On the KPI of Referring

“Some sales leaders do measure reps based on referral results, but referral activities are the referral metrics that matter. Results metrics are a lagging indicator, and you can’t manage to results. You can manage to these activities: number of people asked, number of referrals received, number of meetings scheduled, number of meetings conducted, and the close ratio of referred leads.”

“Even better, your reps have earned the right to ask everyone they’ve met during the buying process for a referral. By the way, 50 percent is conservative. Most salespeople say the conversion rate with referrals is more than 70 percent.

Revenue isn’t the only metric that matters. Set referral metrics around sales activities you can measure and manage. Then adjust your KPIs to match. Set revenue goals for each person. Your veterans expect their goals to increase year-over-year, so there should be no surprises. Now it’s time to set KPIs for activities and behaviors that drive revenue. The last thing you want is your sales teams engaging in mindless activity.”

Read more from Joanne Black on No More Cold Calling

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