When we ask sales executives how they measure sales performance, 60% of them tell us that they don’t have a performance measurement system in place. Of the remaining 40%, a majority depend solely on a single lagging indicator: performance against quota/budget. If other metrics are even mentioned, they are typically the size/trending of their pipeline, the number of sales calls per week, or the percentage of proposals they submit that result in a win.
When you consider a typical enterprise, you’ll find that almost every department has a set of processes or procedures and metrics by which performance is measured: finance (GAAP), manufacturing (ISO 9000 and/or Six Sigma), customer service (customer satisfaction, such as Net Promoter), HR (employee retention, 360 degree surveys), logistics (throughput, on-time delivery), Information Technology (TCO: Total Cost of Ownership), and even marketing (direct marketing campaign conversion rates, for example). In most companies, the last bastion to institutionalize formal processes and comprehensive and accurate measurement is sales.
Why is Sales Last When It Comes to Measurement?
The root cause of the sales function being last in line is related to the personalities, traits, and established behavior patterns of many (often very smart, but right-brained) sales executives who came up through the ranks of sales themselves. Back when they were salesreps, process and measurement was uncommon in sales. It was much less of a critical component for success than it is today. At that same time, the engineers, accountants, and factory workers in that same company were driven by process—the output of their work carefully monitored, measured, and adjusted along the way by (often left-brained) management.
We know that relatively few companies measure the impact of sales training. Among the reasons they tell us are:
We know that most of these are excuses and companies that wish to measure the return on their sales training spend can do it relatively easily and inexpensively.
What’s the answer?
As an integral component of your sales methodology, monitor five to eight carefully selected leading and lagging indicators to measure ongoing productivity—not activity—of every member of your sales team. Based upon those behavioral and performance indicators, you can make adjustments to your processes when necessary, redeploying resources, responding quickly to new competitive threats, and providing the field with the right messages, tools, strategies and tactics—before it’s too late.
Here are a few of the metrics companies employing performance measurement best-practices are using to gain transparency into what is really coming down the pipeline:
One you have your sales process in place, especially the steps, actions, tasks, qualification criteria, and the metrics (like the examples above), you can automate this with a strong Sales 2.0 Analytics solution.
Installing, then monitoring leading and lagging sales performance indicators and making appropriate real time adjustments in approach, process, and actions is a critical component of stellar sales performance. As Peter Drucker said, “You can’t improve what you don’t measure.”
ESR’s Leadership Role in Methods for Measuring the Impact of Sales Training
In 2007, ESR began studying the discipline of measuring the impact of sales training. We published our first Guide to Measuring Sales Performance back then, and audited the sales training impact measurement programs and systems of a number of sales training companies, including Wilson Learning, The Complex Sale, Sales Performance International, and Performance Methods, Inc.
We learned a lot since then and have shared our knowledge with numbers of other sales training providers who have built their own measurement systems.
I’ve gathered four experts in the area of sales training measurement for a panel. They will be sharing with you what works and what doesn’t with respect to measuring the impact of sales training. Why don’t you join us?
Complimentary Webinar: Measuring the Impact of Sales Training:
How to Document the Quantitative Impact
Wednesday, January 11, 2012 – 12:00 ET / 9:00 PT / 1800 GMT
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