AMA: HubSpot Director Sales DACH, Yusuf Bulan on Sales KPIs

The sales equation is quite simple:

Pipeline x Average Sales Price x Close Rate = Revenue

If not all KPIs are measured leading to this equation we are missing out. Focus should be on the area with the biggest gap!

Also if you have strategic objectives like Net New Growth or shift in a product mix or geographic expansion those KPIs become more relevant. So the importance of KPIs are dependent upon priorities. The basic function is the above mentioned sales equation.

There are plenty of KPIs which are not relevant if not used in the right context. Ultimately, revenue is the most important KPIs in sales. You can look at plenty of activity KPIs which are less important when revenue and pipeline are in good health. If not, then activities become more important. So it depends on the context.

It all starts with the business and strategic objectives of the company:

Growth Rate, Geographical Expansion, Product Mix etc. etc. are the determining factors of the KPIs. Once established it comes down to Revenue, Pipeline and Activities within those objectives. There will be a number of subsets within those categories but ultimately they will all lead to those fundamental KPIs

I would recommend to share KPIs very early on. Transparency helps to set expectations and progress. It allows to celebrate success and also to identify areas for improvement. It also creates a competitive mindset which we want to see amongst sales teams. (In a healthy manner!)

If the question is referring to the planning phase, then I would say to socialize KPIs with the management team (cross functional leaders) and only share once they are confirmed

Everyone should own the KPIs which are relevant to achieving the goals. If you can't influence the KPI they become less relevant and impactful. The context of the KPIs are also important if the intent is to drive behaviour. If there is no attention from management to KPIs this is probably also a good indication that they are no longer a priority.

KPIs which are not tied to objectives, initiatives or strategic goals are irrelevant.

E.g. why should someone focus on ratio between emails sent to meetings booked if meetings will only be scheduled via phone. Why looking at seasonality or amount of revenue booked in the final 2 days if the pattern stays the same month over month or quarter over quarter?

KPIs around deal progression can help to identify trends in sales duration, close rate and similar. So changes in the typical pipeline coverage needed can be observed early on. This will be a leading indicator for pipeline gaps and can trigger required actions.

Effective sales strategies can include multi-threading and broader stakeholder management. If there is a shift in buying personas this should also be identified and addressed.

If targets are reached you want to ensure that it will stay that way. So pipeline is very important as well. If pipeline is in good health, you are in a good spot. If not you need to ensure that the activity levels are up. Also, you want to be aware of an upcoming gap in the future. Therefore you need indicators alerting you ahead of time.

Absolutely yes! We celebrate high performers in team meetings (also broader teams) and share their attainment and other KPIs (not all of course). We also share averages amongst all team members so that everyone can compare themselves with others. We do have a culture of transparency established very early on.