>How do you measure your sales personnel’s performance? The majority of sales managers will answer that question by saying that they look at the results (i.e. orders) either on their own or against arbitrary targets. Some may even monitor billings or sales as after all orders do get cancelled or the size of the order gets reduced.
However these performances have occurred as a result of efforts applied anything up to 6 months earlier. So what then is the answer?
One way to look at the performance of sales personnel particularly those on the road is to establish a series of metrics that give the manager a good idea of what and how they are doing BEFORE the results come in. Typically a sales manager on seeing below target results will exhort his teams to ‘get out there and redouble your efforts’ as if doing more of the same thing will improve results.
Typically metrics for sales people involve three main areas:
• The quality of what they are doing.
This comes down to their skill levels and understanding of what is expected of them. Have the team been adequately trained and are they putting into practice regularly what they have been taught?
• The efforts they put in.
This is the more traditional measurement of the number of sales visits they make but should also include areas such as numbers of telephone calls, emails, and mailshots and many more.
• Who their customers and prospects are.
Measurement of the types of prospects and customers is essential so that considerable effort is not expended on the low profitability customers or those whose long term potential to the company is small. Segmenting by size of company and potential and then providing targets for sales staff will help achieve these goals.
Other metrics to consider are the number of new customers required each period to achieve goals (consideration of average size and average order come in here.) We have already indicated that the profitability of each customer and the potential for each prospect is also a metric that can be used.
Are the team selling the right mix of products or services in order to meet the goals of the company? Some may be more profitable than others or more difficult to obtain stretching lead times which in turn may result in a poorer performance.
By setting a series of goals and devising a range of metrics or KPIs the future performance of a sales person can be accurately predicted. This feed forward approach will allow the manager to make corrections before the rot sets in and declining sales results appear 6 months or more down the line.