Sales is a lagging indicator. Tracking it only reflects what’s already been done. It’s like getting the final score of a football game after it has been played. It’s already too late to do anything to change the outcome. If you want to win a game, you better be looking at leading indicators like yards gained, first downs achieved and time of possession while you’re playing.
Far too many sales incentive programs fixate on lagging indicators like gross dollar sales, net revenue or total units sold as their key performance indicators. What they need to do is stop looking in the rear view mirror and start looking at leading indicators of success. A leading indicator foreshadows a future state. It tells you if you’re on the track to achieve your program goals or if you need to make course corrections to avoid catastrophe.
Let’s think back to our football game. Your quarterback has been sacked six times. Your team has earned no first-down conversions. And there’s still three minutes left in the first quarter. These leading indicators are already warning of a disastrous loss unless the game plan is dramatically changed. A coach who ignores alarms like these will be looking for a new job soon.
Leading indicators must be a planned part of your sales incentive program. Otherwise you’re left completely in the dark while the program is operating. Here are three leading indicators you can use to check the pulse of your program early on and if necessary allow you to take prescriptive actions to get back on track.
Program Enrollment
Promotions Participation
Program Website Logins
Program enrollment
Requiring participants to take some action to enroll tells you if your program is engaging your audience initially. The enrollment could be as simple as logging into the program website and clicking a “Count me in” button. Even this small step indicates a commitment from your participants. Set an enrollment deadline to better track early program engagement. Set enrollment goals and use regular reports on the total number and percent of eligible participants enrolled to tell you if you need to send more program enrollment communications and reminders. If you’re enrollment is low, you might even consider relaunching the program.
Promotions participation
Schedule promotions with bonus opportunities to gauge active participation. Use time-sensitive “Fast Starts” during the first month of the program to measure engagement. You might offer small earnings for passing a product quiz or for submitting a prospect list or even bonus opportunities for product demos in the first 30 days. Measure the number and percent of those enrolled who participate in the fast start as a benchmark. Use short-term promotions throughout the program to energize participants as well as act as a barometer of program engagement.
Program website logins
Offer a program website with tools to help participants succeed. Maybe it offers prospecting tools or tips on successful demos or even allows them to report activities like quotes or sales. It should also allow them to view awards and save them to their wish list. If the website offers these types of benefits for visiting, track their logins to see how many are regularly engaging with the program tools. Low engagement could mean you need to increase communications or offer promotions. High engagement is an indicator you’re on the right track.
Don’t wait until it’s too late
Programs don’t operate themselves. And if you’re only tracking lagging indicators like sales, you’re working in the dark. Planning, tracking and managing leading indicators helps you avoid unpleasant surprises and keeps your program on the path to success.
Ric Neeley is a marketing director with Hinda. For nearly 30 years, he has been helping clients meet their goals by engaging the people most important to them. He specializes in sales and channel strategies, and has worked with a wide range of industries including automotive, technology, construction, financial services, pharmaceutical, technology and telecommunications. You may reach him by emailing rneeley@hinda.com.
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