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SALES PIPELINE MANAGEMENT
How to Use Sales Metrics to Drive Sales Performance
Drive Sales Performance with Intentional Goals and Salesforce Metrics
One hundred twenty years ago, NCR’s John Henry Patterson created and taught an effective sales process. He gave his sales force different territories and incentivized them to do the work. Does this sound familiar?
It should. Today we see this sales strategy everywhere in the sales world. Whether it’s door-to-door sales or business-to-business marketing, our techniques have changed very little from Patterson’s time. Sales management plateaued for over a 100 years, until 1993, when Siebel was introduced to the marketplace and sales metrics became readily accessible.
The sales process as we now know it is a merger of our true and proven system of territories and quotas with the metrics to break down every possible aspect of the sale and goal. Now, here is the question: Since the addition of metrics was a game-changer, why didn’t we change the game to more easily complement and utilise our new tool?
In this 2015 Dreamforce session, Jason Jordan, partner in Vantage Point Performance and author of Cracking the Sales Management Code, teaches how to take sales management and metrics to create an innovative and more productive sales force. Jordan shares a sales pipeline management template that finds and focuses on the right metrics. He also shows sales leaders how to use that metric to train and motivate the sales team.
Salesforce has perfected the art and science of data reporting. Still, many businesses don’t understand the power--for good and bad--that metrics hold.
Choose Metrics Carefully
Companies currently have the ability to access hundreds of metrics and reports. From demographics to marketplace trends, this information is just a few keystrokes away. CRM programs offer an avalanche of statistics, but how will sales leaders know which facts will impact the company? “These reports have become comfort food,” says Jordan. Metrics don’t necessarily help us achieve our bottom line. Yes, maybe historically, our target demographic have made larger purchases on Tuesdays. Is this relevant information or merely an interesting factoid?
Jordan cites Vantage Point research which reveals “our ability to report data has outpaced our ability to use data in a constructive way.” These findings seem counterintuitive. Shouldn’t more information clarify instead of confuse? The problem lies not in the scope of the available metrics but in our use of the information. In fact, states Jordan, research shows that an overabundance of data, that is not being properly applied is detrimental to the sales process. Jordan explains that misused data creates three common issues:
Misunderstood metrics creates a culture of inspection. No one likes to be micromanaged and, having a sales manager merely see the data and issue the directive to be better, does not inspire, explains Jordan. Inspecting data discourages sales reps; rather than feeling supportive coaching from management, reps feel they are treated with suspicion.
Heavy reliance on metrics creates a culture of compliance and anxiety. How often have we seen salespeople spend their time on leads that they already know won’t pan out, asks Jordan. Reps will engage in activities that are ineffective merely to meet a requirement imposed by management without solid reasoning. Instead of growing our sales pipeline, these practices shrink it, explains Jordan, because reps are focusing on meeting their metrics and not their results.
Misused data creates a false sense of control. Jordan asks sales managers to reflect on their use of data. How much time do managers spend trying to analyse information? Data, understood, helps managers feel as if they are contributing, but unless the information is actually used to influence the sales team, having the data won’t change the results.
Used skillfully, metrics can inspire and teach sales teams what they can do to make a greater change in the lives of their customers and the company. Sales leaders and sales managers can avoid creating a culture of inspection and anxiety by carefully choosing goals and metrics that work in tandem. Salesforce Lightning was designed to help both reps, managers, and leaders alike use data to inform goals and find best sales practices.
Don’t Make a Wish, Set a Proper Goal
Not all goals are created equal; many feel more like a wish. Many sales leaders believe any goal can be achieved and are disappointed when the sales team fails to meet the company goal. Despite common thought, only some outcomes can be directly impacted. Vantage Point defines three tiers of goal making: Business Results, Sales Objective, and Sales Activities:
Business Results. These goals, says Jordan, are the big picture, or the end goal. They are goals such as greater market share, and more revenue. These are the goals that sales leaders and managers cannot directly influence, asserts Jordan. Management can measure these goals and possibly even predict them, but the end results are the end results.
Sales Objectives. Sales leaders and managers have some influence on these goals, but they are essentially outside of our control, says Jordan. Examples of sales objectives include aims for greater customer retention, or higher product demand. While sales teams can teach clients about new products and incentivize them to encourage longevity with the company, at the end of the day, it’s the customer’s decision and no amount of goal-setting can change their minds.
Sales Activities. The only goals that we can truly affect, explains Jordan, are Sales Activity Goals. These are the goals that deserve our focuses managers and our salesmen daily deciding to put these goals first that drives our greater goals and accomplishments.
Merging Goals and Metrics
By understanding which goals can actually change the bottom line, sales leaders can apply the right metrics. This understanding is where CRM’s sales pipeline management template comes in, allowing sales teams to focus on the measures that can be changed. Number of meetings. Calls to prospects. Follow-ups on leads. These actions can be changed throughout the period, allowing a real impact on sales performance.
Jordan suggests that the most effective sales pipeline management begins when Sales Activity Goals are clearly defined and measureable. With so many measurements available, finding clearly defined goals is easier said than done. Many times leaders create goals by focusing on what feels like the greatest importance and, for good measure, throw in a smattering of other good business sense. Then companies find themselves with several well-meaning goals, but not goals that will work together for the bigger picture.
Luckily, says Jordan, “CRM is a decision making tool.” Sales leaders can look at leading indicators through the CRM program to discover actionable items. Salesforce makes the data readily available for analysis. If, on average, a rep makes X number of calls and has X number of deals in the sales pipeline, sales teams can increase the number of calls and expect an increase in the number of deals. Jordan’s suggestion for using Salesforce’s CRM’s sales pipeline template is important because it urges us to take the time to reverse engineer our goals, to start with the big picture and work down the tiers.
Jordan gives an example of reverse engineering goals and using Salesforce metrics to inform the process:
Goal 1: Increase revenue by X amount (Business Result Goal). It is easy to find a metric to help support and measure our goal. This clear metric will become the source for determining our success. It’s important to understand that this metric will be a lagging indicator, meaning the report deals with past performance during the last year, quarter, or month and the bottom line won’t change change.
Goal 2: Increase customer retention by X measurement (Sales Objective Goal). It is very possible to find metrics to support and understand customer retention. What is customer turnover? Why are clients going elsewhere? Is overall longevity with the company rising? Through looking at the data in Salesforce, leaders and managers should be able to see sales activities affecting these numbers, says Jordan. If not, the sales activities need to be adjusted. This goal might be measured with a lagging indicator such as number of customers who closed their accounts last quarter. Measuring in lagging indicators precludes the opportunity for impacting the goal. A leading indicator such as number of customer service calls made, however is an actionable item that could very possibly change the sales for the period.
Goal 3: Initiate follow-up protocol for new customers (Sales Activity Goal). These easily-read metrics provide insight for sales management who can then step away from their desks and take the time to go over numbers with their sales team. By identifying leading indicators such as follow-up calls with new customers, the sales team can ultimately impact revenue, the Business Result goal.
“Do better by deciding better,” advises Jordan. When Sales Activity metrics are understood, immediate action can be taken to change the outcomes. With informed metrics, sales leaders can find clear, actionable items and coach their reps. Salesforce Dashboards give real-time metrics and customised reports in real-time, allowing for quick course corrections based on leading indicators.
This new sales pipeline template of reverse-engineering goals may feel like common sense. Certainly, it is used in other aspects of life such as improving a career, pursuing higher education, or even losing weight. This formula, however, has been largely overlooked in sales management due to the familiarity of sales practices that have been in place for more than a decade. Measuring Sales Activity Goals allows increased sales performance to become not a wish, but a reality.