You could take out a whiteboard and brainstorm a few goals out of the blue. Or you could use Objectives and Key Results (OKRs), a proven goal-setting method that will ensure your team has plenty of drive to succeed. Setting OKRs will help you focus on growth, and research shows that sales leaders who do that see better long-term success.
Let’s discuss what OKRs are and how you can use them to drive success for your sales organization.
What are OKRs in sales?
Objectives and Key Results (OKRs) is a goal-setting method that requires three things: An objective, a time period, and a list of key results. Using the OKR framework, a sales team can set overarching objectives. Each individual can then determine the key results they can contribute to the team’s collective goal.
Sales teams can use OKRs to streamline and simplify their efforts, though it's often passed over in favor of the SMART goal framework. SMART stands for Specific, Measurable, Assignable, Relevant, and Time-based. This acronym has been the framework recommended most to students and professionals alike when it comes to setting goals.
The OKR framework is incredibly different from the SMART method and is overall a much better fit for sales teams. Let’s take a look at the difference.
SMART Goals vs OKR Framework
SMART goals are best for individuals, while OKRs are best for teams.
Setting SMART goals can be an effective approach for setting personal or individual goals; however, it can be challenging to measure the progress of an entire sales team with this framework. After all, setting a goal is one thing, but having an entire team of people understand and work together to achieve it is another.
That’s where OKRs come in. OKRs create measurable, attainable goals for an entire team. They are especially useful in sales. In sales organizations, reps can easily get wrapped up in their own quota and workflow. While working the daily grind, employees can become hyper-focused on tasks without understanding how their work connects to the bigger picture.
If a sales team is following the OKR framework to map out their priorities, they would set one overarching goal. That overarching goal is then broken down into smaller measurable goals called key results. These results must be attained within a specific time period.
Using the OKR method, each individual on your team has buy-in when setting organizational goals and knows exactly what they should be doing to support the team’s broader objectives.
OKRs are used in conjunction with KPIs for optimal success — though the two can often be confused.
OKRs vs KPIs
OKRs are goals for the team, while KPIs are the metrics by which the team’s success is measured. An example of an OKR would be “Earn a quarterly revenue of $575,000, a 15% increase over the prior quarter’s revenue.” An example of a KPI would be “Total revenue by quarter.”
Still not sure what the actual difference is? Learn more about sales metrics and sales KPIs, then check out this overview of what the OKR framework entails.
An OKR goal is made up of three things: An objective, a time period, and a list of key results. Let’s break these down.
This defines the qualitative outcome of the goal and what we're looking to accomplish. Your objective should be concise and easy to understand for everyone in your organization.
A set time period to measure the effectiveness of actions taken to meet your objective. Many teams define a three-month period for OKRs to align with their quarterly business calendars.
Measurable results, split into three key results, that increase with difficulty. Think of each key result as a "milestone" getting your team closer to your objective.
Key result one: Quantifiable goal we can accomplish with 80% certainty.
Key result two: Quantifiable goal we can accomplish with 50% certainty.
Key result three: Quantifiable goal we can accomplish with 20% certainty.
Now that you know the structure of the OKR framework, let’s go over how you can set them.
How to Set OKRs
Identify areas of growth.
Align OKRs with business-wide goals.
Establish OKRs that are quantifiable.
Get input from the entire team.
Ensure that individual sales reps know what to do.
Remove roadblocks and provide encouragement.
Create a chart to document progress.
Celebrate the wins, improve upon the losses, and gather feedback.
1. Identify areas of growth.
What do you feel your team most needs to improve upon? Setting OKRs that tackle these areas of growth can be an excellent starting point.
For instance, if only 75% of sales reps met quota last quarter, you might set an objective to increase that number by 10% by the end of next quarter. The key results could include:
Key result one: Every sales rep spends one more hour per day finding more qualified prospects.
Key result two: Every sales rep books two more meetings per week than they did previously.
Key result three: Every sales rep closes eight more deals per month than they did previously.
2. Align OKRs with business-wide goals.
Every OKR you set must be aligned with business-wide goals. Whether the leaders at your company want to increase net profits by a certain amount or reduce customer churn by a certain percentage, every goal must feed into that objective.
Business-wide revenue goals are simple, because you can adjust the team’s revenue goals to help reach that objective. But what happens when the business wants to do something less sales-related, such as mitigating security risks for current customers?
You might look for vulnerabilities in your sales systems and set OKRs that reduce the mishandling of customer information. Remember, however, that the key results must be concrete and measurable. An example here would be “Adopting a new CRM by the end of the quarter that offers better security measures.”
3. Establish OKRs that are quantifiable.
OKRs must be quantifiable — there’s no space for vague goals such as “Increase revenue” or “Sell more products.” Assign a number or percentage to each of the OKRs, starting with the objective down to the key results.
