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28th September 2018

Sales People Do What Their Managers Measure!

Financial Planning - Couple getting consulted

 

In some companies, Sales Leaders put a great deal of stress on the activity levels from their sales people. This may be a target to see 40 phone calls per day or 3 face-to-face meetings per day.

The result they achieve is a great deal of activity. It might be of low quality, but it is still activity.

In other companies, Sales Leaders demand a large number of names in the sales pipeline.

So, naturally, the response from the sales team is:

“You want names? I’ll give you names!
They are all rubbish, but at least it’ll keep you off my back!”

In other companies they talk about account management and the importance of strong relationships and becoming trusted advisors.

But each quarter end, as forecasts play out to be highly inaccurate and targets are going to be missed (again), everybody gets beaten up to bring sales forward. Every year end there is a fire sale. The order book is stripped, incentives and discounts are offered to shore up the quarter.

Sales people are told to do more prospecting but the measurement process focuses on individual deals. They are never asked the question:

“Have we won the account?”

The clients begin to wonder if their best interests are being looked after or if their supplier is primarily focused on squeezing as much revenue out of them as possible to hit sales targets.

Surprise, surprise…account management falls apart.

Sales leaders get the results they were not expecting!

As we like to say:

“You get what you inspect, not what you expect.”

In our experience, many Sales Leaders have a process for Sales Management. This looks at elements such as recruitment, forecasting, reporting and coaching.

Yet, we often find that few of them have Sales Process Management. They have not developed with their staff the various stages of the sales process to examine what works and what doesn’t. They are not continuously striving to improve the process.

The process should cover all of the following areas:

Territory Research Pipeline Management – establishing credibility as a supplier
Account Qualification Need Creation
Activity Management Qualification
Email Marketing, Direct Mail, Social Selling Demos, presentations, customer visits etc.
Negotiation Financial Justification / ROI
Marketing Events Proposal Standards
Discovery Workshops Account Management & Account Development

Selling is not a problem, it’s a process. Only when it’s not a process is it a problem.

If there isn’t a process in place with the right data sets, then Sales Leaders are unable to make informed decisions as they do not have a forensic understanding of the pipeline and the quality of opportunities at each stage of sale. Without the data sets to problem solve, understand the root causes, and the interventions required, they cannot be effective coaches.

As a result of not developing/managing the sales process and measuring the wrong things, they get the wrong behaviours from the sales team, and forecasting is a constant source of frustration and stress.

Top performers do what is seemingly intuition, but this is grounded on managing well a clearly defined sales process and measuring the quality of outcomes at each stage in the sales process.

This leads us to “Efficiency and Effectiveness.”

These two words are sometimes used interchangeably. But these two issues are like chalk and cheese. As an example, would you want an efficient Doctor or an effective Doctor? The Doctor that sees more patients per day, or the one that is effective at diagnosing and treating the patient? In an ideal world, we need both.

Many Sales Leaders are often just measuring efficiency but omitting to take into account effectiveness. This typically relates to measuring sales person activity (efficiency) rather than include what the customer is doing to progress the sale (effectiveness).

Increased Efficiency

This gives more output for the same input. Doing more of the same, with the same – or less, is the domain of middle management. And Sales Leaders operate this way all the time. If they measure that sales people are only making 3 customer visits per day, they may increase the target to 4 visits per day. A 33% increase will improve efficiency and increase sales, they think.

Yet the real problem is that with the increase in admin and travel time to accomplish the 4 visits, the sales people end up working later each evening. Morale and effectiveness drops, and the exact opposite happens of what they are trying to achieve.

Just because you can measure something does not mean
it should become a target to achieve.
You are measuring the symptom, not the disease.

In Sales Opportunity and Pipeline Management, we typically see that the measures are at each stage of sale and relate to the efficiency of the process. How many new prospects have been identified, how many new opportunities have been added, or how many proposals have been submitted?

Such measures mean that Sales Leaders cannot objectively be sure how well sales are progressing. Probabilities are frequently inaccurate, and they can only measure the inputs and activity of the salesperson. They do not know the quality of an opportunity and if it is worth the time and resources, or the likelihood the customer will choose them. There is a clear gap in what is currently happening and what is needed to understand the quality of opportunities and the quality of the outcomes achieved to progress sales.

Increased Effectiveness

In managing the sales process, Sales Leaders should also measure the effectiveness of activity. There is a need for qualitative measures of the face-to-face time with clients.

In the example of the sales person tasked with 3 visits per day, the measures of effectiveness from visits could be, for example:
• How many meetings have you set up with decision makers?
• How many ‘hunting licences’ have you organised to meet key people?
• How many projects have been qualified?
• What is the quality of customer commitments gained to progress opportunities?

If you focus on purely quantitative measures – the efficiency of the process – you will get your 3 customer visits per day. There needs to be a shift in focus towards qualitative measures – the effectiveness of the process – the outputs from customer visits. This will provide the data sets needed to inspect the process, and intervene accordingly as an effective coach – ultimately driving the right behaviours within the team. Furthermore, with a forensic understanding of the pipeline, Sales Leaders can produce more accurate forecasts leading to more successful sales performance.

By inspecting and measuring the right things, you will get the outcomes you are expecting.

In Summary

A sub-optimal or lack of a sales process, and measuring the wrong things are key factors as to why Sales Leaders do not have a forensic understanding of the pipeline. With the wrong data sets – as they are measuring efficiency not effectiveness – they are unable to make informed decisions, make interventions count, or coach effectively. This all leads to stress for Sales Leaders due to inexact sales processes, inaccurate sales forecasts and a lack of predictable, consistent and reliable sales results.

If we view this at a company level, the below model is simple yet thought provoking as to the huge difference these factors make.

As Sales Leaders it is possible to create a team and process that are incredibly efficient. However, if they are ineffective, you die slowly as a business.

It is possible to survive by being effective even if we are inefficient. But clearly, the ultimate goal to ensure success is to be efficient AND effective.

Effective Survive Succeed
Ineffective Die Quickly Die Slowly
Inefficient Efficient

How Advance can help

We are experts in Sales Qualification and Pipeline Management.

We help Sales Leaders and companies to measure the quality of opportunities, and provide the data sets which enable organisations to:
• Understand true root causes.
• Make high quality informed decisions.
• Deliver predictable, consistent and reliable sales forecasts and business results.

We have developed the SCOTSMAN® Commitment Manager app – the missing link in CRM sales opportunity management. Combined with our sales enablement solutions, this ensures business leaders become effective coaches, and people and processes deliver the results promised by your strategy.

If this was of interest, do get in touch to discuss what this might look like for you and your company.

 
Mike Wilkinson
Mike Wilkinson
Managing Director Advanced Selling Skills Academy

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