Don’t let the details throw you off. When it comes to KPIs vs. metrics, some key differences can impact your outcomes.
KPIs vs. metrics. Does it matter all that much? They’re both about data, and you can use both of them as tools to assess your performance. There are some subtle differences, however.
Metrics are actual, measurable data that may or may not be meaningful. For example, your sales agents may spend an average of 90 seconds on each call. That’s your data. You can use the information to compare your team to industry standards and set goals for metrics. For example, if the industry standard is an average of 75 seconds per call, your metrics or measurement for call time is high.
KPIs, or key performance indicators, are data points as well, but you use them differently. KPIs could consist of several metrics combined, or they could be just a single metric. KPIs are goal-oriented and let you know if you’re on the path to reaching your desired outcome.
Let’s get into this in a more concrete way, though, and look at KPIs vs. metrics as they pertain to phone sales.
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Using KPIs vs. metrics for better outcomes in your sales department
You can get a lot of information from your metrics. Metrics can measure anything from the number of voicemail messages your team leaves to the number of them that get callbacks. You can find out if there’s a particular script or offer that resonates more with your audience, and you can learn how much time goes into a successful sales call.
You can even set goals to improve your metrics. For example, you may want your team to improve voicemail callbacks by 20%.
Out of context, though, these metrics aren’t always helpful. Let’s take the call time example above. Your team spends an average of 15 seconds more on each call than your industry peers. Yes, that’s high in comparison, but what does it mean? What if your sales are 10% higher than your industry peers? Or your customer churn is 25% lower? If phone calls are your primary source of customer sales and service, that’s likely a well-spent 15 seconds.
This is where the KPIs vs. metrics can get messy. Metrics are great tools, but you need context and the right metrics. You may be leading the industry in the number of sales calls you make per hour, but that doesn’t help you very much if your revenue is non-existent.
That’s why you need KPIs in conjunction with metrics. KPIs put things in context and let you know if your selected metrics are on track to meet goals.
Here’s one way to look at it:
Let’s say you have five metrics you’re tracking: the number of calls, average time per call, success rate (how many calls end in sales), website visits, website sales.
If you want to increase your phone sales by 10%, your KPIs would be the first three metrics. How many calls is your team making, how long are those calls, and how many of them end in sales?
Website conversion rates are undoubtedly important, and you can also look at KPIs vs. metrics in that context. Website sales could even impact your phone sales. But if we’re looking specifically at data with the goal of increasing phone sales, and we want to keep things simple for now, website metrics aren’t part of our KPIs.
So, where does this leave us?
Putting KPIs into context
KPIs tell us if we’re on track to reach our goals. Therefore, you need to start with goals – and preferably SMART goals. SMART goals are specific, measurable, achievable, relevant, and time-bound.
Your goal to increase sales this year is not SMART. Though it is achievable, relevant, and time-bound, it isn’t specific or measurable. But if your goal is to increase phone sales by 10% in the next six months, you have a potentially SMART goal. It’s specific (phone sales), measurable (10%), achievable (context is critical, but for now, we’ll say it’s attainable), relevant (if you’re in a call center, this is a very relevant goal), and time-bound (six months).
Keep in mind that you also may need to adjust your KPIs. Remember, everything is in context; when you change one variable, others may shift.
Now let’s look at our KPIs: number of calls, length of calls, and results.
In theory, more calls would equal higher sales. However, we may need to shorten the call length. One outcome? Customers like the shorter calls and spend more. Your KPIs are looking good!
Another outcome? Customers feel rushed with the shorter calls and aren’t as likely to buy. You hire a few salespeople, so your team can make more calls and stay on the phone longer. Your sales go up.
Of course, this is just one of many possibilities. When you set goals, there’s no better way to know if you’re on track to meet those goals than by using the correct measurements.
Remember, it’s not so much an issue of KPIs vs. metrics. Think of it more as the two working together to help you bring your goals to life.
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