If no quantifiable measurement is attached to each OKR, you risk setting a goal that’s too lofty or unattainable.
4. Get input from the entire team.
When defining the objective and key results, it’s important to gather input from the entire team instead of only having goals come from the top and trickle their way down.
That way, your team members don’t feel like they don’t have a say — and the truth is, your sales reps likely have a better understanding of the goals they can achieve. Listen to them carefully, and don’t forget to directly integrate their input into each OKR goal.
5. Ensure that individual sales reps know what to do.
OKRs are highly effective because they are specially designed for teams. That said, each OKR goal should have a clear directive for individual reps and what they must do every week or month to help the team reach its key results.
For instance, if your objective is to increase revenue by 20%, have each team member spend one more hour each week upselling five of their current clients with the goal of closing one more upselling deal per week.
6. Remove roadblocks and provide encouragement.
When sales teams have demanding goals, it’s all too easy for reps to be discouraged — especially if they’re running into roadblocks or aren’t receiving enough support. If your team has trouble with a current tool or process, be sure to remove those roadblocks so that they can effectively reach their goals.
7. Create a chart to document progress.
We recommend having a designated place to document your team’s progress to your goal at the end of each week. This keeps your OKRs top of mind for members of your team, and keeps everyone accountable for their role in helping the organization reach its goals.
Creating a progress table like the version below and reviewing it with your team on a weekly basis can be a helpful practice.
8. Celebrate the wins, improve upon the losses, and gather feedback.
Last but not least, celebrate the wins. Your team achieved a key result — or, at the very least, came close — and that’s worth celebrating.
Study the losses for opportunities of growth. After that, gather feedback from the team to learn what they found challenging and what they found invigorating. You can then start the process all over again and set better and more effective OKRs.
Now that you understand the basics of this goal-setting framework and how to set effective OKRs, let’s review some examples in action.
Sales OKR Examples
1. OKR Example for Reaching Quarterly Revenue Goal
First, let’s look at an OKR example of an organization looking to increase its quarterly revenue. It performed well last quarter, but it feels it could be better as the year nears its end.
Earn a quarterly revenue of $575,000, a 15% increase over the prior quarter’s revenue of $500,000.
October through December of the current year.
Key result one: Record $25,000 in sales during the launch month of a new product.
Key result two: Close an upsell or recurring deal with 10% of the existing customer base.
Key result three: Decrease the sales cycle from 30 days to 25.5 days.
2. OKR Example for Reaching Leads Goal
Now let’s look at a sample OKR of a sales team looking to work on lead conversion. This sales team recognizes that they could improve the signup process and that that’s where they’re likely losing leads.
Improve lead processes to increase the number of qualified leads.
January through March of the current year.
Key result one: Reduce the number of fields on the signup page to streamline the demo request process.
Key result two: Respond to 80% of inbound inquiries within 12 hours.
Key result three: Each rep demos the product to 25 new leads each week.
3. OKR Example for Sales Enablement Goals
Having efficient sales processes is critical for growth. Here’s an example of how a team focused on sales enablement could approach using the OKR framework.
Streamline sales analytics and reporting for better data visibility.
April through July of the current year.
Key result one: Identify one central tool to use for all reporting and data management.
Key result two: Migrate data from existing systems into one streamlined system and teach team members how to use the new system.
Key result three: Decrease time spent on reporting and administrative tasks by 20%.
4. OKR Example for Conference Signups
In this example, a company wants to increase the signups they get during conferences. They know that their previous conferences weren’t as successful because their booth was near the back and their banner didn’t stand out compared to their competitors’ banners.
Get at least 50% more leads from every conference we attend.
January through March of the current year.
Key result one: Redesign the entire booth so that it’s more eye-catching and book booths that are in more transited areas.
Key result two: Equip every rep with a tablet that they can use to get signups outside the booth.
Key result three: Get 25 lead signups per day.
5. OKR Example for Prospecting
Prospecting is so incredibly important in sales. In this example, a business wants to set OKRs to get more qualified prospects, since their previous prospects were less qualified and didn’t end up demoing the company’s software.
Obtain more qualified prospects to increase demo rates by 20%.
January through March of the current year.
Key result one: Scout two more tools that can help us find qualified prospects in our target verticals.
Key result two: Send 10 more prospecting emails per day per rep.
Key result three: Complete 2 more demos per week per rep.
The OKR Framework Is the Key to Sales Success
As you can see, the OKR framework can fit a variety of goals and initiatives that can ultimately make your sales team more successful and accountable for their contributions to the overall objectives. Setting OKRs will drive your team toward success and empower you to exceed your organizational goals.
Editor's note: This post was originally published in October 2015 and has been updated for comprehensiveness.
Originally published Sep 7, 2021 9:00:00 AM, updated September 07 2021