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Are You Measuring The Sales Metrics That Matter?

August 16, 2011 by Carlos Quintero

LEADERSHIP SERIES: Research suggests that Sales Leadership is the difference maker between good performance and superior performance. And how sales leaders embrace five essential roles is critical to the success of their teams. We hope you find this series of short informal discussions around sales leadership useful and thought-provoking.

Are You Measuring The Sales Metrics That Matter?

If there is one thing that just about every sales manager on the planet can relate to, it’s the feeling of getting up close and personal with a lot of numbers. Regardless of whether your department is big or small, whether you sell shoes or superconductors, we would be willing to wager that when upper management wants to talk to you, it’s in reference to new orders, revenue streams, profit margins, and other pertinent business figures… and that you pass similar measurements on to your sales team.

In other words, you judge them by how much they are selling. For many managers, so long as they’re hitting the figures, life is good; if they lag behind for too long, things get difficult. But couldn’t there be a better way to keep your eye on the bottom line?

As it turns out, there is. Instead of simply measuring your team’s sales metrics, like a sales manager would, try thinking like a sales leader and take a look at the metrics that matter.

The first step is to break old of the tunnel vision most managers have on sales and revenue. Granted, these are important – extremely important, in fact, since they keep the company in business – but trust us when we say that, if you keep an eye on some other critical figures, these will take themselves. That’s because the numbers we’re talking about are the metrics that come first.

And what are these? It depends a bit on your selling situation, but typically they are the number of “prospecting calls made,” “proposals submitted,” or “demos performed.” By focusing your attention on the amount of activity your salespeople are creating, rather than the results that are generated from that, you can get a better feel for what they have in their sales pipeline, and what kinds of new orders and accounts are going to be showing up in the near future.

At the same time, this approach allows you to better diagnose problems as they creep up. If one of your producers is generating lots of proposals, but few new orders, then you can more easily focus on where their potential weakness lies – something you wouldn’t have gotten from raw sales figures.

The second step to watching the metrics that matter is in treating your individual salespeople like… well, individual salespeople. Because each member of your team has his or her own strengths and weaknesses, and his or her own territory, it doesn’t make sense to measure them all the same way. Instead, you’ll want to focus on what each one of them is trying to achieve, and then make sure you’re tracking what they’ll have to get done along the way.

Sales management, to a certain degree, is always going to be at least a little bit about keeping track of the numbers. That doesn’t mean you have to only watch new accounts and revenue, though – by watching the metrics that matter week by week, you give your team a much better chance of hitting the ones you need to see at the end of every year.

© Sales Effectiveness, Inc. – All rights reserved


 

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