KPIs and OKRs are a crucial part of sales planning, and they will depend entirely on the objectives of the company.

So, let’s start speaking about KPIs:

KPIs (Key Performance Indicators) are quantitative measures used to evaluate the performance of a company or a specific team in relation to its strategic objectives and they can be financial or non-financial, as they are used to measure progress towards specific goals.

Some examples of usually used KPIs are:

• Conversion RateThe sales conversion rate measures the percentage of leads or prospects that convert into actual sales. It shows how effective the sales team is at turning potential customers into paying customers

• Customer SatisfactionThis is a metric used to gauge customer satisfaction based on direct feedback. It typically involves customers rating their satisfaction on a scale, often ranging from “very satisfied” to “very dissatisfied

• Churn RateChurn rate represents the percentage of customers who stop using a product or service over a specific period. It is a critical metric for assessing customer retention

• Average Price TicketAverage Price Ticket tracks the average monetary value of each sale. It provides insights into the typical value of transactions closed by the sales team.

And what about OKRs?

These are the Objectives and Key Results, a framework for setting goals used by organizations and aligning them with their main strategies and overall business mission.

Moreover, the Objectives are the goals that must be achieved, and the key results are the indicators that measure progress towards those goals.

Here, a few examples that will help clarify the explanation:

• Objective: Increase Annual Revenue by 20%– Key Result 1: Achieve 15% growth in new customer acquisition.- Key Result 2: Increase upsell and cross-sell revenue by 10%.- Key Result 3: Improve customer retention rate by 5%.
• Objective: Optimize Sales Funnel Efficiency– Key Result 1: Reduce lead conversion by 20%. – Key Result 2: Increase lead-to-opportunity conversion rate by 15%. – Implement and test 2 new lead nurturing strategies.
• Objective: Improve Sales Team Productivity.– Result 1: Implement a new CRM system to increase data accessibility by 30%.- Provide sales training sessions to improve closing rates by 10%. – Streamline the proposal creation process, reducing time spent by 15%.

So, what are the main differences between KPIs and OKRs?

• Purpose– KPIs: Measure the performance of a specific area of the business, such as sales, customer satisfaction, or employee retention.- OKRs: Define the overall direction and goals of the organization and align individual and team efforts towards these goals.
• Scope– KPIs: Focus on specific metrics and data, they are more operational and focused. In addition, they are often used to track progress towards specific goals within an OKR framework.- OKRs: They are broader and more strategic, define general and visionary goals.
• Time horizon– KPIs: They are used to monitor performance in the short or medium term, generally on a monthly, quarterly or yearly basis.- OKRs: They usually have a longer time horizon and are used to define the overall direction and priorities of the company for the next 1-3 years.
• Level of detail– KPIs: They are usually more specific and granular, providing a detailed picture of performance.- OKRs: They are high-level, providing a broad direction and focus for the organization.

It is very common to find organizations that fail to implement these tools successfully, and this is due to a variety of reasons, such as lack of resources, overly ambition, or unclear goals. So, what are the elements necessary to successfully implement KPIs and OKRs?

• Clear and specific KPIs and OKRs
  Make sure they are easy to understand, accurate, and measurable. This will make it easier to track progress and make informed decisions.

• Acceptance of people involved
  Bring key people into the development and implementation of KPIs and OKRs. This ensures that everyone understands and supports the goals.

• Take action based on the result
  Analyze the results of KPIs and OKRs and implement corrective or boosting actions. This will ensure that progress is made and goals are achieved

• Review and adjust
  Analyze and update KPIs and OKRs periodically to ensure they remain relevant and aligned with the overall strategy and goals of the organization.

• Provide resources
  Make sure there is time, money, and resources available to implement and monitor KPIs and OKRs.

It is also important to note that KPIs must be specific to each team. All employees should be focused on achieving the company’s goals, but each area will have its own strategy to achieve them.

Therefore, it is natural for marketing KPIs to be different from customer service KPIs, which in turn will be different from sales KPIs. The essential thing is that all these indicators are aligned with the business’s OKRs.