Do you want to know one of the most common weaknesses we find when asked to improve a sales team?
It’s this: Managers do not hold their teams accountable.
Sadly, I’ve personally seen case after case where sales can only be described as “broken” and this is the most common cause.
However, managers can be forgiven for this because no one showed them how to lead a high performance sale operation. The majority of sales managers grew organically into their roles from their days as a sales representative or a company owner who doubles as an acting sales manager. They may know their industry, their product and even how to sell, but leading a sales team is another thing altogether.
The secret to optimising sales performance is in the set-up of your KPIs, supported by your systems and processes. Most of us know about KPIs and may even have some in place. The most common ones I see are:
- Sales/margin this month – actual compared to budget
- Sales/margin year to date – actual compared to budget
- Sales/margin year to date compared to same time last year (AKA sales year on year)
While these are important metrics, on their own they present a big problem.
Every time we figure out these numbers, they’re already history. They happened yesterday, last week, last month or last quarter. If there’s a worrying trend such as a decline, it’s too late to take action. It’s already happened.
This is why we call financial KPIs “Lagging Indicators”. By contrast, “Leading Indicators” are predictive of whether the above budgets will happen in the future tense. For example, “Penny” is a salesperson who knows both her budget and financial numbers, but also her effectiveness metrics.
- Her sales budget is 100,000 dollars per month.
- Through simple analysis, she’s figured out that the average value of her sales is 10,000 dollars, so she knows she has to get 10 sales per month.
From this point she applies a technique called “reverse engineering”. This gives her data that drives her performance.
Here’s how it looks for her:
- She knows she closes 1 out of 2 proposals presented. So, in order to win the 10 sales she needs, she has to present 20 proposals.
- Working further backwards, she’s also figured out that for every 2 Discovery/scoping meetings she gets, she gets 1 request for proposal. So, in order to win the 10 sales she needs, she has to win 40 appointments for Discovery meetings.
- She even knows how many phone conversations she must have before winning such an appointment.
So what does this all mean?
Working on the law of statistical averages, she knows that if she does NOT present at least 20 proposals, she won’t make her budget. Likewise, with the 40 Discovery meetings she requires, and so on. Her level of activity is predictive of her future financial outcome. She knows her performance numbers. She measures her activity and is therefore data driven.
Do you and your sales team know your numbers?
If you are a data driven sales organisation you can hold the team accountable. Your ‘A’ Players will even hold themselves accountable if they know their own effectiveness numbers.
If you see worrying trends, such as a drop in required activity, you can take corrective action and reverse such trends BEFORE they lead to a worrying financial result.
Use the Right Platform to Manage Data
Do you have a CRM or are you still coping with ‘clunky’ spreadsheets?
Even if you have a CRM, is it the right one?
Many CRMs, including popular brands are near useless when it comes to pipeline management tools. If you want a high performance data driven sales team, you have to get your tech stack right.
Some great pipeline tools include, PipeDrive, Pipeline, and Hubspot, to name a few. Our pipeline management tool of choice is Membrain. We prefer it due to the great reporting data you can get out of it, further enhancing the science to selling.
Great pipeline management tools should mimic all the major steps of your sales process and the examples mentioned do this. In other words, you need to be able to overlay your sales process on top of your pipeline. For example, you might have a 4-stage sales process consisting of: 1) Contact Client, 2) Discovery Meeting, 3) Present Solution and 4) Close.
A good pipeline management tool should show you where each and every opportunity is in these 4 stages. It can then calculate a “weighted forecast”. What’s more, if you know your Leading Indicators as per Penny’s example above, and if you programme these into your system that weighted forecast will be based on science. It will make forecasting surprisingly accurate.
Summary
- Know your Lagging indicators, but also …
- Know your leading Indicators. Use this data to hold your sales team accountable to the right activities.
- Get your tech stack right. Choose a platform that mimics your sales process.
All SalesStar coaches globally know that if they focus on these things in the first 90 days of engaging with their new clients, they can get results fast. They know that data driven sales teams are high performance sales teams.
So, what kind of sales team will you choose to have?
