This is the first in a four-part series about activity-based selling. Check back in a week to read part two.
The old school sales manager is extinct. Or he will be soon.
Why? Because that guy only managed his team around results – revenue, wins, deals closed, new logos, whichever term your sales team prefers. Research tells us that business results like these can’t be managed. They are out of your control. And trying to manage a sales team around something you can’t control is not only illogical; it’s a fast track to failure.
That’s not to say that revenue isn’t important. Revenue is the main measure for a company’s overall well-being.
“Public companies are measured by it, CEOs’ egos are fueled by it, chief sales officers are fired because of it, field salespeople are motivated by it and incentive compensation is driven by it,” writes Vantage Point Performance Partner Jason Jordan in Cracking the Sales Management Code.
But revenue is a result of sales activities, and the modern sales leader understands the cause-and-effect relationship between the two. To achieve specific business results, you must perform certain activities.
This understanding has led to the rise of activity-based selling: managing sales reps around the activities that lead to sales.
This sales management strategy is effective for a number of reasons: Salespeople make better decisions on what activities to spend their time on; sales managers know what to manage; and you can actually manage sales performance.
But switching to an activity-based selling approach requires a few procedures, which we’ll outline in this series. The first is to define the key metrics for your organization.
Step 1 for Activity-Based Selling: Defining Key Sales Metrics
1. Define your sales organization structure.
The activities you manage are specific to sales roles, so you’ll need to define how and where each rep fits into the sales process.
Start by examining the makeup of your sales organization. Do you have multiple sales teams? How are they grouped? Some companies have sales development reps, account executives and customer success managers. Others have SMB, mid-market and enterprise sales reps. If your team is national, reps are probably divided by region. Map out how your sales organization looks from the front-line sales rep to the VP of sales.
2. Develop your own hypothesis.
What are the most important sales activities for your team? These will be specific actions that move prospects through the sales process.
Sales development leaders might consider calls, emails and meetings scheduled the most important behaviors for their teams. But key selling activities for account executives could be demos completed, ROI discussions and proposals sent.
Come up with a hypothesis of what you consider the critical activities for your rep.
3. Interview salespeople and managers.
Select a few top-performing sales reps and ask them what activities they think are most important to closing deals. Take notes. Often, the most successful sales reps don’t even know what behaviors make them so successful; they just do them.
Talk with a few middle- and bottom-performing reps, too. Ask them the same question, but also which sales activities they see top performers doing that they think make them successful. Again, take notes.
Finally, interview your sales managers. Find out which activities they see successful reps performing and which activities they think the rest of the sales team should perform. And — you guessed it — take notes.
Compare the data from your interviews to your hypothesis. Do you notice alignment between what you, your managers and your reps think are the most important activities? If so, great. If not, don’t panic – this just means you’ll have to spend a little more time explaining why you feel those activities are most important.
Taking all the information you’ve collected into account, select 3-4 key performance indicators (KPIs) for each sales team. Many sales leaders opt for three leading indicators and one lagging indicator.
4. Assess CRM readiness.
The final step in defining your key sales metrics is to determine how you will track them. If you have a CRM system like Salesforce, make sure reps can easily log the activities you’ve selected to measure.
You’ll need to track individual sales rep activity, as well as overall team performance, to make sure you stay on pace to hit sales goals. Sales dashboards alone won’t work for this. The information needs to be in real time so you can monitor and course-correct. Consider sales activity management software to automate this.
Defining key sales metrics is only the first step in your journey to an activity-based selling strategy. Visit our blog again next Monday to find part two of our series, where you’ll learn how to align your sales organization around metrics.