Setting KPIs can often feel arbitrary, especially when entering new markets. How do you get past this uncertainty to set realistic goals?
Everyone has seen the "SMART" goals sheet. Are you specific with your goals when selling into new markets? Maybe it's by geo or by vertical or by title or by named accounts? Can you measure these goals on a weekly basis? Are the goals you set achievable? It's ok to shoot for the stars. Then here comes the tweaking part. You have to be realistic in a given time frame. It's always ok to ask for help. Usually, your network or higher-ups in your organization have seen mistakes or successes opening up new markets. Never eat alone and pick their brains whether it be in person or over zoom.
“SMART” goals; they’re simple and effective:
- Specific
- Measurable
- Achievable
- Relevant
- Time-Bound
This is a classic way to hold yourself accountable with realistic outcomes. When I think about revenue, I challenge sellers and leaders to lead with data.
Based on historical revenue, are you able to create a predictable model? Meaning, based on ACV, WR, sales cycle length, SQO/SAO production, are you able to determine how many opportunities you need at the start of each quarter/year in order to work backward on exceeding your quota?
At what stage does your team struggle the most? Meaning, if your longest stage duration is Proposal stage, why is that? Are there poor behavior trends you can get ahead of going forward to reduce the time it takes to get to Legal Review?
The more comfortable you are with data, the easier it will be for you to create goals that reflect historical success.
"You can't improve what you don't measure" - Peter Drucker.
When starting out in a new market, there can be lots of uncertainty. This uncertainty is the starting point, however, for a fun and exciting journey to figuring this new market out. But uncertainty can be the enemy of action, so you want to remove as much uncertainty as possible, as quickly as possible, so you can get out there and start driving results.
A few places to look for data in the planning and early implementation phase to eliminate uncertainty:
Your network - while you may not have a network of people in this new market already, you should be able to define a couple people who would be willing to speak with you who can help get the ball rolling. One or two quality conversations with your network can lead to a number of intros, and increase your network size overnight. If these people already know you, they'll also be kind if you fumble through your first conversations or have some misconceptions going in.
Interviews - when I was opening the Latam team, I learned so much from the interview process. I spoke with dozens of the top leaders in the industry and the vision became more and more clear each conversation I had. They helped me calibrate the resources needed for success, nuanced buying characteristics in each country that I was unaware of, partners and strategies that I wouldn't have learned about without their expertise, and more. I approached the process humble, and was honest about where I was at in my journey of learning the landscape, and so many people were happy to help fill in the blanks.
Online research - there's no shortage of information online. This is an obvious step and a great place to get a baseline before you test it out in the wild.
This can get you past the initial uncertainty phase pretty quickly, and put you in a position to take action.
That action COULD be to hire someone who IS certain and can go build out the appropriate KPI's based on their vast expertise in the the new market you're looking to enter. If this is an option and makes sense for your business - then this is a short answer. Go hire a superstar and let them do what they're great at. Get them what they need and get out of the way.
If that's not the appropriate action, then you need to establish a baseline to measure against - so you can improve and re-calibrate along the way. A few things I would consider in going through this exercise:
Prioritize winning early, over winning BIG early. You want to prove concept, validate the mission and get people fired up for the cause early. You want positive visibility across the org, and an infectious enthusiasm in this new market. If you shoot too high, do a good job, but don't quite hit your big lofty goals, you'll move slower, dampen the enthusiasm of the team, and may even get skeptics on if it's the right bet. Set very attainable goals, crush them, and ramp the goals up quickly from there.
Think long-term revenue, short term activity. The short term revenue will come as a natural output from intense focus on activity. As stated there will be some uncertainty early on - especially around when/where/how that first deal will come in. So instead of overanalyzing it - go out and get data. Lots of data. Set intense activity goals and talk to as many prospective customers as possible. Don't overqualify when you still aren't positive what you're qualifying for. Every conversation is valuable early on. If you hit your lofty activity goals, and have a solid product market fit, you should naturally hit reasonable revenue goals in the first year. Year 2 is really where you want to ramp up expectations after validating assumptions in year 1.
