KPIs are integral for the success of Sales roles across many industries – including Events & Wedding Sales.
But what are they?
By definition of Wikipedia, KPI (Key Performance Indicator) is:
a type of performance measurement. KPIs evaluate the success of an organisation or of a particular activity (such as projects, programs, products and other initiatives) in which it engages.
… sometimes success is defined in terms of making progress toward strategic goals. What is deemed important often depends on the department measuring the performance – e.g. the KPIs useful to finance will differ from the KPIs assigned to sales.
For my Events & Weddings sales teams, KPIs have 3 facets:
1. Target Revenue
2. Stretched Targets
3. Conversions
The venue’s Event Sales teams are broken up into departments as per their job roles. Wedding Planners, Coordinators & Sales members are under the Weddings targets and the Conference Managers, Event Managers & Business Development Managers are then working for the Corporate Targets. If I’m working with a smaller venue where there is one Events manager looking after the lot, then simply one combined department is fine.
KPIs are an important part of not only hiring & HR but also onboarding and training. It’s super vital to have the hard conversations on targets and bonus structures before advertising for your new recruits so they can see that you are confident with your targets – and in turn, they can also express their understanding of KPIs. Once you have decided how much the individual will receive as a total bonus for the year (based on experience, responsibility & skill set) then you can work out how much each individual can earn each quarter.
1. Tips for Target Revenue KPI structures:
Firstly if you haven’t created your Budgets, Forecasts and Event Revenue results from previous years – now’s the time to start. Make sure you are calculating the average spend per event/wedding and keeping F&B separate from Miscellaneous revenue. Once you have completed the previous year’s spreadsheets – you can then set the department targets for the upcoming Financial Year or Calendar Year. From here you break It down into Quarters and calculate how much revenue the Events & Wedding Sales team members are required to reach in order to receive their individual bonuses. YOU’VE NOW CREATED YOUR TARGETS! Next tip is to ensure you have reporting structures in place weekly, monthly & quarterly so you can see exactly how your Events & Wedding Sales teams are tracking.
Rules:
· If the team reaches the Quarterly target = bonus received!
· If the team has not reached the Quarterly target = no bonus.
· Opportunity to win back bonuses if Quarterly targets not reached: If the team misses Quarterly targets but makes up for it by reaching overall yearly targets then they will receive the bonuses for the missed quarters at the end of the year.
2. Tips for Stretched Target KPI structures:
Here’s where it can get interesting. Your business can make a whopping amount of revenue here if you have the right Sales person for the role and are willing to reward them for their hard work. Stretched KPI Targets will work with support and understanding. I would generally start the stretched KPI targets at a 10% increase of the yearly targets you worked out above, and also have a set bonus $ figure in place for your Sales Team:
Example Yearly Target: $1m
Stretche KPI Target (10% added onto target): $1,100,000
Increase over $1.1m bonus:
1% = $250
2% = $500
3% = $750
4% = $1000
And so on.
Capped at $25,000
Rules:
· The stretched targets are measured and paid quarterly with the same rules as the KPI targets above
· Ensure the figure you choose to give as a bonus is relevant to the total target (make smaller if the target is smaller and larger if you are expecting them to make large sums for the business
· Always cap the potential earnings at what the business has budgeted for in bonus structures
*NB: This strategy can still pay off for business with much smaller targets – the targets can be as low as $25k per quarter, just ensure the bonus structure reflects the amount of revenue they are making the business – you sure don’t want to be paying them $15k for reaching a $50k yearly target
3. Tips for Conversion KPI structures:
There's only one place to start when talking conversions and that's MEASUREMENT. You cannot implement a personal or a department Conversion KPI until you have measured it. My recommendation is always a 3 month report before you implement goals and KPIs to reflect reaching these goals.
So what is a Conversion Rate? It's a % of how many clients have paid a deposit vs how many client enquiries have taken place, over the period of a month.
Example conversion rates for 3 months:
Month 1 = 36%
Month 2 = 32%
Month 3 = 34%
From here I would recommend the Conversion KPI be tiered just like the stretched KPI targets eg:
Conversion KPI 1: 38% = $500
Conversion KPI 2: 43% = $1000
Conversion KPI 3: 50% = $2000
Remember to tailor these figures to work for your business, if you're a small business, perhaps take a zero off the end - this must work for your business as well as the sales teams.
Review Conversion Rate KPIs quarterly to ensure they work for both parties.
WHAT IF I WOULD PREFER TO AWARD MY SALES STAFF WITH TEAM INCENTIVES INSTEAD OF CASH BONUSES?
No problemo! I have also had teams move in this direction. The awards and calculations were simple! Reach $XXX huge target by the quarter, receive an extra day off and a team event worth $4000 for the weekend - mini break with the team!
I've flown my team in private helicopters up the coast to penthouse apartments and hatted restaurants. I've organised return flights to luxury resorts with 10-course degustations at Shannon Bennett's Vue De Monde. Even staycations in Sydney in 5 start hotels with Dom Perignon, personal makeup artists, hairdressers and masseuses (seriously! I've done all of these for my teams)
Sometimes it's not all about the money but the team building and experience also.
How do I know this works?
I tried and tested this at a multi venue group I worked at in 2016 – not only did I reach every KPI target, I reached the cap of each Stretched KPI target at every venue it was implemented….
So did my sales teams!
So why not reward your staff next quarter with structured, measurable and universal understanding Key Performance Indicators.
They will feel appreciated, understood and motivated...
... and in turn, you will increase Revenue!