You can turn it around as you want, if you want to be successful in the long term, you have to work with KPIs. This also applies, or even in particular, to sales, because the controlling of sales key figures is on the one hand relevant for sales planning, and on the other hand absolutely necessary so that sales processes run as efficiently as possible. Assuming that the future of a company sometimes depends on this, it is still surprisingly often that people rely on gut instinct rather than numbers; In terms of strategic alignment, the KPIs simply fall behind. Often the reason for neglecting a key figure analysis and corresponding evaluation is that one does not know which sales key figures could be important and that there is no time to deal with them in more detail.
Choosing sales figures - a book with seven seals?
Sales KPIs make successes and failures understandable. They not only give an overview of where the sales department is, but are - if properly evaluated - also pointers through which sales processes can be controlled in a much more targeted manner. The actual state is recognized so that a target state, i.e. the goals, can be defined. And on the basis of these, the corresponding KPIs are then determined. They should be analyzed continuously in order to find out the current path to success and to be able to intervene if something is not going optimally. But now to the crucial question: How do you find the right KPIs for your company? The internet kills you with lists and suggestions that say it is best to include everything that is measurable in some way. Don't worry, it's not quite like that and it shouldn't be at all. The fact that there is no miracle recipe for the most important KPIs is simply due to the fact that precisely those activities are to be measured with which the sales goals are most likely to be reached - and these differ from company to company.
Sales figures in B2B - what are the differences?
Depending on the size and product, companies use different sales figures to evaluate efficiency. B2C and B2B are converging ever closer in many areas, but they still differ significantly in their orientation: B2C companies primarily sell quantitatively, B2B companies qualitatively. This does not mean that B2C products are not of high quality, but only that if they are not, the effects are far from being felt. This is where the keyword consumer society comes into play: If you order a pair of pants and they don't fit or are in some way not what you imagine them to be, you just send them back. Most likely, once this happens, you will not be completely put off by the thought of ordering from the same company again - the process is easy. In the B2B world it looks different: Here you have business customers, i.e. customers who invest an enormous amount of time and effort into buying a product. It is logical that there are huge consequences if the product ordered does not ultimately meet the expectations. B2C sales are therefore much more conversion-driven and this difference has a strong influence on which KPIs should be prioritized.
KPIs for B2B sales - where is the focus here?
But now we want to deal with which sales figures are relevant for the B2B area. At the beginning we already established that the sales figures should always be tied to the respective goals, so it's best to tame the horse from behind and consider which insights are most important for B2B sales. We name the following:
- New Leads: How many new leads can I generate per month?
- Lead Conversion Rate: How Many Leads Actually Become Customers?
So far so good and not far from B2C sales. From here, however, the paths split, because the following KPIs play a major role, especially in the B2B environment:
3. Customer Acquisition Cost: How expensive is it to transform the lead into a customer? The costs to be taken into account include marketing and sales costs as well as salary costs.
4. The time factor: How long is the sales cycle? In other words, how long does it take to transform the lead to the customer and how much gross or net time is specifically invested?
“Time is money” - but only if the advice doesn't suffer as a result
What do these sales figures tell us on closer inspection? Of course, every salesperson wants to generate as many leads as possible. But while in B2C you try to win many customers for comparatively small purchases, B2B sales often depend on significantly fewer customers who, however, also invest significantly more. The lead conversion rate indicates how many potential customers behave during their visit as desired and planned in advance by sales: If a potential customer jumps off during their research, this means a greater loss for B2B sales and possibly shows that the customer journey did not go optimally. In the B2B environment in particular, this is of the utmost importance, because due to the size of the investment, interested parties rightly expect not only a high quality of the products, but also extensive and targeted advice in advance.
This is where the sales metric, Customer Acquisition Cost, comes into play. It describes the costs involved in acquiring new customers. The complexity of the products, which is common in the B2B environment, is of course not without effects: Products are explained for a long time online and then mostly not understood correctly. The sales rep needs to take the time to find out the needs of potential customers, and not infrequently, by asking and answering the same questions. This is annoying in that he could have invested this time more efficiently in existing customers. "Time is money" is a saying that is probably not a stranger to anyone and in this situation it fits like a fist, because of course the cost factor is not least related to the time required. Ergo: The sales cycle should be as short as possible. At the same time, the advice must not lose its quality, after all, the customer should be satisfied and will continue to rely on your company in the future. It is therefore important to accompany potential leads on their customer journey as effectively and as quickly as possible in order to optimize the sales key figure customer acquisition cost.
Other key sales figures also play a role in these KPIs, including lead response time. A study by Lead Connect found that 78 % of potential customers in B2B buy from the primary respondent. 78 %! In addition, the study states that anyone who takes longer than five minutes for an answer will lose around 80 % lead qualifications. At the same time also led Havard Business Review conducted a study that found that the average time it takes a sales team to respond to an incoming B2B lead is a full 42 hours. In relation to this, Lead Connect found a 391 % increase in sales conversions if a company replied within the first minute. However, according to the latest information, only 1 % of the B2B companies can do this. Conclusion: The lead response time can and should definitely be taken into account when it comes to KPIs in B2B sales.
Efficiently optimize important KPIs in B2B sales
Okay, now you know the most important factors for B2B sales: Leads should be generated and, more importantly, transformed into customers, lead acquisition should also be as cheap and the sales cycle as short as possible, while still reacting quickly to the customer and he should feel as good as possible advised. Now one or the other's head may be buzzing. After all, we know that products in the B2B environment are often very complex and that a detailed explanation is required so that the customer can choose the right product. How is the sales person supposed to squeeze off time at this point and still be sure that the customer has understood all the details and is ordering exactly what he needs? In order to achieve this, suitable sales control and planning measures must be found. Once that happens, the results will be reflected in the sales metrics. Where can one start here? Imagine how much B2B sales could gain if they found automation options that would sort out unqualified leads from the outset and give qualified advice immediately and lead them individually to the best products. The sales team could then invest the time gained in looking after existing customers, which in turn has a positive effect on sales and profit. Schwups, the most important KPIs shoot through the roof, because such an AI responds specifically and above all within seconds to the needs of the potential customer and thus of course also increases the lead conversion rate. Good news for sales: such solutions already exist! We at FoxBase have developed the Digital Product Selector, a unique software with a self-service approach that uses targeted questionnaires to immediately find out what your customer wants. The result: Shortening the sales cycle and increasing sales efficiency by 40 %.
So you can see that it is worthwhile to deal with KPIs and to ask: Which key figures are actually important for B2B sales and why, in order to then find the right measures and solutions. If you are interested in ours, just have a look at ours Product page past.