Re-calibrate, re-calibrate, re-calibrate. Every week you should review what we learned week over week. Trends, competitors, partners, what's resonating, what's not, resource needs, etc. Your ICP will likely fluctuate during this time, which will inform the types of prospects you'll want to go after. You may adjust this as often as weekly early on. This is also where you review your achievement against your baseline metrics, and may adjust these KPI's if they're not the right ones. But you need a starting point.
TL;DR
When entering a new market you want to eliminate uncertainty as quickly as possible so you can take action. Hire or network with top talent in this new market to improve your ability to define starting KPI's that make sense. Prioritize high activity and achieveable revenue targets early to collect more data and build momentum. Re-calibrate often based on your initial KPI's and adjust as you continue to get real data about your product in this new market.
Agreed…setting KPIs that are focused on outcomes or the results of complex efforts without historical information can feel arbitrary.
Therefore my coaching generally in the event you are setting up “first of kind” KPIs, whether it is a new organization or a new market, it is always better to focus on the inputs rather than the outputs.
It’s impossible to accurately predict your ability to attain a revenue goal or a pipeline generation goal when you are doing something for the first time. Instead focus on the inputs, the aspects of the role that you & your team can control. Get clear on the frequencies, behaviors, and competencies that you believe if executed will serve as the leading indicators to your success.
KPIs like the following are examples of inputs in your control that you could focus on when building a new sales motion:
# of personalized outreaches to net new prospects
# of calls to net new prospects
# of first meetings
# of new sales experiments started/completed
Communicate, measure, and socialize those inputs as your KPIs, and then as you compile more data, learn what are the realistic outputs of those inputs. Then you can iterate and mature your KPIs over time.
Having been someone who has expanded an office in a new region I can certainly empathize with anyone who is in this situation at the moment and I totally understand the hard work that goes in to getting a new market off the ground and eventually hitting goals. In this scenario I would recommend taking the time to understand the cultural buying norms of the new market and not assuming this new market will look immediately like your top performing markets. It takes time to understand a new market and the buying intent of customers. Set yourself KPI goals based on shorter time periods and make sure you review the success of these goals on a regular basis. Be willing to switch them up when you see any trends forming. Finally, don't be afraid to admit when things haven't worked. Just be prepared to change it with a strategy that makes more sense for the market you are in and be able to defend the strategy shift backed by intel you have gathered while selling in the new market.
I really like this question because it's so true! Leadership can break a lot of trust by implementing incorrect KPIs for a segment. Experienced sellers will get angry they are treated like SDRs, etc.
The best thing leaders can do is watch, listen, observe, and then replicate. What have the most successful reps done in this position? Are they having 10 calls a week, 2 on-sites a month, and 1 "high value activity" a quarter (like exec intro, hackathon, etc)? Standardize from the top and make excellence the norm.
Great question — I would recommend a few principles here for setting KPIs into new markets:
Start small: understand what the 2-3 wins will be over the first few months into this new effort. Let’s set KPIs in accordance with those wins, and communicate them clearly to the team, and to the executives supporting that new endeavor.
Report on them early and often: stay close to the KPIs in a new market endeavor—it’ll help identify trends to early wins and opportunities for adjusting KPIs.
Retain the right to get smarter: You need buy in from the team that we’re starting with these KPIs, but we will get smarter and will edit those as we go along. If you have an enterprising team, they’ll want to provide feedback and you’ll want to hear it from them, and adjust course.
As important as any KPI is why the metric is being measured, how you intend to reliably collect and review the data and the frequency you will get together to review the trend good or bad. In entering new markets, however difficult and unpredictable, you need to establish what you do believe to be true: size of the TAM, ICP definition and owners of each stage and target conversion of part of the funnel. Once you commit to the process - and give enough time for the work to show meaningful results, perhaps then can discuss what might feel arbitrary. If after all that there is still uncertainty about what goals might be realistic then commit simply to make improvements each week until there is enough data to set the right goal. Or take a leap of faith, set the goal and over communicate how and why you set it and what you'll do and why if you need to adjust at some point.
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