Are you Measuring Your Sales Team’s Performance Wrong?
“Pivot” and “Agility” seemed to be the most popular words of 2020. Obviously, there was a good reason for this: when situations change so drastically, the only way to survive is to adapt. We saw shakeups in nearly every industry and job role as businesses tried to simply survive, and no one knew for sure what the best path forward would be.
When the pandemic hit, and it became clear that this would not be a short-term arrangement, leaders were forced to adjust their initial goals to accommodate the loss of revenue from shutdowns. In fact, as little as 51% of firms expected to even meet the original sales goals they had for the year, down from 87% pre-pandemic.
The Study
Along with Sales Management Association, we set out to study how practices in sales performance management were affected by the pandemic. In particular, we looked at the ways organizations measured job performance for the standard job roles (Sales Development Rep, Field Sales Rep, Inside Sales Rep, Account Executive/Manager, and Strategic Accounts Manager). The insights from this survey are critical for analyzing and course-correcting any adaptations made when confronting a crisis.
What we found was surprising: the sales performance measures with the greatest increase in focus since the pandemic, are least likely to be tracked effectively.
Nearly half of organizations don’t actually have effective measurement capabilities to support the shifts made due to the pandemic. So for those worrying that they aren’t tracking the activities and performance of their sales team now that you aren’t in the office together, you’re not alone.
Below are some of the findings from the report Performance Measurement Trends in Sales Organizations.
What Metrics Are Sales Organizations Tracking?
To begin, we outlined the metrics that were used to measure performance, then analyzed how the importance of those metrics changes after the onset of COVID-19. If you’re unsure what you should be measuring, here is a list of the most frequently tracked metrics at other sales organizations:
- Revenue
- Pipeline
- Retention
- Salesperson Activity
- Profit
- Salesperson Learning
- Customer Adoption, Engagement
- Customer Satisfaction
- Implementation
Metrics’ Increase in Importance and Tracking Effectiveness
Unsurprisingly, revenue is the most emphasized performance metric across all sales roles. However, its level of importance was largely unaffected by the pandemic. Salesperson Activities, instead, is the metric that frequently had one of the larger increases in importance, placing in the top 5 biggest increases across all sales roles.
As for how effectively these top metrics are tracked, the survey concludes that sales performance measures with the greatest increase in emphasis are also those that firms are least likely to track effectively.
One of the most important insights in this report is what performance measures had the greatest increase in focus post-pandemic, and how likely these performance metrics are to be accurately tracked.
Per this chart, only revenue and pipeline activity are (usually) accurately tracked – leaving out some of the most crucial metrics that lead to success.
Why Is This Important?
These findings are interesting, but what is their significance? The significance is that the effectiveness of tracking important metrics correlates with better performance and signals better resilience and adaptivity in coping with challenges like the pandemic.
Having a broad-based performance measurement capability gives organizations a sharper insight into performance, which offers a powerful measure of immune response to a crisis like COVID-19.
Sales organizations must take a critical look at the breadth and accuracy of their performance measurement capabilities and should be investing in new capabilities in order to build their resiliency and adaptivity.
The metrics revealed to be the highest priority are salesperson activities, customer satisfaction, retention, and salesperson learning. This is represented in the graph below.
The report concludes:
“Performance measurement effectiveness positively correlates with higher firm sales performance, and appears to be a contributor to firm resiliency and adaptiveness in coping with the pandemic’s management challenges.”
If you would like a deeper look into the results of this study, you can download the report here. The findings listed above are only a small sample of the analyses we did.
What Now?
You too might be tracking your sales team’s performance wrong like a large portion of firms we studied. If you are struggling with accurately measuring your sales team’s performance and tracking activities, we encourage you to ask for help.
This study shows that you are not the only one having trouble. There are solutions out there that will automatically keep track of performance metrics with absolute accuracy – LevelEleven is one of them.
As we start moving toward a more normal world, it will be critical to have the right solutions in place to accurately measure critical performance metrics. Having a solid foundation will keep you and your team on track to meet (and even exceed) your sales goals.
There is still time to make adjustments to your sales performance measurement strategy, giving you the opportunity to get on track for the rest of this year. Don’t let 2021 sneak up on you like 2020 did…now is the time to impact the outcome.
For more insight into our report, Performance Measurement Trends in Sales Organizations, check out our next blog on the importance of learning in performance measurement.
