You don’t need to be a trained mechanic to know that a rumble or a clunking sound signals a need to look under the bonnet before something goes horribly wrong. Sadly, the warning signs of a broken sales engine are seldom so clear, and they usually go unnoticed by inattentive or overburdened sales leaders (leading to similarly disastrous consequences).

That’s why it’s imperative for sales leaders to know their metrics and to monitor sales key performance indicators (KPIs) – the diagnostic equivalents to the check-engine light, in the business world.

The Benefits of Vigilance

By monitoring KPIs, a sales leader learns what’s working and what isn’t in their sales process, making metrics a key tool in the analytics process. That’s why they’re always the first things I ask to see when assessing or diagnosing a client’s sales performance. I want to know their sales figures, costs, revenue share, and sales efficiency (what work effort is being made and with what results). I want to see the data they have on how they work. This data provides a quick and clear overview of business performance.

No Metrics, No Oversight

Almost invariably, when there are issues, clients have no metrics. That’s a problem. Without KPIs, there’s no way for them to know when and where things are going wrong in their sales process, or to figure out how best to address those issues, once identified. Conversely, they also won’t have insight into what works and where to focus their energy when things are going well. The result is a fundamental blindness as to the business’s internal operations. Success might as well be magic, because it’s bound to be unrepeatable. An effective tool for laying out both the goals and the steps needed in order to achieve success is a commercial scorecard.

Finding The Right Fit: What Data Do You Need, And How Much Is Enough?

Even with some attention to KPIs, clients can still run into problems if they don’t have the right data (or enough data) about their own business or about the market more generally. I sometimes have clients who insist that their sales strategy is fine because their business has grown by 10%. That’s great – but only if the rest of the market hasn’t grown by 30% in the same time. Information about competitors’ performance is a key part of comprehensive KPIs, and shouldn’t be overlooked. It’s also important to start collecting this data early, because the picture these metrics provide becomes more and more accurate and helpful over time.

Already Monitoring KPIs? Great! Now Extend Them to Your Customers

Beyond monitoring their own performance metrics, sales leaders should be keeping track of customer data, too, to better understand and anticipate their needs and buying styles. Information such as cost-of-acquisition, customer lifetime value, satisfaction, and retention gives a company insight and a competitive advantage in the marketplace. It provides big-picture perspective and enables forecasting and more strategic decision-making for marketing and advertising. For increasing market share, that kind of knowledge truly is power.

If this is news to you, it’s high time to start identifying and monitoring your KPIs, and incorporating them into your sales strategy.