain extensive experience in investing and trading cryptocurrencies and double my capital in the Forex market. To be the author of this magazine, the site owners invited me to participate in one of the 2020 trading webinars, and I will try to reveal the most relevant crypto market news for you.

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