What is Activity Based Selling?

Activity Based Selling (ABS) is about sales management and not a sales tactic. Activity based selling means managing your team around activities ( eg: demo presentation skill, No. of demos, % of target prospect contacted)  that lead to sales rather than managing team around results ( revenue, wins , deals closed).

People practicing ABS believe that sales revenue is a result of sales activities. Revenue number can’t be managed directly  but sales activity numbers can be managed directly.

What does that mean?

Any number is manageable directly if you could directly influence the number by doing something differently.

You can ask your kid to study longer hours to improve results. Increasing the study time by 1 hr per day can improve results.

But you can’t manage results directly.

Hypothetical situation of managing results directly, could be if you could bribe the teacher to give higher score.

Similarly, you can’t manage revenue directly. You can manage it indirectly.

You can manage revenue directly only under the situation if you can bribe the customer to place the purchase order you and there is no one else bribing him.

Am I eligible to speak on Activity Based Selling?

In fact I had used this exact process in this guide to win the Best Sales Person Award winning 7.5 million rupees business.

Activity Based Selling

Activity Based Selling 2

 

Sramana Mitra, rated as Top 10 influencers in the World by LinkedIn, where Bill Gates stood No. 1, acknowledged me of delivering concrete results.

What has been my secret of getting such results through my team?

Remain proactive in sales management rather than reactive.

Supposedly, your son has scored B grade in the school. Telling him that B grade should become A grade won’t help. Rather what we can manage is the amount of time spent studying. First you need to monitor this metric. Secondly, you have to influence that it doesn’t fall down.

So rather than repenting for B grade on the report card day,  a better strategy is to proactively manage his day to day reading related activities.

Why Activity Based Selling?

Simply put: Activity Based Selling is data driven and mathematical. Managing by results is gut filled and not mathematical.

Let me present my case with an example. You will find this very common among people who practice sales management by results.

Example of Sales Management by Results.

Sales Boss: ” Good Morning Rajiv. You’re missing your sales targets. I looked at your pipeline report. Before I go further, I will like to hear your views.”

Rajiv: ” Sir I am trying my level best. But I am really very concerned how will I achieve the target of rupees 10 lacs sales this Qtr.”

Boss :” What’s your plan for that? How are you going to achieve it?”

Rajiv: ” I do have a large pipeline. I already have rupees 50 lacs in my pipeline.”

Boss: ” But if you see historically your win rate is 10%. Hence 50 lacs is not enough. You have to make it to 100 lacs dear. What do you think?”

Rajiv : ” I guess you’re right.  That would make sense.”

Boss : “Do you think you can pump up your pipeline in next few weeks.”

Rajiv : ” I think I can. I will put my level best. I’ll just have to work little harder at it.”

Boss : ” You can do it. Get that pipeline number up. Be positive and energetic. You’ll achieve your quota.”

Rajiv : ” Thanks Sir. I will.”

Boss : ” Great Luck. Cheers.”

Sales Management of Activities. 

Sales Boss: ” Good Morning Rajiv. You’re missing your sales targets. I looked at your pipeline report. Before I go further, I will like to hear your views.”

Rajiv: ” Sir I am trying my level best. But I am really very concerned how will I achieve the target of rupees 10 lacs sales this Qtr.”

Boss :” What’s your plan for that? How are you going to achieve it?”

Rajiv: ” I do have a large pipeline. I already have rupees 50 lacs in my pipeline.”

Boss: ” But if you see historically your win rate is 10%. Hence 50 lacs is not enough. You have to make it to 100 lacs dear. What do you think?”

Rajiv : ” I guess you’re right.  That would make sense.”

Boss : “Do you think you can pump up your pipeline in next few weeks.”

Rajiv : ” I think I can. I will put my level best. I’ll just have to work little harder at it.”

Boss : ” Good. I saw that presently you have 10 deals in the pipeline amounting to 50 lacs. So your average proposal size is 5 lacs. Out of this 10 proposals, 6 proposals are through digital marketing and 4 is via cold knocking. 40 conversations converted to 4 proposals. Am I right? ( As he shows the report)”

Rajiv : ” Yes Sir.”

Boss : ” Rajiv we are left with 45 days for this qtr. Generating proposals from cold knocking takes 45 days. The time taken from proposal stage to closure again takes about 45 days to 60 days. Hence cold knocking won’t work. We will reach the Qtr end. Isn’t it?”

Rajiv : ” Yeah Sir.”

Boss : ” Rajiv I have a plan for you. What if I give you 12 more leads through digital marketing in next 15 days? I will plan out with the marketing team. What I need from you is 4 proposal stage deals from this. Apart of this you need to get 2 proposal stage deals from cold knocking by qtr end. This will help you in next qtr. Are you okay with the plan?”

Rajiv : ” Thanks a lot sir. Inbound leads would be of great help.”

Boss: ” Rajiv I want you to succeed. We will review the progress report next week again. The metrics we will measure is “number of demos done“, “no. of proposal plans completed“, ” Complying to proposal planning process“, ” % of proposal sent where customer is still replying and not gone silent“. ”

Rajiv : ” Yes Sir. I will be ready with the new plan.”

