In any organization, sales become the engine that drives the business. Revenue being the fuel to the engine it is essential to have the right metrics to measure sales. It is highly critical for us to measure the sales revenues as that gives us the right direction. Metrics written for the sales have to be well thought out and analyzed.
The Objectives and Key Results (OKR) goal-setting framework helps the sales team to achieve results and aspire high. OKRs align the sales department to work together on the same priorities set by the organization and yet let the individuals be creative and aspirational. OKRs are set by the team together collectively and they agree to what they deliver. Every individual gets to design their objective and how they wish to achieve it. This makes the team engaged and happy.
⏩ According to a Harvard Business Review survey study of more than 230 buyers, 12% of salespeople are excellent, 23% good, 38% average, and 27% poor. What makes the 12% of salespeople excellent is their processes are highly focused and the individuals are accountable. These teams push themselves aggressively and set their aspirations high.
Sales objectives should have both input and output goals together to deliver, which makes it the right set of metrics to start with.
Sales are the face of the organization to the customer, they need to be more effective and productive. The numbers achieved by the sales team are directly proportionate to the organization’s growth. Hence, it is vital that the sales team set the goals right and sail in the right direction. Successful sales teams set audacious goals and do not shy away from stretching beyond what is required.
Do you know that teams that deliver higher results have aggressive goal-setting practices with the right metrics to measure? An effective team that delivers should have a healthy sales funnel and a high conversion and retention ratio. The sales team also works along with the customers to understand what is required that is critical to business. With all these, it is evident that they play a very important role in any organization.
Table of Contents
What is OKR?
O stands for Objective, which defines the “what”
KR stands for the Key Results which is “How”
OKR can be traced back to 1954 when Peter Drucker invented MBO or Management by Objectives. Later, when Andrew Grove co-founded Intel he further developed the MBOs to OKR framework. OKRs are adopted by various companies like
OKRs are the well-defined and proven framework that helps organizations to create the strategy and allows the team and individuals to align to the strategy.
Objectives and Key Results(OKRs) play an important role in the Sales team. It helps teams and individuals to set the right goal and measure the right metrics. While most of the teams work towards identifying the output, OKRs work on measuring the outcome. As the Objectives are both top-down and bottom-up, it increases collaboration and clarity.
Also, it is important to write the OKRs with clear Key Results that are linked with the results. Adding a day-to-day task to the Key results will take away the focus and the deliverables will suffer.
Sales team OKRs should not have Sandbagging OKRs as it will be setting the bar low. It will be ideal to set stretch or ambitious OKRs. Any Key Result should have the right input to give the right outcome. Also, Sales is a dynamic team, their goals are not the same across the year. Every quarter will have a different target, to track and measure that we can write quarterly OKRs for the team, which will help to understand the lesson learned from the last quarter and craft OKRs for the upcoming quarter.
Few OKR Examples for SALES 🧑🏾💼
1. Market Expansion:
Expanding a new market starts with a whole set of new activities. Writing OKRs to achieve those aspirational objectives will be the right start. Increasing the customers and retaining them will be the most important objective of the team.
Objective 1: Become the choice of the customer in the MENA region
KR1 – Increase the market share from xx to yy%
KR2 – Increase customer retention by xx%
KR3 – Increase customer conversation rate to XX%
2. Establish winning strategies:
Deciding the right action for the objective is the first step. Once we know the actions we can plan the inputs to achieve those results
Objective 2: Improve the sales strategies that drive results
KR1 – Achieve XX% of the sales through the upselling and cross-selling
KR2 – Key Result: Achieve XX % of sales through Digital Marketing.
3. Strengthen the sales pipeline
Building a healthy sales funnel and developing OKRs to measure the pipeline will ensure the outcome
Objective 3: Build a healthy and sustainable Sales pipeline
KR1 – Deliver a monthly pipeline of $xM
KR2 – Achieve xx% “Enterprise” deals.
KR3 – Increase total enriched leads to xx%
4. Build Partnerships and create Channels
Build and develop strategic partnerships and create channels to ensure the network is established rightly. Creating and measuring OKRs for such actions will drive prominent results.
Objective 4: Turn our partner network into a revenue stream
KR1 – Generate $XK in partner revenue
KR2 – Attain X new customers from partner referrals
5. Increase Annual Recurring Revenue(ARR)
Measuring key metrics like MRR and ARR will deliver substantial results. This will also define the efforts needed by the team and create focus and priority.
Objective 5: Accelerate Recurring Revenue
KR1 – Deliver $XM in subscriptions by Q4
KR2 – Increase customer MRR by X%
6. Strengthen the sales team
It is important to have the right set of talent to ensure the numbers are achieved.
Objective 6: Strengthen the sales team to achieve the set tart
KR1 – Hire X SDRs by Q1
KR2 – Decrease the offer drop ratio from X to y %
7. Grow sales from existing accounts
Key account management is an important objective to achieve the sales targets by increasing the sales from the existing customers.
Objective 7: Grow sales from existing accounts through upselling and cross-selling
KR1 – Increase the sales of the existing customers by X%
KR2 – Increase the retention rate from X to y %
8 Empower and enable the sales team to achieve success
Equipping the sales team with the right skills and tools will help them to reach their potential
Objective 8: Empower and enable the sales team to achieve success
KR1 – Automate the email campaign process to increase the market reach by 30%
KR2 – Design a training program that fills the skill gaps by Q1
9 Nurture the leads to achieve increased conversion
Reaching the customers at the right time will increase the conversion that is essential to increase revenue
Objective 9: Nurture the leads to achieve increased conversion
KR1 – Increase by X% in getting the customer for a second meeting
KR2 – Increase the Email campaign conversion by X%
10 Aim to improve the data-driven analysis process
Decisions that are related to sales have to be enabled by the right data to ensure that the right decisions are made
Objective 10: Empower and enable the sales team to achieve success
KR1 – Sales review meetings with the data-driven insights bi-weekly
KR2 – Analyze the sales funnel metrics fortnightly to understand the conversion ratio
Implement OKR for Sales Team
While implementing OKRs for sales it is essential to understand the process and key metrics that support achieving the organization’s performance. As Sale’s main focus is on delivering numbers, setting clear targets that are ambitious is very important. Recognizing the key metrics that matter to business will help in crafting OKRs.
Talk to our experts more about OKR Software.
Talk to our experts to more about Sales OKRs. Our domain experts can work along with the organizations to create solutions that are specific to organizations. OKRs are industry agnostic and it is very interesting when it is applied to target-driven teams like sales. The outcome is quantified and hence the results are more tangible in nature. Write to Datalligence for implementing OKRs today.
The Objectives and Key Results (OKR) work best with sales teams and it works well with numbers and targets. OKRs channelizes the team into the same direction and set priority and create focus. Team goals are aligned to achieve the common result.
Sales managers are the key to any organization as they bring in lead and revenue into the business. The goal of a Sales Manager is to set and measure the right metrics and act on the insights provided by the data. They will be able to analyze the trend and forecast the sales based on the metrics measured.
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