306 sales management metrics.
That’s the number of data points “Cracking the Sales Management Code” authors Jason Jordan and Michelle Vazzana studied when they partnered with the Sales Education Foundation to survey its corporate constituents. The researchers asked sales leaders to provide the most important key performance indicators they used to drive performance in their sales teams. What Jason and Michelle discovered was chaos.
“One company reported 14 different categories of sales metrics, often with only two metrics per category. Another listed 16 different measurements in no particular order whatsoever,” the authors explain. “One global vice president of sales claimed that he needed only three key numbers to effectively manage his entire sales force. And some responded with terms so vague, it was impossible to immediately discern what they were truly trying to measure.”
Jason and Michelle found that 83 percent of sales metrics used by sales leaders are not manageable. The criterion for a metric being manageable was that a sales leader could exert direct control over that number, through his own actions or the actions of his sales team, without needing further consent or decisions from outside parties.
The authors define the other 17 percent of sales management metrics as sales activities: the day-to-day actions of salespeople like calls, meetings and demos. Unlike the majority of metrics used by sales management, sales activities can be controlled.
“The actions of our salespeople and managers influence the other 80 percent of the metrics on the wall, but those metrics are out of our direct control,” the authors write. “They are merely the outcomes of all our doings.”
This cause-and-effect relationship between sales activities and business results is a powerful insight. And the authors share many more throughout their book. Here are 10 of their most thought-provoking ideas for sales management.
10 ‘Cracking the Sales Management Code’ quotes for sales leaders
- “[CRM] has given us the power to see what the sales force is doing, but it didn’t come with instructions for what to do with that newfound visibility. We can get plenty of data from that magnificent reporting machine, but we haven’t been told how to use it.”
- “In the history of sales management, there is unquestionably an alpha metric – the very first measure by which a sales force was ever judged: Revenue. Even today, it is an obsession for almost every organization with which we work. 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.”
- “At the highest level, business result metrics help us assess the overall health of our company. Are we growing or shrinking? Are we making a profit? Are we winning against the competition? Are our customers satisfied?”
- “While some people will struggle to abandon the notion of ‘managing’ revenue, the truth is that we have virtually no direct control over revenue or any other business result. Yes, there are things we can do to influence these outcomes – many things in fact. But we can no more command the numbers to change on our corporate report card than we can command the letters to change on the report cards of our children. All we can do is manage what is in our direct control and expect the desired outcomes to follow.”
- “If no more direction is given to the field than to achieve a business result, then management has only itself to blame when it cannot exert control over its sales force’s performance. Sales managers and reps are then left to chart their own paths to the top of the metrics hierarchy, and it is certain that they will do it in as many different ways as there are people in the sales force.”
- “Leadership spends lavishly to train its sellers yet ceases to invest in their ongoing development once the sellers are promoted into management. Look at any sales organization, and there is most certainly a budget to train its salespeople. However, with almost equal certainty, there will be no budget to train its sales managers.”
- “Salespeople may be the foot soldiers out fighting the war, but sales managers are the ones equipping them for battle and giving them their marching orders. And an unprepared soldier doesn’t stand a fighting chance against a worthy adversary.”
- “Without sales managers who can effectively influence and direct field salespeople, the generals in the war room have little or no control over the execution of their battle plans.”
- “The sales management code starts to crack when leadership provides its sales force with a clear path from the bottom to the top. It cracks when everyone in the field understands what they must do at the sales activity level to achieve specific sales objectives and the consequent business results.”
- “We would contend that collecting activity-level metrics is not old-school whatsoever – we think it is new school. And we would argue that tracking salespeople’s activities won’t lead to micromanagement – it will lead to proactive management. Technology has enabled us to collect these metrics in less intrusive ways, and our new sales management framework will enable us to use the data in a more sophisticated manner.”
To learn more about how leaders in sales management use metrics, grab a copy of the first-ever sales KPI report.
