Setting OKRs for the sales team

Bottom Line:

When setting OKRs for the sales team, DON’T focus on the number. Instead, set objectives for the performance drivers, activity, process, method, aptitude, and attitude.

OKRs for the Sales Team

A recent discussion in LinkedIn reminded me to go back and finish this article on how to set effective Objectives and Key Results (OKRs) for Sales.

We have learned through dozens of customer engagements and hands on experience, that OKRs are amazing and transformative when done right, requires significant commitment, and there are many pitfalls along the way.

As anyone who has ever worked as a sales rep, sales manager, or worst of all, as someone from outside the sales team who has had to work with sales people, sales teams are tough customers and can smell bullsh!t a mile away.

Implementing OKRs for sales teams is not straightforward. After all, what is there to set OKRs for? Sales is sales, and the number is the number.

The number, whether revenue, bookings, margin, ACV, MRR, ARR, is king.

The success or failure of a sales rep usually starts and ends with their performance against the number.

Got to 191%? Outstanding performance, Sir, and welcome to Presidents Club, ridiculous commission payments, a new car, champagne, back slaps and high fives.

Got to 49%? What the feck? Who are you anyway, and who hired you? Get your coat and don’t come back.

In this culture of extreme results orientation, and focus on success, as determined by a single metric, the number, what kind of OKRs can you set for sales teams which don’t just replicate the number?

First of all, the number is a performance indicator, indicative of performance, but the number itself is not a measure of performance.

 

What determines A-player performance?

Performance as a sales representative, or a sales manager relies on consistent performance in the following areas:

Activity Levels

The single most important predictor of sales success is activity levels. It is not enough to work smart, working hard is a prerequisite for sustainable, and predictable A-player success.

Process

Understanding both the sales cycle, and the buying cycle, and adhering to the process can turn B-players into A-players.

Method

At each stage of the sales cycle, A-players apply skills and experience appropriately. All the way from understanding the basics, such as questioning and active listening skills, through a wide spectrum of more or less well defined methods, A-players are professionals who apply the skills they have learned from experience and from study.

Aptitude

Domain Expertise. More than just fluency, sales teams must be attuned to strengths, weaknesses, opportunities and threats of their customers, and their markets.

Product Expertise. A-players will be deeply knowledgeable about their products and services. Ironically, a deep understanding of product features is required to abstract away from the product features during the sales cycle. A-players move confidently and easily between the abstract and the concrete.

Attitude

Above all, A-players maintain a positive attitude throughout the ups and downs of the sales cycles and throughout any personal or professional adversity. A positive outlook is essential when supporting a solution, or value-based, sales cycle, where problems are prerequisite precursors to solutions, and value creation. There are other attitudinal characteristics, such as openness, helpfulness, and not-being-a-jerk.

 

Bringing it back to OKRs

OK, thanks for the lecture, but what does all this have to do with OKRs?

Well, each of the performance characteristics above are excellent primers for setting Objectives for sales people.

Activity, Process, Method, Aptitude, and Attitude are all very qualitative metrics, and all of them contribute directly towards sales performance, which is highly correlated with sales results.

In additional, since one of the best practices of setting OKRs is to separate OKRs from compensation, including bonuses and commission, it makes a lot of sense NOT to set OKRs for sales teams based on their achievement of the number, but instead to focus on the important performance drivers, which sales reps are typically NOT paid on.

Finally, each Objective should be supported by 2-4 quantitative Key Results, and we can see from the examples below that these follow quite easily.

Examples of Sales OKRs

Activity

  • Objective: Reach & Engage Target Account Decision Makers
    • Key Result #1: Number of cold intro emails sent
    • Key Result #2: Number of cold intro email conversions to call/meeting
    • Key Result #3: Number of cold intro generated opportunities in CRM system

Process

  • Objective: Accelerate Sales Cycle
    • Key Result #1: Average duration from first call to demo
    • Key Result #2: Average duration from demo to close
    • Key Result #3: Overall conversion rate from first call to close

Method

  • Objective: Improve sales performance
    • Key Result #1: Complete Challenger Sales Training
    • Key Result #2: Shadow 25 Calls
    • Key Result #3: Execute Challenger Sales Plan for 5 accounts

Aptitude

  • Objective: Know my target customer domain
    • Key Result #1: Complete a SWOT for my target customer
    • Key Result #2: List 10 actions my target customer could take
    • Key Result #3: Present top-3 actions to my target customer

Attitude

  • Objective: Be more helpful
    • Key Result #1: Help someone in my team complete an account plan
    • Key Result #2: Make the coffee for one whole week
    • Key Result #3: Share my best presentations with the sales team

 

Now go and tell the sales team about this great new thing called OKRs… just tell them it will make them more money.