Sales Metrics: What To Do and Measure?
One way to look at the performance of sales personnel particularly those on the road is to establish a series of metrics that give the manager a good idea of what and how they are doing BEFORE the results come in. Typically a sales manager on seeing below target results will exhort his teams to ‘get out there and redouble your efforts’ as if doing more of the same thing will improve results.
Typically the metrics for sales people involve three main areas:
The quality of what they are doing.
This comes down to their skill levels and understanding of what is expected of them. Have the team been adequately trained and are they putting into practice regularly what they have been taught?
The efforts they put in.
This is the more traditional measurement of the number of sales visits they make but should also include areas such as numbers of telephone calls, emails, and mailshots and many more
Who their customers and prospects are.
Measurement of the types of prospects and customers is essential so that considerable effort is not expended on the low profitability customers or those whose long term potential to the company is small. Segmenting by size of company and potential and then providing targets for sales staff will help achieve these goals.
Other metrics to consider are the number of new customers required each period to achieve goals (consideration of average size and average order come in here.) We have already indicated that the profitability of each customer and the potential for each prospect is also a metric that can be used.
Are the team selling the right mix of products or services in order to meet the goals of the company? Some may be more profitable than others or more difficult to obtain stretching lead times which in turn may result in a poorer performance.
By setting a series of goals and devising a range of metrics or KPIs the future performance of a sales person can be accurately predicted. This feed forward approach will allow the manager to make corrections before the rot sets in and declining sales results appear 6 months or more down the line.
Bob Francis is an experienced business consultant spending most of his time helping clients with sales and marketing issues. His expertise lies primarily in strategy, sales and marketing and is a Fellow of the Chartered Institute of Marketing. He is an expert at sales performance measurement and improvement.
To understand your sales team’s performance and get on the road to better results contact him at bob@abio.ltd.uk and ask about a Sales Audit (TM) for your team.
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