Management by numbers are mostly filled with only logic of hard work.

It’s like Abhishek you’re not getting good marks in exam. Please get some good marks. So next time when we meet , you will still be struggling with poor marks.

Management of sales activities is more data driven and mathematical.

Enter Jason Jordan leading a renowned sales management training firm Vantage Point Performance author of “Cracking the Sales Management Code: The Secrets to Measuring and Managing Sales Performance” has a great contribution in advancing activity based selling. This book is worth reading if you want to deep dive activity based selling concept in depth.

The first step to activity based selling is figuring out Sales KPIs and its relation with sales activities.

How to build your activity based plan?

Consider Ms.Alka , a sales manager with a quarterly revenue target of 1 Cr with a team of 5. Alka’s team is working hard but its 45 days and they have produced 20 lacs revenue.

Suppose Ms. Alka sees the results and says to her team ” We are lot behind. We need to produce 80 lacs this next 45 days.” Our opinion is , if it was easy Alka’s team would have done it in first 45 days.

Now suppose Alka digs deeper. She finds out that Win Rate in this Qtr has gone down compared to last Qtr. She addresses her team saying , ” Our win rate has gone down. We need to improve on that quickly.”

Though this version is better than the earlier speech, but Alka’s team doesn’t lose deals knowingly. Question is how are they going to close more deals or increase win rate?

So Alka drills down one more level.

She discovers that most of the leads this time has been from different market segment ( say from Edtech rather than property or coaching) than the last Qtr. The team is not sharing the past success stories of how we have helped Ed-tech companies.

Neither the trial resonates how a Ed-tech company uses the tool.

Alka acts quickly. She gets her marketing team prepare success stories around Ed-tech companies. She also creates a list of software features that Ed-tech companies uses. She also prepares a brief not on how these ed-tech companies uses these features and why?

Now Alka arrives on Monday morning and says , ” We are behind this quarter. We need to improve our win rate even if the leads are of Ed-tech companies or property dealers. We are going to use Ed-tech case studies and trial on-boarding. I want everyone to attend this 1.5 hour training session on Ed-tech case studies, and I expect you to use this in your interaction with Ed-tech companies.”

Now Alka measures the following:

  • Who all attended the training?
  • She listens to two call recordings to each team members. Are they using ed-tech case studies confidently?
  • She checks if the proposal has the customized step by step guide designed for Ed-tech companies to validate the ROI of the investment.

We use Alka’s example to illustrate a much bigger and deeper point.

As a manager , she is managing 3 levels of metrics.

  1. Results : Final output or outcome
  2. Sales KPIs : metrics you can only influence like Win rate.
  3. Activity Metrics: the only thing that you can actually manage every day.

If you manage Activity metrics regularly, you will be able to influence Sales KPIs like (Win rate) which ultimately results in Business Results like revenue.

You can influence Sales KPIs, but only through choosing and managing the right activity metrics every day.

We have shown an example below.

The steps needed to build an activity based plan:

  1. Choose the Sales KPIs.
  2. List down the activity metrics that will influence the Sales KPIs.

3 Types of Activity Metrics. 

Even activity metrics are of 3 types.

They are Planning, Executing & Improving.

Sales Activities that appearing on the Planning Category.

  • No. of sales team members.
  • No. of leads allotted to each team member.
  • CRM data quality.
  • Lead Generation plan completion.
  • Proposal plan completion.

Sales Activities that appearing on the Execution Category.

  • Calls Per day.
  • Conversations per day.
  • No. of Proposals per week.
  • No. of demos per week.
  • No. of leads moved to next stage.

Sales Activities that appearing on the Improving Category.

  • No. of call recordings heard and coached.
  • Training hours.
  • Coached on how to write to non responding leads.

Now it’s your Turn.

Once you know what sales activities to work on, its through Sales Leadership behavior practice that you can bring those changes among your team.

The pace at which this new approach starts working is different for different people. It depends on your style, your ambition, your potential and the time you give to abide by this philosophy.

The common concerns that appear is differentiating between activity metrics and sales KPIs. In ways to correlate between the KPI and related activity metrics.

Failing to benchmark activities with actual accomplishments.

But after a while you will start recognizing that things are moving better than before. More meetings are generated. More pipeline is generated. More sales is happening.

There can be lots of debate the sales is art or science. But there is no debate that sales management is data driven. Its mathematical.

Once you develop the habit of activity based selling, you will see a new thing happening.

You will start asking for more. This is because now you are aware of your actions and with a plan.

How many dials per day? How many email follow-ups? # of opportunity plans completed. # of qualification questions asked. # of best practices suggestions shared. # of new concepts trained to customers. # number of questions asked by customer.

When you master activity based selling you’ll put yourself in the best possible track to success.

Now I’d like to hear from you:

What’s your #1 takeaway from today’s study?

Let me know by leaving a comment below right now.