Sales OKRs are NOT about sales targets
It is said that sales “lives by the number”. That number is usually some variation of revenue (bookings, billings, MRR, ARR…).
The problem is that this number, as Jeff Bezos puts it, is an output variable, something that is an outcome of various inputs that we can control.
So, the question is – what can we do to hit or even overdeliver on sales targets? How can we drive the performance of the sales team across the board without just demanding “more sales”.
OKRs or Objectives and Key Results are a great way to drive input variables of the sales team and individuals. In this post, I’ll explain how sales teams use OKRs and Gtmhub to kill it predictably quarter after quarter.
Start with data
The first thing to do is to understand what are the inputs that go into a great sales outcome. There are many different categories which we could track here:
- Activity (e.g. how many emails were sent, how many calls were made etc)
- Efficiency (e.g. email response rate)
- Effectiveness (e.g. win ratio, days to win, days to lose…)
- Structure (e.g. ACV, TCV, deal distribution)
- Success (e.g. bookings, revenue)
The data will show you very quickly which areas of your sales process are lacking and where could you improve. Perhaps you want to shorten sales cycle or increase activity.
The next thing to do is to understand the relative performance among different account executives (AEs). This builds on the idea of instrumenting sales team input variables – but more importantly – compares individual metrics against the team average.
On an individual level, this very quickly lets you see where the AE excels or underperforms.
While tracking individual metrics is important, it is often hard to say if the number is good or bad without comparing it to the rest of the team. Consequently, you will notice that areas of improvement will be different for different people – some will need to be more active, others will need to be more effective.
Identify most important inputs
Once you have a good idea of the team performance and individual performance, defining OKRs becomes straightforward.
You can drive improvements in the areas which need obvious improvements. Consider the following:
In the example above, you can see extreme levels of activity – the AE has sent 574 emails, more than 100% over the average – but, received only 48 emails or 8.4% response rate (less than 1/3 of average). Also, you can see an obvious bias for emails over the phone calls. So, it’s pretty easy to create an OKR:
- Objective: Improve communication efficiency
- Key result 1: Send 300 emails
- Key result 2: Increase email response rate to 30%
- Key result 3: Make 90 calls
The power of OKRs comes from the fact that targets are multi-dimensional. For example, if we just set the target to increase the email response rate, this could be easily gamed by just sending way fewer emails. However, with OKRs we can set multiple targets to keep the activity levels reasonably high, while also targeting more quality in the communication.
Automated Continuous Improvement
The benchmarking approach to picking and defining OKRs results in an automated improvement. Namely, the improvement by any one individual pushes the average up, hence resulting in continuous marginal improvements over time.
How does Gtmhub make this possible?
Understanding how to define OKRs for Sales teams is one thing – making this simple and real-time is a completely different one.
Gtmhub provides a solution which connects to numerous CRM systems, gives 200 metrics out-of-the-box and ties all the metrics to OKRs. The progress on all of the OKRs is automatically tracked, so the sales team can focus on the sales – and leave menial work of updating OKRs to Gtmhub.
Gtmhub makes sales OKRs easy for teams using any of the following CRMs:
- Microsoft Dynamics (365 and on-premise)
- Zoho CRM
- Oracle Sales Cloud
- Zendesk Sell (previously Base CRM)
If you’d like to find out more about how Gtmhub helps sales teams beat their targets with OKRs you can schedule a demo here.