Measuring Business Health With Salesforce KPIs
In a system with as much data and reporting as Salesforce.com, its easy to ask nice looking dashboards. Unfortunately, you could ask for lots of meaningless data on this dashboard, and your sales team isn't likely to say no to your requests (demands?), right?
For instance, it's easy to ask for the number of leads each week. But leads are like Web site traffic -- they are better indicators of visibility and vague interest than they are of a solid pipeline. Further, activity management indicators (such as "number of dials" or "customer support call volume") are very easy to fudge and the numbers won't really mean much.
Here are the best indicators of business health, particularly when compared over time:
Marketing
Number of fully qualified or converted leads
Number of converted leads accepted by sales
Percentage of leads converted
Percentage of free trials that converted
Percentage of non-responsive or stale leads
Sales
Percentage of reps logging in on a weekly basis
Number of sales cycles started
Number of quotes issued
Average time in stage (or, alternatively, number of stalled deals)
Percentage of wins, losses, and no-decisions
Number of new customers
Average deal size, for new customers vs repeat customers
Percentage of repeat business
Percentage renewals/retained customers
Pipeline
Forecast sales vs quarterly goal
Actual bookings vs weekly expected achievement
Percentage of opportunities "moving backward" (decreasing in size or probability, or moving out in time)
Number and dollar value of disappearing (deals dropping out of the quarter, plus losses)
Forecast accuracy
Number and value of unforecasted deals
Customer Support
Number of new problems identified
Number of problems solved
Customer perceived "time to resolve"
percentage of satisfied customers
Number of highly dissatisfied customers
Customer Base
Cost of customer acquisition
Percentage of revenue coming from repeat business
Percentage of customer base that's still active/current
Customer lifetime revenue
Customer lifetime profitability
Customer loyalty
Before you ask the reps to enter any more data into Salesforce (which they'll view as an intrusion), figure out what you would do differently if you already had the report in front of you. Which decisions would you actually make differently? If you're just curious or not sure what you'd do differently, don't ask the reps to enter anything new.
Remember, don't get too fancy with the Salesforce.com analytics too early. They scare the employees, and besides, half the time the data aren't any good early during the system implementation process. Gradually add a new report, dashboard or analytic every six weeks or so.
