What are sales Metrics?
A sales metric is a series of reports that help you to measure the present performance of the sales team.
This blog is a complete guide to Sales Metrics.
The importance of sales performance metrics is well understood by sales managers. I don’t want to waste your time emphasizing the same again.
I will rather want to answer : ” Which sales metrics are best to track?”.
How experienced I am to speak about Sales Metrics?
In fact I had used the same exact team management process to win Best Sales Award representing Eastern India winning 75 million rupees business.
As a team manager I have been appreciated by one of the World’s Top 10 Influencers , Ms. Sramana Mitra.
You can read what has been written about her by LinkedIn.
Read below what she wrote about my accomplishments. All these achievements were because of my team.
Many people who have worked with me are doing fairly well in life. Rajiv Ray was urging for a job to me 10 years ago. 4 years he has worked with me. 5 times he had cried working with me but never left. Today he is zonal manager of Marg and about to become country manager. Rahul who was searching for a job of a waiter in a restaurant after passing hotel management. Today he is a regional head in Mumbai with an IT company.
All these people themselves were good enough and full of aspiration. I am not the only reason of their success but just somewhat. However, while working with me , if I would not have led them well , I would have done more hard to them than doing good.
All this because I relied on certain metrics to measure them and the way I used the metrics to manage them.
The greatest teacher of life is time. I have struggled to manage team and thus learnt in due process.
The problem I faced:
- There are so many reports possible, which metrics are best to track?
- How do I create a habit of reviewing almost same metrics again and again rather than come up with new metrics quiet often.
- How I use these metrics to make my team more productive and hot revenue targets?
So if you want to learn how did I overcome these obstacles, lets get started.
Can We Manage Numbers?
“Hit your number” has become the commonplace for sales managers.
We can only manage people , resources and not concepts or numbers.
It’s very much like management-by-reporting.
Can we manage these numbers?
By managing we mean that the sales manager can control that number.
If your child scores 60% in exams you can’t directly manage/control that number. You can manage/control ” time spent studying” , ” number of test series completed”, “No. of time practiced past mistakes”.
We actually can’t control/manage the results of our actions.
We can only manage/control our actions.
We can influence results but can’t control.
Hence, you can influence “Revenue” but you can manage/control “No. of sales calls made by the rep”, ” how fast the leads has been replied”.
In the end, you will realize that there are actually three class of metrics in sales.
- Sales Activities : These are the metrics which you have complete control.
- Short Term Results : These are metrics we can influence but we can’t control. Here is things like number of calls you did Vs number of calls that was answered. So if today you see that only 50% people answered your calls, you could change the time of dialing tomorrow and see an increase. If it doesn’t increase the next day, now you have two days experience and learning, to experiment another time slot day after tomorrow. Within 7 days you would know what is the most optimized connect ratio.
- Long Term Results : These are metrics where your influence is further weak. Its like number of calls vs number of flats/ product sold.
Conclusion : You can fully control sales activities. How the sales activity influences the short term results is somewhat you can influence? The influence on Long Term Results is much weaker.
Therefore the most important set of metrics is the reports relating to Sales Activities. So we will start with that. It doesn’t mean you will not measure short term results and long term results. You need to measure those as well. But in a different frequencies.
It doesn’t make sense to measure Short Term Results everyday.
But the most important part is how do you treat the sales metrics.
What do you do with it?
You use these reports to Coach your reps.
Why Use Sales Coaching?
Effective Sales Coaching is the #1 lever to drive sales productivity.
Coaching is what elevates or upgrades a good sales team to a great one.
You read the report and found a gap. Now work on this gap with your sales team to see that this problem is solved.
Otherwise what’s the use of evaluating the reports.
Reading the reports like a doctor and acting on it , to see that its permanently solved is the function of Sales Leadership.
But coaching is hard.
How do you avoid coaching your reps on the same thing again and again?
What are the most important skills to work on?
How do you correctly diagnose a rep’s main shortcomings?
Sales Management is all about coaching.
A Sales manager’s expectation should be that everyone of his team improve each month by certain degree. This requires that the manager invests time in coaching.
But just making time for coaching isn’t enough.
One of the best practice of sales coaching is to work on one skill gap at a time and not multiple of them.
Working too many skills at the same go overwhelms the team and noting improves.
But how do you know which skill to zero on? To do this you need metrics driven sales coaching.
Using these metrics we can accurately diagnose the sales rep’s weak points and provide coaching grounded on it.
How do you diagnose the right skill to work on?
You need to lean heavily on data. Every sales rep is different and has different strengths and weakness. So its recommended to use data to precisely identify where each one needs coaching.
It is very important here to know that we need to work on one skill at a time.
When you work on too many skills gap at the same time, sales rep gets frustrated and nothing improves. Moreover it is very tough to track improvement in which skill set led to improvement in revenue.
Let us take the scenario of an Organisation that generates leads through digital marketing. This organisation will have a very different set of metric than the organisation that generates leads through cold calling.
Above is the sales activities metrics that an organisation should track that practices lead generation through digital marketing and assigns the leads to sales reps for closing.
The metrics are :
- No. of leads Worked.
- No. of Appointment or Meeting Scheduled.
- No. of Proposals Sents.
- No. of Units Sold.
The short term results metrics to track is as follows:
The short term results metrics generally show the efficiency.
- % of leads created to leads worked.
- % of Worked leads to Appointment.
- % of Appointment to proposal or trials.
- % of trials to Revenue
This is where the role of a software ends. The role of sales management starts.
What do you do if % leads created to leads worked is poor?
The possible reasons are:
- Is the rep poor in time management? Hence not able to follow all the leads.
- Is he lacking personal motivation so not bringing “A” game to work every day?
- Is he over investing time on unqualified leads?
- Is he not enjoying calling?