When it comes to your sales team, you can’t manage what you don’t measure.
And in order to keep them accountable you need to have specific metrics that they understand and can, with some effort, achieve.
Every sales team leader will tell you which metrics are important to measure. To them these data points help them weed out the weak from the strong.
That’s great, and I’m sure you have specific metrics that you need to report up on, but below I’ve laid out some of the more common performance indicators that are used regardless of the industry or organization.
But first it’s important to define what you should keep your team accountable for.
Define What Is Important
If you are a sales manager and you don’t understand why your sales team isn’t making goal, then you surely won’t be able to make any changes to improve the situation.
After all, it could be their daily activities, product pricing, or maybe they simply don’t have enough product knowledge to be effective in the field…There are an unlimited number of reasons that are possible if you don’t know what is going on with your team.
The first step to keep your sales team accountable is to define exactly what it is that your organization finds important for it’s long term goals. And like most things, this can vary between companies.
One organization may have a sales strategy that focuses on getting their new products into the market. So brand awareness and sales on the new product are of the utmost importance.
Or maybe you are focused on growing your market share. Then you’d have your sales team focus on a much different set of activities then the prior example.
No matter your goals, properly defining what is important to achieving them should come first and foremost. ~ Tweet This!
What To Measure?
As I’ve mentioned EVERY business is different? So keep that in mind when you read the below suggestions because they are not the end all and only relevant stats to track?
Track and measure what works for your company, your product, and your sales management style.
I am not an expert in your company. So take these as suggestions and understand that I recommend them based off my experience and my sales strategy.
Total Dollar Sales
This is a common sales performance indicator. Is it also accurate….sometimes.
In a perfect world every sales rep would have an equal territory. They would have the same amount of prospects, clients, and upsell availability.
But we don’t live in a perfect world.
In many cases an inside sales team member will not be able to sell the same dollar amount as a major account executive who only handles the largest accounts your company can manage.
So if you’re going to use total dollar sales try to take into consideration that some territories or products produce differently than others.
Closing Ratios
How often do your sales reps close? Who are the best closers? Who are the best cold callers at setting up meetings? Perhaps you have a few who are talented in both.
Knowing these performance indicators will allow you to strategically position your sales team members.
It will also allow you to assess your sales reps on efficiency. That is VALUABLE information when used correctly.
Per Prospect Sales Amount
This differs from total dollar sales because if you have a sales person who closed 5 clients that account for 90% of their total bookings, that’s a big problem because you’re over leveraged.
If you lose one, you’ll lose a big chunk of business.
Using this information you can either spread out those large accounts or strategically position them to work only on the big whales.
Closing Rate vs Sales Cycle
An extremely overlooked but important (I think) metric to consider is the closing rate based on sales cycle.
You gain valuable insight from knowing where in the sales stage you are losing sales. Or even better, once they hit a certain threshold, where the likelihood of the deal closing jumps. What is the tipping point?
This information allows your sales strategy to focus on being proactive instead of reactive. If you know your sales team is losing sales consistently at the qualify stage then you can allocate resources to improve their skill set in that stage.
Actionable information to help a sales team close more sales.
Pipeline Accuracy
Pipeline accuracy is just as important for a sales rep as it is for a sales manager.
The more training you give your sales reps in this area, the more accurate their forecasts will be, and the better you can budget projected income.
As an overall basis this would best be measured as a percentage. Since every rep is likely to have a different dollar amount of sales to forecast.
If they forecast $100,000 in sales and they end up making $110,000 then they were off by 10%. At the same time if they forecast $50,000 in sales and only make $40,000 then they were off by 20%.
Activities
This is every sales persons nightmare. “Log your calls.” “Schedule your meetings.” “Update your activities.”
When a Sales Manager reminds her team that there are activity goals they are expected to hit every month (or week), a team may feel they are being micro-managed.
Quite the opposite is happening though.
If your sales are down and you haven’t made a cold call in two months…guess why you’re not making sales ?
Their goal is not to micro-manage and be watching over your shoulders all the time, instead it’s so they can help you better manage your territory.
Perhaps your activities are there, you’re doing plenty of cold calls and follow ups. But your sales are dipping once you get to a certain sales stage.
This is an opportunity for the sales manager to help train and coach in the areas needed.
Whether you track sales activities or not it is important to instill the culture that everything should be input into your CRM system. As a requirement, not a recommendation.
I currently use Salesforce.com and I write paragraphs not one liners. I am the kind of person who believes…
If it’s not in Salesforce it doesn’t exists. ~Tweet This!
I hope this gives you an idea of what you can track in order to make your sales team more accountable. Let me know in the comments below if you have any other ideas.
~ Johnny Bravo
Image courtesy of sheelamohan / FreeDigitalPhotos.net