Tracking Activities That Produce Sales
When it comes to tracking your metrics, there are a wide array of tracking tools. Your business is able to select the tool (or tools) that work best for you. At CEO Tools, one of our most recommended tools is the Trailing Twelve-Month (T12M) Chart. One of the reasons the T12M tool is so useful is because you have to track what produces sales.
Key Leading Indicators (KLIs)
In almost every business, the actions that cause a sale to close occur several days before it is closed, and the sales dot is added to the T12M chart. Think of these activities leading up to the sale as key leading indicators (KLIs).
Monitoring these measurable indicators can help give understanding into the sales since they are forward-thinking insights and predictions. By focusing on your company’s KLIs, you’ll spot potential weaknesses early enough to do something about them and enhance your company’s growth opportunities.
Your company should follow your KLIs, so that whenever an indicator shows the first signs of weakness, your company can take action to correct the issue. The T12M chart provides a real-time snapshot of activity, which gives management a heads-up of what needs to be adjusted to ensure the monthly sales targets are reached.
By identifying and tracking your company's KLIs, you can determine how to drive your company's performance. Are your KLIs advertising or marketing dollars? Bids submitted? Marketing calls made? Employees on the sales team? Requests for proposals (RFQs)?
For construction companies, one KLI might be the total dollar volume of RFQs. For retail operations, it could be total dollars spent on advertising, emails, and direct mail pieces, or response rates to marketing activities. Using T12M to track these indicators and their corresponding results, you can quickly identify trends and take action.