Loading... (0%)

Measurements and Morale: Is Your Sales Process De-motivating?

03 June 2009

Thanks to Brent Holloway, Sales Manager at Verint Systems and Co-Author of Sales 2.0: Improve Business Results Using Innovative Sales Practices and Technology for this post.

A friend of mine who works for a leading Software-as-a-Service company told me that he used to be measured and compensated on the number of phone calls and emails he made every week, and that each sales person’s results were posted publicly.  My friend had relatively poor numbers in terms of phone calls and emails, but he was a high performer and consistently exceeded his quota.  From his perspective the reports did little to motivate, especially since there did not appear to be a correlation between sales reps’ phone and email activities and their quarterly bookings.

There appears to be a trend – perhaps economy-related – for managers to focus not just on sales results but also on the measurement of sales reps’ activities leading to sales. The intelligence gathered through these measurements, which come from a wide range of CRM reports or other databases and business analytics systems, could help improve performance. But are all these measurements having a negative impact on sales people?

Morale is an important but difficult to quantify component of a sales team’s success. Admittedly I have not done any formal studies in this area, but I am a practicing sales manager with observations to share.

I think that measuring salespeople or the team as a whole should include both the results (I.e. actual sales, number of products sold, average sales price, well as the leading indicators that produce those results (I.e. weekly pipeline development, number of new opportunities added to the forecast, conversion rate from lead to demo, etc.)  The latter enables us to be better managers and to give targeted coaching in the areas that each salesperson needs the most.  For example, let’s assume that Karen and Joe have similar sales results over the last two quarters.  With good sales process measurements, a manager may see that Karen has a high close rate but poor pipeline growth.  Joe on the other hand may do an excellent job of adding new opportunities to his pipeline but he may be less effective in converting those opportunities.  At the end of the quarter, their results may be the same, but armed with these more detailed sales process measurements, a manager could focus more coaching time on closing with Joe and on pipeline development with Karen.  I have found not only that one-on-one coaching is an effective tool for improving performance but also a morale booster.  Reps thrive on the attention and personalized advice.

I also believe that the need to maintain good relationships with our salespeople can be at odds with a management approach with too many measurements that could make them feel like micromanaged call center agents.  To prevent this, it is important for us to measure only what really matters, and to link how these measurements can help each salesperson be more successful.

In addition to actual sales, this is what I measure for each salesperson and at the combined team level:
• weekly and quarter-to-date pipeline development measured by the number of new opportunities added
• the combined value of those new opportunities
• the total value of each salesperson’s pipeline, which includes not just the new opportunities added but also the change in value of existing opportunities

These metrics are highly correlated to sales success for a quota carrying salesperson so I share them with my sales team once a week.  This information reveals trends and a rep’s performance relative to the rest of the team.  I find that good salespeople are competitive and want to know how they are doing relative to their peers, not just in terms of the final results, but also in the key activities that lead to those results.  In this way, peer pressure can improve results and measurements become a motivational factor.

The data to perform certain types of pre-sales measurements such as pipeline development or sales process conversion rates may not be readily accessible.  Since many CRM systems show the forecast as a snapshot in time, it is difficult to measure weekly or monthly trends.  To manage this issue I developed a dashboard spreadsheet in which I copy and paste a weekly forecast report from our CRM system into the spreadsheet. It then automatically calculates and graphs, at the individual and team levels, the weekly changes in closed sales, overall pipeline changes, the number of new opportunities added, and the value of those new opportunities over the course of each quarter.  Download a copy by accessing this site’s Resources section.

What is your perspective? Do you measure your reps on activity-related measurements like numbers of phone calls and e-mails? Are sales process measurements helping or hurting your sales reps’ morale and motivation to succeed?

Anneke Seley - post author

No other information about this author.

Comments

Share your opinion by posting or replying to others comments.

Sales Skills

June 4, 2009 at 5:59 am - 6 years ago

Today there is greater effort to maximize sales, increase revenue and protect margins. The ten calls that once generated two customers have increased to twenty. Farmers must now become hunters.

When business or the economy is slow, sales management needs to focus on gaining a higher percentage of revenue from the existing opportunities. This takes a planned and precise approach to selling; an approach that must be customized for the organization and adopted by the entire sales force. New sales skills sets must be learned and reinforced, otherwise salespeople fall back on unproductive or destructive sales behavior.

I think it must first be about measuring the skill set of the sales person; the ability to utilize the critical selling skills that consistently gain commitment from customers.

For example, most salespeople do not follow a selling procedure that as a first step, establishes a Commitment Objective for every sales call. This is the number one mistake that all salespeople make. In fact, our research shows that salespeople will never reach their performance potential without a well-defined sales-call procedure they can follow and learn from. “Winging it” on sales calls has grim consequences – lost sales, extended sell cycles, margin erosion and no clear path to improvement. Bottom line: An increase in sales can be mediocre at best without following a proven sales procedure that utilize the critical sales skills that matter. Performance improves by as much as 50% when salespeople know how and when to use these critical selling skills.

Here is where Action Selling will help. Have you read the Action Selling book series? (http://bit.ly/vf7qE) If not, it will be one of the best investments you can make in your company.

Action Selling teaches how to approach every sales situation with a commitment objective, how to ask the best questions, how and when to utilize the five critical selling skills, how to protect margins, and how to consistently gain greater commitment. Action Selling is a sales process that shows salespeople how and when to use these skills within the decision-making process of the buyer. Action Selling outlines the entire sales cycle giving real sales professionals a proven procedure that works.

Salespeople should also take their free sales skills assessment to find out their strengths and areas they can improve on in utilizing these sales skills. The assessment also gives recommendations on how to improve.

To Your Success

Darren Cunningham

June 4, 2009 at 12:26 pm - 6 years ago

Great post Anneke! I think a lot of this shift to activity measurement vs. revenue attainment is based on weaker pipelines and the need to develop the front end of the funnel. Our experience is that paying on activities vs. focusing on the right activities and emphasizing results is still the right approach.

When empowered (and analytical) sales reps can actually take advantage of the right metrics to work smarter, forecast more accurately, and develop more trust with management (because pipeline and forecast reviews are based on data, not opinion).

Who knows, maybe the current economic climate will end up producing a new type of sales rep who is truly using analytics to compete and win. Of course, it starts with sales management and the right organizational culture. Then the question is – “what do I measure in the first place?”

Here are a few examples of sales rep performance metrics that we’ve seen organizations adopt that go way beyond activities (and even revenue and quota attainment).

http://www.lucidera.com/blog/index.php/2009/05/28/intelligence-rep-performance/

Post your Comment

Rules of the Blog
Do not post violating content, tags like bold, italic and underline are allowed that means HTML can be used while commenting. Lorem ipsum dolor sit amet conceur half the time you know i know what.