As a sales manager, you are responsible for a lot of metrics—really important metrics, in fact, including revenue growth, customer retention, product mix, and dozens of other performance metrics. But these metrics are more than numbers to you and your sales force because they define your force’s performance. Whether you and your sales force succeed is directly tied to these metrics, but how many of these metrics are within your direct control as a sales manager? In other words, how many of the metrics that you live and die by are actually manageable? As some new research reveals, some sales metrics may be more out of your control than you might think.
Vantage Point Performance and the Sales Education Foundation conducted a joint research project to identify how top companies measure and manage sales force performance. We identified 306 metrics that were considered to be key to effective sales management for dozens of leading sales forces. As we sorted through the massive amount of sales management reports, we discovered something enlightening— some sales metrics are more “manageable” than others. In fact, we discovered three distinct types of sales metrics with varying levels of manageability.
All companies measure what we call Business Results. Business Results are metrics such as revenue growth and market share that represent the culmination of the entire organization’s efforts. Twenty-four percent of the 306 metrics fall into this category. However, as much as we talk about “managing revenue” and “managing market share,” these metrics are not directly manageable. In reality, these metrics are lagging indicators that reveal the impact of what a sales force has done in the past — not what you can control in the present.
The second type of sales metric falls into the category of Sales Objectives. Sales Objectives are specific targets that an organization sets for its sales force, such as winning new customers or selling certain product lines. Sales Objectives make up 55% of the 306 metrics identified. Although Sales Objectives are not directly controllable since you can’t force a prospect to buy from you, you can heavily influence the achievement of Sales Objectives by managing the third and most highly manageable category of metrics — Sales Activities.
During our survey of sales management reports, we discovered that some sales metrics are manageable. We dubbed these metrics “Sales Activities,” and they comprise 17% of the 306 metrics identified. Sales Activities include the everyday tasks of a sales force that can be controlled by sales management. Sales Activities are the driving force behind sales force performance because they are taking place in the present, while you still have an opportunity to influence the outcome. For instance, you can direct your salespeople to complete a certain number of account plans for major customers or you can allocate the number of dollars spent on sales rep training. Doing the right Sales Activities today leads to your Sales Objectives and Business Results tomorrow. By focusing on the nature, quality, and quantity of your team’s Sales Activities, you can truly begin to manage sales force performance.
Remember that visibility into an action does not equate to control over it. As a sales manager, you don’t have control over everything, but you do have control over what ultimately drives sales force performance—Sales Activities. If you want to achieve specific Business Results, concentrate on managing the Sales Activities that reach key Sales Objectives, which then lead to the desired Business Results.
About the Author
Jason Jordan is a founding partner of Vantage Point Performance, the leading sales management training and development firm, and co-author of Cracking the Sales Management Code. Jordan is a recognized thought leader in the domain of business-to-business sales and teaches sales and sales management at the University of Virginia’s Darden Graduate School of Business. For more information, visit www.vantagepointperformance.com.