Last week, I got this question from a webinar attendee while tying up my ROI from CRM webinar series with MDM: Are back-end or front-end KPIs more important? During my presentations, webinars and consulting jobs, I focus a lot on the front end of the sales cycle. So I can see why this question came up.
Front-end and back-end KPIs serve different purposes. Back-end KPIs such as inventory turns, monthly bookings and monthly invoices help identify sales trends and measure growth. They let us know whether we’ve reached our goals, and there’s certainly nothing wrong with that.
Front-end KPIs like number of new leads, number of sales visits and number of new quotes can also tell us about where we are in relation to our goals. Rather than looking backward, though, to see where we’ve been, they look forward to help us see where we’re going. Tracking new leads against our historical hit rate and sales goal, for example, can help us determine whether we have enough new leads in the funnel to achieve our sales goals.
By combining front-end (leads and opportunities) and back-end KPIs (quotes and orders), we can measure progress toward our goals and make necessary course adjustments. (Learn more about how to use sales KPIs in Sales-Focused KPIs: KPIs for ROI.) So, neither should be used exclusively; they should be used in concert for the greatest impact.
But if they’re equally important, why do I focus so much on front-end KPIs in my blogs, presentations and discussions with clients? Because that’s where distributors commonly fall short. I’ve learned this fact from consulting and casual conversations with hundreds of distributors. I also know first-hand; when I worked as a distribution sales manager, front-end KPIs were basically non-existent. After we added them into the equation – combined with our existing back-end KPIs, and with the help of other sales process improvements – my company more than tripled its revenue over six years.
The question of whether front-end or back-end KPIs are more important is a good one. But I invite you to ask an even more important question: Which metrics really measure whether the right things are happening in my company, and am I tracking them?
I’ve talked about sales KPIs, front-end sales management, quote management, account profiling and more as a visiting professional speaker for associations and other groups. I’d love to help make your next event a success – learn where I’ll be speaking next and view my speaker profile.