Can sales performance really be managed?
According to research: Yes, to a certain degree.
“Managing performance” means the performance of sales reps can be directly influenced by doing something differently or asking reps to do something differently. You can’t manage sales objectives like deal size or quota attainment. But you can manage sales activities like targeting enterprise accounts or having face-to-face meetings.
This methodology for running your sales team is called activity based selling, where sales leaders manage the activities (instead of results).
Sales is a cascading chain of controllable behaviors that lead to a defined outcome. That means there is a direct cause-and-effect relationship between the activities your reps perform on a daily basis and the business outcomes you see at the end of every quarter.
Many modern sales leaders have adopted this methodology, but the switch doesn’t happen overnight. There are a few things you need to understand first.
Activity Based Selling: Before You Get Started
Sales metrics must be clearly defined.
To manage specific selling behaviors, start by defining them.
Ask yourself and your team: What are the most important activities that lead to sales in our organization? The answer will be unique to your sales team’s vertical and structure. For example, sales teams in advertising or marketing companies might find that their key selling activities include things like calls, emails sent, market reports and assessments completed. But teams working in the finance industry might choose behaviors like calls, meetings, credit pulls and distinct loans.
Get granular with definitions. Rep should understand that a call is a live conversation with the prospect (not a call attempt or voicemail).
Once you define your key selling activities, make them part of your operating metrics – the numbers you use to measure your team’s performance. A best practice for metrics is to have 3 leading indicators (activities) and 1 lagging indicator (results) as your key focus.
Sales reps must be bought in.
Don’t just define your sales metrics and then forget about them. Make these metrics the numbers your sales team lives and breathes by.
Create buy-in with sales reps by reviewing the metrics and sharing why these are important to managing your business. Develop personalized scorecards for reps and managers so they can track individual activity. Get a sales activity management system.
Display operating metrics publicly – along with performance rankings for sales reps – to inspire collaboration or competition. Talk about your metrics. Every day. Discuss your daily, weekly and monthly progress to goal with reps and executives.
Sales leaders must monitor and course correct.
If you expect reps to perform these activities daily, then you must monitor them daily.
Dashboards and reports won’t be enough. This data needs to be real time so you can course-correct when pacing slows. Use contests and incentives to boost metrics when they start to fall behind. Recognize achievements as they happen to motivate future success.
Use this data to manage on an individual level, too. Run consistent one-on-one and coaching sessions with each rep’s activity data as your guide. Use data to uncover best practices for your entire team and endorse the behaviors of high-performing sales reps.
These three steps merely lay the foundation for activity based selling. To help you get started on defining your sales metrics, check out the very first Sales KPI Report.