By Duane Cashin, owner of Cashin Sales
Regardless of the number of sales representatives in your company, it is crucial to establish a systematic approach that allows you to monitor, measure, report, and evaluate their performance on a regular basis.
It was a game changer for me when I was a sales manager, and I realized that you can’t manage sales. Sales is a “lagging metric.” Sales “closed” reflect the results of past “sales activity” rather than current or future sales performance.
The only things you can manage in the sales process are the activities that happen before a sale is closed such as prospecting for new business, following up on unsold estimates, contacting past customers and attempting to win them back, doing a killer front end discovery to identify buying motivation, presenting value rather than doing a feature dump and uncovering & handling objections. These are examples of leading sales activities that when focused on, and strengthened, are guaranteed to move the needle on sales performance.
Before we look at some examples of leading metrics, otherwise known as KPIs (Key Performance Indicators) I want to make a very important point.
There’s only one reason we track and review key performance indicators in the great game of selling, and that’s to gain insight into the “story” that the numbers tell so we can take the appropriate action to increase profitable sales. It’s very important that you avoid falling into the “inspection trap.” The inspection trap is where a manager simply reviews the numbers and tells the rep either: “Your numbers are up and you’re doing great,” or “Your numbers are down, and you need to pick it up.” Unfortunately, this approach is very common and provides virtually no value to a salesperson who needs to understand how they can do even better or what specifically they can do to get back on track.
Let’s look at some examples of leading metrics and the story that they tell. For this example, let’s say you’re managing an outside commercial landscape sales professional. Several KPIs you would want to track would be the number of 1st appointments they schedule weekly, the number of 1st appointments necessary to uncover a “qualified” sales opportunity and the number of proposals required to close one sale. And of course, for any type of rep, inside, outside, B2B or B2C you want to track their closing ratio. Once you figure out the activity metrics that are needed to accomplish your revenue & profit objectives, you’re then able to assign activity requirements and goals to each salesperson on your team and track them weekly.
So, let’s say that this commercial sales rep is getting a healthy number of 1st appointments per week, but their closing ratio is low. What could be the problem? Well, maybe they’re not meeting with decision-makers or even solid influencers. Maybe they’re getting in the door at a very low level. Or perhaps they’re meeting with decision-makers but executing a weak discovery and not getting the answers they need to understand the decision-makers’ motivation or decision-making criteria.
And, of course, without a strong discovery, the rep’s presentation would not hit the necessary targets to establish the level of credibility or trust necessary to beat out the competition. So, now you’re reading the metrics to narrow down what the specific problem could be and when you dig a bit deeper you will uncover exactly where in the sales process the rep is failing. This enables you to design a training & coaching plan to help the rep improve. Effectively reading the numbers and the “story” they tell will lead you to uncover the root cause of the problem. This approach is targeted and specific.
Now let’s look at an inside sales rep who’s selling to consumers. Let’s say this rep has a delightful personality, is very knowledgeable about your services and sets the proper expectations when the sale is made. But their closing ratio is also low.
You’re looking at this low closing ratio, you love this rep’s personality, you know customers love them too and you’re scratching your head trying to figure out exactly what’s going on. Well, read the story.
Dig deeper and go beyond simply looking at the sales results and uncover where in the sales process this rep could be missing the mark. Then, through a process of elimination, narrow down the possibilities until you figure out specifically where in their sales process they’re falling down.
Often with a super nice rep, who understands the products and services inside and out, it’s not uncommon for them to be taking a “customer service” approach to selling and their unable to handle objections. When they hear: “I need to discuss it with my spouse” or “I want to think it over” they simply respond by saying: “OK, I’ll email the estimate over to you. I’ve enjoyed talking with you and if there’s anything I can do please give me a call; I would love to help you.”
In this example, the sales rep is executing many aspects of the sales process effectively, but their low closing ratio indicates a need for you to investigate the specific sales activities that contribute to closing, such as presenting, handling objections, and asking for the order. This example is not about how many calls they’re taking or how many outbound calls they’re making. It’s about a selling skill set that needs to be strengthened. But, the point remains, look beyond the simple fact their closing ratio is low and look at the other key elements in the “story” that contribute to effective closing.
So, let’s wrap it up! Here are the steps you can take to establish your KPIs and use them to understand the story they tell. First, figure out exactly what the sales activities are that move the needle on profitable sales in your business. Then assign the reps activity objectives that they will be expected to achieve. Show the reps the process you went through to identify the objectives/KPIs, such as how many appointments are needed to get one qualified proposal. And how many calls an inside rep needs to take to close one sale. And the importance of asking great questions to uncover motivation and overcoming objections to close the sale.
Show the reps the business reasoning behind the KPIs you are asking them to hit. Helping them understand why they are being asked to do what you require will go a long way in helping them accept and embrace the challenge.
Once the reps have their objectives then figure out how you will observe their performance, track, and report the results. Then review each rep’s performance weekly and look beyond the obvious to understand the story the numbers tell.
Now you’re managing what you can manage, gaining insight into the upfront sales activities that generate results and you’re creating a culture of accountability and performance. That’s a great story to tell!
