OKRs for Sales Teams

“Sales already has a commission scheme. Do you need OKRs as well?”

Yes.

And the reason goes to the heart of what OKRs are for and about, for any team. And sales makes it particularly easy to explain what these goals are, which makes it helpful for other teams to understand.

I wrote earlier about the three different types of goals: activity, results, and value.

In sales, activity goals are things such as number of calls per day, number of appointments per week, number of proposals sent, and so on. They can be useful to drive activity, but they don’t always result in value creation. Results goals are usually what sales incentives plans are built on: deals closed, total sales, margin, etc. The missing component is value, and this is where OKRs come in.

In sales, there is much more going on than just the activities themselves and the final sale. Every sales touch has an intent to move the account along a series of steps towards an eventual sale. Each one of these steps creates value, and can be tracked. Hence, they are good candidates for Key Results.

Example OKRs for a Sales Team

Let’s say you have a marketing team that delivers leads into a CRM database. These leads are likely interested in your service, and are probably somewhat qualified, but you don’t have much more information about about them apart from a name and contact details.

Your sales team needs to turn these leads into sales. Each sales team (and sometimes each sales person) will have a different process, but it will usually have some steps in common. For example:

1. Make contact and verify the basic information in the CRM.
2. Get qualifying information about the account, including decision makers, budget and buying window and add it to the CRM.
3. Build a relationship with the decision-makers and any influencers establishing trust by adding value.
4. Set an appointment when the buying window opens for a discovery meeting.
5. Follow up with a demonstration, RFP, Proposal, etc — the regular sales pipeline.

A simple sales OKR based on this could be something like:

We will become a finely tuned selling machine

As measured by these key results:

1. Qualify 200 new leads with information about decision makers, budgets and buying windows entered into the CRM
2. Call each qualified lead twice and establish brand and name awareness
3. Set 30 initial sales appointments with newly qualified leads
4. Maintain win rate for deals in pipeline at 40%

This will lead to sales success, and the eventual outcome will be a good commission. Not only that, the sales team will have a stronger pipeline of deals to work on in the next quarter, and a process which balances effort across each phase of the sales process.

If your sales process is more complex, you may want to separate it into more OKRs, perhaps for prospecting, selling, upselling and renewal, for example. The OKRs are used to communicate and define the value that sales activities are supposed to produce. This gives your sales team a more detailed understanding of what they are trying to achieve, and helps you measure what matters without micromanaging their activities.

Of course, all of this depends on having a clear understanding of exactly how the sales team creates value, more than just the final number. If you don’t have this, then I will recommend a book below that I’ve found insightful, which gives really good guidance for structuring sales objectives.

Non-sales OKRs

What does this mean for other teams? In most companies, sales has a very clear set of activities, value created, and output, which makes them relatively easy to manage. Other teams can be more complex, but the act of managing is to understand how value is created, define the key metrics, and write clear Key Results that you know will create value in your organisation.

Book Recommendation

I’ve been reading a good book on sales recently which has a structured approach to prospecting in particular. I can recommend Fanatical Prospecting by Jeb Blount.

Chapter 9 in particular covers the four possible objectives for each prospecting interaction (call, email, message, etc):

1. Develop Familiarity
2. Qualify
3. Set an appointment
4. Close a sale

Jeb then goes on to prioritise these for different kinds of sales teams, from complex, high-risk, high cost product or service to low risk, low cost product or service, and then talking about outside sales, inside sales, and whether your CRM is already highly qualified or is fairly empty (eg startup, new territory).

I recommend using a similar structured approach to improving sales team performance, and then setting OKRs to motivate the specific behaviour you want to drive.