1. Define your targets
One of the first steps in CPO is defining your commercial targets and expectations. This includes setting specific, measurable goals. For example, you may want to increase sales or margins by a certain percentage, or reduce costs by a specific amount. These targets should be realistic and achievable, but also ambitious enough to push your business forward.
However, just stating that you want to increase revenue by, say, 5%, isn’t enough. You also need to know how to get there. Will you raise prices by 5%, launch a new product, attract new customers, or focus on up- and cross selling? Setting relevant KPIs is crucial here.
How? The key is to take a bottom-up approach. For example, if your goal is to increase overall revenue by 5%, you first need to know the average revenue per customer. This will tell you how many new customers you’ll need to reach your goal, and which actions – e.g., sales or marketing campaigns you can take.
Of course, when setting KPIs, you also need identify the right customers for you, consider sales velocity, pipeline management, etc. You’ll quickly find that KPIs are communicating vessels, and changes to one will have an impact on others as well. An external expert view can help ensure you don’t overlook anything.