Guest Blogger: Brent Holloway, Author of Sales 2.0

Measurements and Morale

Brent Holloway is a Sales Manager at Verint Systems and Co-Author of Sales 2.0: Improve Business Results Using Innovative Sales Practices and Technology

When it comes to sales management, opinions about what you should measure and how often should you measure them will vary, but generally I believe that companies should perform more sales related measurements with a goal of improving performance through the intelligence gathered through these measurements.  Sales related measurements can come from a wide range of CRM reports or other databases and business analytics systems.

Measurements are great, and I enjoy working with numbers, but I have yet to see anything written on the impact that measurements can have on the sales team’s morale. Morale is an important but difficult to quantify component of a sales team’s success. Admittedly I have not done any formal studies in this area, but I am a practicing sales manager with an opinion to share. 

Let’s start with a few points about measurements.  I believe that measuring salespeople or the team as a whole should include both the results (I.e. actual sales, number of products sold, average sales price, average discount, etc.) as well as the leading indicators that produce those results (I.e. weekly pipeline development, number of new opportunities added to the forecast, conversion rate from lead to demo, etc.)  The latter enables us to be better managers and to give targeted coaching in the areas that each salesperson needs the most.  For example, let’s assume that Karen and Joe have similar sales results over the last two quarters.  With good sales process measurements, a manager may see that Karen has a high close rate but poor pipeline growth.  Joe on the other hand may do an excellent job of adding new opportunities to his pipeline but he may be less effective in converting those opportunities.  At the end of the quarter their results may be the same, but armed with these more detailed sales process measurements a manager could focus more coaching time on closing with Joe and on pipeline development with Karen.

I also believe that the need to maintain good relationships with our salespeople can be at odds with a management approach with too many measurements that could make them feel like micromanaged call center agents.  To prevent this, it is important for us to measure only what really matters, and to link how these measurements can help each salesperson be more successful.  A friend of mine who works for a leading Software-as-a-Service company told me that he used to be measured on the number of phone calls and emails he made every week, and that each member’s results were posted publicly.  My friend had relatively poor numbers in terms of phone calls and emails, but he was a high performer and consistently exceeded his quota.  From his perspective the reports did little to motivate, especially since there did not appear to be a correlation between the individual’s phone and email activities and their quarterly bookings.  He is now a sales manager and these measurements are no longer performed, at least not regularly, and the results are not posted publicly.  This is not to say that measuring calls and emails would not make sense for other parts of a sales organization.  My opinion is that those types of measurements may make more sense for a sales development group whose primary responsibility is to prospect than it does for a quota carrying telesales or field sales team.  In addition to actual sales, I believe that measurements of pipeline development (measured by the number of new opportunities added, plus the value of those opportunities) and conversion rates are more interesting and more highly correlated to sales success for a quota carrying salesperson.  And when these measurements are shared at the rep level relative to their peers, it can create a positive form of peer pressure to improve results.  I believe salespeople want to know how they are doing relative to their peers not just in terms of the final results, but also in the key activities that lead to those results.

Another Sales Manager I know from a Software-as-a-Service company believes salespeople “step up their game” when results are posted publicly, and he agrees that results come from the right activities which should also be measured since stack rankings on revenue alone do not always represent effort and can be de-motivating. 

The data to perform certain types of pre-sales measurements such as pipeline development or sales process conversion rates may not be readily accessible.  Since many CRM systems show the forecast as a snapshot in time, it is difficult to measure weekly or monthly trends.  To manage this issue I developed a dashboard spreadsheet in which I copy and paste a weekly forecast report from our CRM system into the spreadsheet. It then automatically calculates and graphs, at the individual and team levels, the weekly changes in closed sales, overall pipeline changes, the number of new opportunities added, and the value of those new opportunities over the course of each quarter.  (If you would like a copy of this free spreadsheet template, please visit www.sales20book.com.)  I share this dashboard with my team once a week so they can see their trends and performance relative to the rest of the team.

Whether or not you agree with my point of view, I encourage you to share your perspective on this subject. 

Brent Holloway

Sales Manager – Verint Systems and Co-Author of Sales 2.0: Improve Business Results Using Innovative Sales Practices and Technology

www.sales20book.com

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One Response

  1. Brent,

    Excellent piece on sales metrics. While we haven’t looked for a correlation between morale and metrics directly, we do find a correlation between performance and morale. D’oh!

    The challenge with most metrics systems is that the metrics are measurement systems for management, not performance feedback loops for the individual. And many, perhaps most metrics don’t directly lead to the goals desired by reps (higher commissions, going to Club, etc.).

    Worse, many metrics gauge activity rather than performance, and activities in which more is not necessarily better. More calls, more face time, more emails, more customer contact. It all sounds good to the manager (and his managers), but you and I know that we don’t close deals by harrassing buyers with endless calls and meetings.

    In fact, our research shows that corporate buyers want to meet with sales people once or twice for a million dollar deal! They want efficient access to information, not a rep in their face.

    Lee

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