Ultimately, the activities that lead to achieving your goals are called Leading Activities. When we measure and track these activities or keep score we call them performance indicators. When they are critical to our success, we call them Key Performance Indicators or KPIs.
For sales, when you think of leading activities, you may think about prospecting activities like phone calls, cold calls, walk-ins, networking meetings, connect meetings, introduction conversations, and making introductions.
At some point, the leading activities or “Top” activities yield signs of moving in the right direction. For example, if you have a ton of Connect Meetings, are providing a ton of introductions to your team, you should start to see “Middle of the Funnel” KPIs that let you know you’ve headed the right direction and are doing the proper leading activities. They aren’t final outcomes yet; however, there should certainly be early indicators of success.
Ultimately, at the “Bottom of the Funnel,” you should be able to distill measurable and quantifiable success. Unfortunately, far too few people have really thought much about their ideal outcomes or what they really want to happen at the bottom of the funnel. In sales training, when I ask what’s the ideal outcome of a sales call, I frequently hear, “The SALE!” with an inferred or obvious “Duh!” But is that really the ideal outcome from a sales conversation?
The “Ideal Outcome” I’m seeking from each of my prospect interactions is an introduction to my next 10-15 ideal prospects. I never want to “close” them! Instead, I want to have the opportunity to serve everyone they know. Frankly, I’d like to help them also, but my focus is always on keeping them feeling safe, heard, and understood throughout the entire sales process, not tricked, manipulated, nor pressured. Whether they become a client or not, I want them to feel so good about our relationship they introduce me to their most trusted contacts.
Since results lag behind the leading and middle of the funnel activities, they are said to be lagging or bottom of the funnel. Some good metrics to track for the bottom are things like the number of new clients, total revenue, total profit, and most importantly how many introductions (whether they bought or not).
Another lagging metric I love to have is the amount of elapsed time from a new prospect to becoming a client (sales cycle) and time to receiving your first introduction. This gives me an indicator of the velocity through my sales process, so I can identify roadblocks, stalls, and inefficient processes to improve upon.
NOTE: If you’re not getting referrals from the prospects who tell you, “No” they are leaving clues that there may be room for improvement in your sales process.
The only control we have over lagging indicators is through leading activities.
In nature, it’s pretty obvious, because if you don’t sow the seeds (leading activity-Top) you won’t have plant growth to measure (middle), and you won’t reap a harvest (lagging results-bottom). Can you imagine the farmer who didn’t plant seeds complaining at harvest time? There she stands at the edge of the field with her fists clenched in dismay that there is nothing to harvest even though she skipped planting. She still watered, weeded, fertilized, and tended the fields, but no seeds to nurture? That is completely cray cray.
Regularly, I meet with salespeople who complain about results and ask for better closing techniques, better leads, or complain their prospects make decisions too slowly. I also hear from networkers from around the world who complain their group sucks and they aren’t getting any referrals. Frequently, however, when we start tracking Top, Middle, and Bottom Activities, we often uncover a more leading activities could likely close most of the gap.
Some other massive gaps between leading and lagging KPIs are closed by leveraging other Bold Networking sales concepts like Mutually Agreed Agendas, Let’s Pretend Conversations, and effective questioning. However, if you’re not tracking your activities at each stage, you’ll likely have difficulty in identifying which tool, technique, and mindset might be holding you back.
There are typically a handful of activities that make up most of the work that must be done to achieve your goals. When we measure these activities they become Key Performance Indicators or KPI’s.
What is a Key Performance Indicator (KPI)
KPIs evaluate the success of an organization or of a particular activity in which it engages. Often success is simply the repeated, periodic achievement of some levels of operational goal (e.g. zero defects, 10/10 customer satisfaction, etc.), and sometimes success is defined in terms of making progress toward strategic goals.
If you were attempting to take off in an airplane, one of your key performance indicators you’d be paying attention to is the AirSpeed. Depending on the airplane you are flying a minimum airspeed is required for lift, much like different goals may require more activities or KPIs to be successful. A Cessna 150 requires about 55 knots depending on the weight of passengers and payload whereas a jetliner may require upwards of 150 knots.
In the sales world, getting introduced to your ideal clients take far fewer introductions to be effective than making cold calls. You might even experience a 1:1 ratio for referrals or introductions, which means for each introduction you get a new client. And, each new client may introduce you to their 15 closest friends who also need your service or 1:15. However, it’s likely you’d have to make 500 to 1,000 cold calls to get a new client, especially in business to business sales. Furthermore, since they weren’t referred to you, they are far less likely to refer you to their network. Hopefully, you’ll receive a couple of intros to keep the cycle growing or back to the cold call drawing boards.
What is the difference between Leading and Lagging KPIs
Top or Leading = Activity – When it comes to sales and prospecting, what are some examples of Leading KPIs you could have?
Bottom or Lagging = Results – When it comes to sales and prospecting, what are some examples of Lagging KPIs you could have?
Middle of the Funnel — mile markers or guideposts that inform you’re going the right direction.
What’s Your Sales Process Funnel?
Top of the Funnel | Leading KPIs
- Events Attended
- Introductions Given
- Connect Meetings
- Guests Invited
- Cold Calls Made
- LinkedIn 1:1 Convos
- Initial Prospecting Emails
Middle of the Funnel | KPIs
- Introductions Received
- Initial Prospect Discovery Meetings
- Number of Let’s Pretend Conversations
Bottom of the Funnel | Lagging KPIs
- Introductions Received (From No’s and Yeses)
- New Clients