Until recently, there were 180 sales metrics being measured at United Parcel Service.
That’s according to Carl Strenger. He spent more than three decades managing the enterprise-wide sales operations at UPS. Before he retired about a year ago, Carl served as the VP of Sales Operations and Compensation.
“That ended up being the discipline for sales,” Carl says. “And really over time, we realized that didn’t work.”
If the idea of 180 sales metrics causes you distress, don’t worry. Carl and his team were able to take that down to just 7-8 metrics per sales resource.
“You have to understand the types of metrics you’re putting into the behaviors you’re driving,” he says.
15 Sales Metric Insights
The abundance of sales data.
In the presentation, Carl addresses the issue of sales leaders who hide behind metrics and reports. Because they have so much data, people automatically assume the leader knows everything that’s going on and is doing the right things with that information — something Carl says is absolutely not true.
- “If anyone believes that you get what you measure and you have to measure everything you want, I would challenge that. It’s too many things.”
- “The more information you have in front of you, it really increases the poverty of attention.”
- “What happens a lot is that when times get tough or you’re below on something (profit, plan, product, promotion), all of a sudden, you start measuring more things. That’s a problem because that simply takes the focus off the other things you were doing and replaces it with new things that add to the confusion.”
- “A lot of it is thinking ‘Do more. Let’s do more.’ Well, the understanding needs to be that when [you] ask someone to do something different or more or something, they’re going to do less of something else. And sometimes the sacrifice is not worth the change.”
- “When you start something and you want to end it or it doesn’t work [like measuring a metric or sales contest], stop it. Say you’re going to stop it and the reasons why.”
The role of sales analytics.
In every company, Carl says there should be a group or person that manages the sales analytics: mainly, selecting the right metrics and reporting them correctly.
- “You can have a sales analytics group that does a lot of data, a lot of reporting, but what’s important is that they can drive change by providing insight to senior management.”
- “Sales analytics should reside in sales [not marketing]. In a small company, that might be ok. But in medium to large companies, it’s not.”
The sales metric options.
What helped Carl’s team narrow down their metrics was developing a categorization strategy for the different types of metrics. They sorted them into three categories:
- “[Business Results] are the high, top-line results. These are outcomes like revenue, profit, number of units, customer retention, growth. These are numbers that are important to sales, but can’t be affected directly.”
- “[Sales Objectives] really can be influenced only by managing the preceding activities. These metrics are contract growth, hit rate, customer satisfaction with the salesperson. Things that you can’t directly control but you do have a connection where the activity can actually drive that number and you can see the change.”
- “[Sales Activities] are things that can be proactively managed both by the salesperson or the manager, depending on the metric. Things like staffing, calls per day, number of contracts signed, quarterly reviews.”
Defining your team’s sales activity metrics starts with identifying the best sales behaviors that drive results within your company, Carl says.
- “There is someone, or a group of people, demonstrating the best [sales behaviors] in your company. So you have to find those people first. And that’s not just by looking at topline revenue. You have to look at a lot of data, and you also have to be subjective and ask sales managers, salespeople, maybe even customers. But you’ll find out by searching and asking who your good salespeople are.”
- “Once you find those salespeople, then you start digging through their data — look through all the data and metrics possible — and try to find out what metrics are trending positive or better than everybody else. And then you have to look at those metrics and figure out what’s signal vs. noise.”
The design and rollout.
He also discussed how often sales leaders should report results and how to deploy sales metrics strategies:
- “How often should your report? Monthly? Weekly? Daily? Watch out for daily, sometimes you don’t need information every day. It’s actually overload. Watch out for quarterly. Sales doesn’t work in most cases in a quarterly way, but everybody else does and they all want you to turn into a quarterly reporting machine.”
- “Pick the [reporting] frequency that is best for the sales force for driving the right behaviors.”
- “What also helps is if you connect a metrics change to some type of rollout: You’re putting in a new CRM system, new training, etc. This won’t help the metrics that much, but I can tell you it will help the rollout of the other thing tremendously. It’s a good point to rally around.”
If you’re interested in hearing more, you can check out Carl’s whole presentation here. You can get more sales metrics insights by grabbing a copy of this free KPI report: