Could Sales Results Just Be a Distraction?

As an executive vice president for sales, I spent countless hours reviewing, examining and analyzing the sales forecast for my company. And I required the managers who reported to me to do the same. Sound familiar?

Conversations between sales managers and sales staff frequently focus only on numbers: Did you make them? Will you fall short? How much do you think you can sell in the next quarter? The result is spending an inordinate amount of time on inspecting and reporting numbers that are frankly beyond the control of any sales leader.

While it is important to forecast performance as accurately as possible, doing so rarely, if ever, helps improve sales. In fact, every minute spent reporting or inspecting results is a minute lost trying to improve them. In a sales culture, the right practice is to create some equilibrium between analyzing results (which can’t be managed) and coaching optimal activities and behaviors (which can be managed to great benefit).

It’s the difference between inspecting the results that have already occurred and actively improving the results.

What You Can Change

In a recent study, the Sales Education Foundation and Vantage Point Performance identified 306 different metrics that sales leaders use to manage their business. These metrics fell into three broad categories: sales activities, such as the number of accounts assigned per rep, the number of calls made per rep and the percentage of account plans completed; sales objectives, such as the number of new customers acquired, the percentage share of customers’ wallet and the percentage of customers retained; and the subsequent business results, including revenue growth, gross profit and customer satisfaction.

Even though managers were spending more than 80% of their time focused, as I had been, on the second two categories, the report found that sales management could affect only the first: sales activities. The other two can’t be directly managed since they’re outcomes—not the process by which the outcomes are gained.

So which sales activities should sales leaders manage? In their book “Cracking the Sales Management Code,” Jason Jordan and Michelle Vazzana break sales activities into four distinct categories: call management, opportunity management, account management and territory management. Different organizations might need to focus on one or another of these more intently, depending on both the nature of what they sell and their organizational weaknesses. Depending on the needs of your agency, here’s how to map the various sales activity metrics to the challenge at hand:

CALL MANAGEMENT. Sales leaders who need to improve call management—the quality of the interaction between individual producers and prospects or clients—should focus on such metrics as call plans completed, coaching calls conducted or even the number of calls critiqued and reviewed. Coaching in the area of call management is particularly valuable when the producer need make only a small number of calls to greatly affect the outcome of a given deal. In selling professional services, for example, the ability to create value in one or two interactions with a senior executive often makes or breaks the deal.

OPPORTUNITY MANAGEMENT. Sales leaders who need to improve opportunity management—the ability to vet, pursue and close a multistage sale—should focus on the number of opportunity plans (outlining the actions required to move through the stages of the sales cycle) completed. Another valuable metric in this area is the percentage of early-stage opportunities qualified—fully vetted to confirm you are really reaching the right customers, that these customers have the potential to generate a reasonable amount of business for the effort it will take to gain it and that they are in fact willing to spend the money to purchase your offering. Identifying bad deals and discarding them early may be the simplest way to increase your odds of success. Most companies I have worked with don’t want their sales teams pursuing every opportunity possible. Instead, they want to put their maximum effort on the opportunities that match some kind of ideal client profile.

ACCOUNT MANAGEMENT. Sales leaders who need to improve account management—the ability to enhance the long-term value of a single client—should focus on working with producers to develop and adjust account plans so they define an overall strategy for the customer. This is also when it would be fruitful for you to spend time creating and monitoring standards for important client-facing activities like establishing peer meetings between your organization and the customer (by, for instance, arranging meetings between your CEO and the client’s CEO) or inviting the customer to sit on your organization’s advisory council to provide feedback to your business. Account management metrics are vital when a substantial portion of your organization’s revenue is concentrated in small number of key customers.

TERRITORY MANAGEMENT. Sales leaders that need to concentrate on territory management—allocating producers’ time among all the customers in a given territory—should focus on metrics like the number of customers per rep, number of sales calls made and even sales calls to different types of customers. By managing the process of selecting, prioritizing and meeting with target customers, you can maximize the use of your producers’ most precious resource: time.

Create a Sales Culture

A high-performance sales organization understands the sales process based on the expectations of the agency and clients at each stage of their decision-making process. This enables producers to replicate activities that portend success and address predictable failure points.

In one high-tech company I worked with, we identified several pivot points in successful sales cycles that most often resulted in acquiring business. Isolating those common variables helped the company concentrate resources and focus on key milestones at each stage of their sales cycle—enabling organizations to decode and replicate a vital part of the success of their top performers and providing a roadmap for rapidly getting new hires up to speed and productive.

Should sales incentives and rewards be part of that strategy? In great sales cultures, while compensation and incentives must be available for high performance, they are simply part of a good performance management system. But compensation won’t create the culture.

Selling is one of those professions in which few people—if any—actually go to school to get a degree. As a result, there isn’t really a blueprint or defined standard to follow like GAAP rules for accounting—professional selling is learned almost entirely on the job.

That means successful managers coach their sellers on process, skills and approaches to increase effectiveness. They understand where limited coaching time will have the greatest impact and consider that in planning. They avoid the pitfalls of doing the selling for their reps and taking on the role of discount approver—or worse, closer. They observe sales calls and provide feedback, helping plan account strategies. In this way, they are coaching sales management to be more effective—not just double- and triple-checking forecasts.

Many sales leaders inadvertently micromanage through revenue or profit numbers—but it’s counterproductive. Provide your sales team with a new context. By closely managing the things you can control, you will give your agency the best chance for success.