Sales management jobs and choosing what to measure

Having been in many sales jobs over the years, and subsequently in many sales management jobs across a several industries, I’ve seen a fair few variations on what to measure when it comes to monitoring sales performance.

Broadly speaking we can separate these entities into ‘primary’ and ‘secondary’ markers of performance. Primary markers are more direct outcomes such as cash sales or perhaps profit, secondary markers refer to things which may contribute to primary markers, for example activities such as numbers of face to face calls, or appointments booked. If we consider these in relation to a sales funnel, the secondary markers are nearer the wide part of the funnel and the primary the narrow end of final output.

There is an old rule in sales management that says, ‘if you measure it, it will improve’. Measuring markers of any kind achieves a couple of outcomes which may cause performance to improve. Firstly, it communicates to your sales person that this is an important factor. Secondly, it provides a feedback mechanism to aid development. Particularly in a team scenario where individuals cannot only monitor their own performance but can also see and analyse the performance of others in relation to their results.

In my experience as a sales manager there are a number of common mistakes which may not optimise your sales growth when choosing what to measure

• Measuring too many markers, for example cash growth, market share, profit, number of calls, number of appointments and number of meetings, can lead to poor focus and confusion with the sales person unable to prioritise which factors are most important.

• Each sales person can focus on different markers making the sales managers job of creativing a productively competitive environment difficult. Quite often each sales person will find ‘a’ marker they can excel at to perceive themselves as the teams top performer! The result can be a team all perceiving they are top performers, and therefore not striving to improve to catch others.

• Measuring secondary markers, because they are easier to monitor, and avoiding focus on primary markers. It can be difficult, for example, if several people are responsible for sales outcomes, to isolate performance. In this scenario, managers often resort to measuring only secondary markers such as numbers of calls to determine performance. This can end up driving poor calling cycles based on generating call numbers and not sales.

• Not making clear the differing priorities of different markers. Every sales person should be able to confirm the order of priority of measured markers to ensure they are all chasing the same goals.

• Poor visibility of results versus key markers. In order to create a competitive environment which drives performance, but also a productive one in which best practise is shared it’s vital that results are clearly visible to all on a regular basis. Vehicles for this would be weekly news letters and team meetings.

In summary, be clear what you would like to define as your primary markers. In most situations, these should relate directly to your company’s objectives and are likely to such as cash or profit targets. Where it may be difficult to focus on primary objectives for individual performance, for example, where it’s a team approach to sales, it may be necessary to focus on secondary markers such as activity. Clearly the idea of the secondary measures is to drive the primary ones, but be wary of individuals chasing the secondary measures, for the secondary measures sake, at the expense of primary measures. For example, someone seeing there favourite customer weekly to produce activity figures alone will not be generating solid cash growth.

Good luck.