You have all these awesome dashboards, with color, data, and more information than ever before. But how should you use this information to measure your sales team’s performance? Way back in the 20th century, we measured revenue. There were some who went a bit further and measured activity, including:
That was then. Today, our nifty new dashboards don’t usually track all of the activity taking place prior to proposals. But there are plenty of items being tracked and measured that should be paid attention to because of their insights into performance. (Note that revenue and performance are not equal and should be treated as mutually exclusive.)
So what should you measure today? The five things you really need to know:
You can easily see what has been added to the pipeline, but how effective were the salespeople at converting leads or first calls into new opportunities? Call effectiveness is different than the activities listed above because the old numbers don’t factor in how many of those attempts and/or conversations were to the same lead or contact.
It isn’t enough to know how many meetings a salesperson had scheduled or completed. Were those meetings any good? Did the salesperson uncover compelling reasons to either buy or move the business to your company? Did the salesperson effectively differentiate? Has some urgency been created to move forward?
Okay. So they had a good meeting. Lots of salespeople have lots of good meetings that go nowhere. Is there pipeline velocity? Is the opportunity moving through the milestones and stages in a timeframe that is consistent with expectations?
One problem that many salespeople have in common is skipping critical qualifying milestones. Is the opportunity properly qualified?
Everyone measures closing percentage or win rate. But it’s the wrong metric. First, it’s a lagging indicator, not a forward-looking indicator. Secondly, it’s a result, not a driver. Thirdly, it doesn’t produce trends. Lastly, closing is the result of how effectively a salesperson executed the four other metrics listed above. By measuring the change in win rates, you can see whether or not you are making progress. Remember, the best metrics are only as good as the quality of the data.
Dave Kurlan is a top-rated speaker, the best-selling author of Baseline Selling, and a leading expert on Sales Force Development. He is the founder and CEO of Objective Management Group, Inc., the leading developer of sales assessment tools. He is also the CEO of Kurlan & Associates, Inc., a leading sales force development firm. He possesses more than 30 years of experience in all facets of sales development including sales and sales management training, consulting, infrastructure, leadership, recruiting and coaching.