Metrics Steering the Ship

 

“High-performing sales teams use data as the foundation for their success. Whether looking to increase sales, maximize profit, grow the sales team or beat the competition, the good news is sales leaders have more than enough data readily available in their customer relationship management (CRM), enterprise resource planning (ERP) and other systems. The key for sales teams is to identify the most impactful data points and key performance indicators (KPIs), interpret the findings and take action to reach or exceed sales goals. An effective way to accomplish this is through well-defined sales KPIs.”

Oracle

 

When I first started in sales, if you had used the word metrics, it would have meant referring to the English system of measurement.

However, now if you use metrics in relationship to the sales and marketing world, almost everyone knows that you are referring to a set of measurable activities that correlate to sales productivity.

Of course, there were some elementary metrics being used. However, they were labeled as work goals or management mandates. At 3M, the benchmark activity was three in person demonstrations and to maintain an ongoing close list of five prospects every week.

In the safety distribution business, my personal benchmark was 20 personal visits with Level A prospects per week. Level A was defined as accounts that were producing or had the possibility of producing $200,000 dollars in sales per year. Keeping in mind this criterion has long been surpassed by time and inflation.

Now, in the advent of CRM software platforms and electronic tracking capabilities, in conjunction with historical productivity data, sales metrics have become more indicative of success.

The following list is a potential set of selling activity measurements that could be used construct an array of metrics for your sales team.

·       Phone calls: Prospecting and follow-up

·       E-mails: Prospecting, informational, newsletters, open rates and clicks

·       Conversations: Phone or in person. Not necessarily a sales conversation

·       Social media engagement: Number of engaging posts, views, and comments

·       Scheduled meetings: To confirm needs, bolster trust, inform and close

·       Demonstrations: Number of demos in correlation to the account potential in revenue

·       Sales presentations: Either individual product attributes or a system solution proposal

·       Referral requests: A superior method of gaining entry into a prospect

·       Proposals: A high quality, written sales contract with benefits detailed. Ready to implement.

·       Probability of a close: The sales teams best estimate of selling the product or service expressed as a percentage.

·       Closes: The exact dollar amount and type of product movement that take place as a result of the sales and marketing activity. To gain a perspective on the activity required to produce a viable income the term close rate is used. That simply means the average percentage of closes compared to the number of qualified proposals that take place.

A creative sales manager or consultant could easily double that list!

Here’s the concern over allowing a mandatory set of metrics to actually reduce sales productivity.

Number one is that a set of metrics that have been poorly communicated to the sales team can produce an over emphasis on hitting those marks and ignoring true sales opportunities. Keeping in mind that there is a limited amount of time and energy where your people are focused on presenting and closing business.

If the individual team members are convinced that their jobs are predicated on turning in the assigned number of reportable activities and not actual sales numbers, then with few exceptions the team will gravitate to the activities that impact their future employment.

Be keenly aware that your team will watch the consequences of their actions and the unofficial rules that play out in the company. If official guidelines are not enforced, then they lose their impact on your people. Make sure any latitude given is based on a firm set of criteria and can be explained to the sales team and senior management.

Concern number two is that the company has become locked into the measurement world and lost sight of utilizing the skills of the sales team members. Every measure should be taken to ensure that metrics don’t replace the best productivity efforts of your team members.

There are some concerns that great salespeople are best left to self-manage because they know what’s best to generate revenue. Don’t believe that lie.

Everyone needs some level of accountability. Everyone needs to be introduced to the latest tools in the sales and marketing world.

Don’t be deceived. There are salespeople who will turn in false numbers just because they are lazy or don’t trust the activity mandates will drive business.

Those people need to be confronted with the requirement to follow management directives.

There may also be situations where a different set of metrics are imposed based on a unique market that the salesperson has been assigned. Also, keep in mind the maturity, talent, experience, and demonstrated productivity in the past may allow more latitude with the mandatory activity compared to a sales newcomer. Let that be the exception, rather than the rule.

When the company and its sales managers lose sight of common sense and compassion because of a dogged determination to adhere to a set of key performance indicators, expect low morale and turnover.