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Sales Leaders, Are You Micromanaging the Wrong Metrics?
Blog / Sales Management / Jan 8, 2015 / Posted by Scott Edinger / 1007 

Sales Leaders, Are You Micromanaging the Wrong Metrics?

As an executive vice president for sales, I spent countless hours reviewing, examining, and analyzing the sales forecast for my company. I required the managers who reported to me to do the same. And that’s what they asked their reps to do, too.  We weren’t alone. Conversations between sales leaders, sales managers, and sales staff frequently focus only on numbers: Did you make them? Will you fall short? How much do you think you can sell in the next quarter?  The result is an inordinate amount of time spent on inspection and reporting of numbers that are, speaking frankly, out of the control of any sales leader.

In a recent study, the Sales Education Foundation and Vantage Point Performance identified 306 different metrics that sales leaders used in their efforts to manage their business. These metrics fall into three broad categories: sales activities (things like the number of accounts assigned per rep, the number of calls made per rep, and percentage of account plans completed), sales objectives (e.g., the number of new customers acquired, the percentage share of customers’ wallet, and percentage of customers retained) and the subsequent business results (revenue growth, gross profit, customer satisfaction).

Even though managers were spending more than 80% of their time focused, as I had been, on the second two categories, the report found that sales management could affect only the first – the sales activities. The other two couldn’t be directly managed since they’re outcomes, not the process by which the outcomes are gained.

salesmetrics

So which sales activities should sales leaders be managing?  In their book, Cracking the Sales Management Code, Jason Jordan and Michelle Vazzana break down sales activities into four discrete categories: call management, opportunity management, account management, and territory management. Different organizations might need to focus on one or another of these more intently, depending on both the nature of what they sell and where their organizational weaknesses lie. So depending on the needs of your sales organization or team, here’s a way to map the various sales activity metrics to the challenge at hand:

Improve Call Management

Call management is the quality of the interaction between individual salespeople and prospects or clientsand the focus is on such metrics as call plans completed, coaching calls conducted, or even the number of calls that are critiqued and reviewed. Coaching in the area of call management is particularly valuable when the seller need make only a small number of calls to greatly affect the outcome of a given deal. In selling professional services, for example, the ability to create value in one or two interactions with a senior executive often makes or breaks the deal.

Most companies I have worked with don’t want their sales teams pursuing every opportunity possible. Instead, they want to put their maximum effort on the opportunities that match some kind of ideal client profile.

Improve Opportunity Management

This is the ability of salespeople to vet, pursue, and close a multistage sale — and guidance should focus on the number of opportunity plans (outlining the actions required to move through the stages of the sales cycle) completed or the percentage of early-stage opportunities qualified — that is, fully vetted to confirm you are really reaching the right customers, that these customers have the potential to generate a reasonable amount of business for the effort it will take to gain it, and that they are in fact willing to budget sufficient sums to purchase your offering. Identifying bad deals in this way and getting them out of the way early may be the simplest way to increase your odds of success. Most companies I have worked with don’t want their sales teams pursuing every opportunity possible. Instead, they want to put their maximum effort on the opportunities that match some kind of ideal client profile.

Improve Account Management

Account management is the ability to enhance the long-term value of a single client – and guidance should focus on working with reps to develop and adjust account plans so that they define an overall strategy for the customer. This is also when it would be fruitful for you to spend time creating and monitoring standards for important client-facing activities like establishing peer meetings between your organization and the customer (for instance, arranging meetings between your CEO and the client’s CEO) or getting the customer to sit on your organization’s advisory council to provide feedback to your business. I have a high-tech client who tracks the amount of time executives spend each month with a single account that generates $65 million a year. Account management metrics are vital when a substantial portion of your organization’s revenue is concentrated in a small number of key customers.

Improve Territory Management

This is how you allocate sales reps’ time among all the customers in a given territory — you should focus on metrics like the number of customers per rep, number of sales calls made, and even sales calls to different types of customers. By managing the process of selecting, prioritizing, and meeting with target customers you can maximize the use of your sellers’ most precious resource — time.

Many sales leaders have been inadvertently micromanaging through revenue or profit numbers, which is counterproductive. This is your chance to provide your sales team with a new context to succeed in. By closely managing the things you can control, you will give your organization the best chance for success.

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About Author

Scott Edinger is the founder of Edinger Consulting Group. He is a consultant, author, speaker and executive coach who has worked with some of the most prominent organizations in the world including AT&T, Harvard Business Publishing, Bank of America, Lenovo, Gannett and The Los Angeles Times.His new book The Hidden Leader will be available in 2015.

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