Have you ever wondered about the journey a talented racehorse takes to become a champion racehorse? Watching an immature yearling learn their lessons and transform into a racehorse is a very rewarding part of horse ownership. The amount of growth and development that takes place over a short time period at a training center is fascinating.
Training fulfills two purposes. It gets a horse fit as you know. A horse will gain anything between 2% to 5% fitness in Training.
Secondly, it is used to assess the ability and race preferences (distance, surface, equipment) of a horse for better race selection. The horse becomes accountable to specific metrics and performance expectations. Achieving specific metrics allows owners to predict future success.
Are We Winning or Losing the Race?
Sales metrics is the critical component that informs you whether you are winning or losing the race or at least have a chance to win. The race is achieving our revenue goals.
The sales metric equation is relatively simple: “Sales= Rep Performance vs. Sales Goals.” This equation is how sales managers should measure their reps performance in comparison to reaching sales goals. The day to day, week to week, monthly metrics lead us to achieving our annual revenue goals.
There are some basic sales metrics that every sales manager or business owner should be concerned about. Examples:
- The ratio of the cost of sales and impact on revenue
- Median size of closed sales (average selling price)
- Percent of potential sales by each sales rep
- Actual time each sales rep takes to sell products and/or services
Accountability is Not a Dirty Word
Accountability and sales metrics plays a significant role by measuring sales representatives performance against business sales structures. In order to refine sales metrics, comprehensive sales orientation (training) for sales teams is essential. Sales training (orientation) for inside and outside sales personnel should include:
- Time management (#1 issue with the Super 5%) « Coaching the Super 5% »
- Identifying potential sales (prospecting strategies & tactics)
- Closing sales with prospects that lead to resales (lifetime value)
- Building long-term sales relationships with prospects (emotional intelligence, trust)
- Continuous reinforcement of knowledge of products/services
- Adapting sales techniques to new sales offerings
- Goal awareness and implementation
Sales managers should balance sales performance and sales goals between inside and outside sales for optimal sales revenue. Today’s hi-tech methods of sales, content and digital marketing may be considered “inside sales.” The metric impact of these types of “inside sales” should prove timely, effective and produce a greater visibility and branding for business owners, entrepreneurs and sales and marketing professionals.
How to Use Metrics to Create a More Accountable Sales Team
With a finely honed sales training program in place, the next step is to use sales metrics to create a more accountable sales team. Discipline is required to maintain sales goals and sales performance. Create a specific number of indicators of sales performance that can be measured daily, weekly, monthly etc.. Review sales performance on an individual and group basis. It is a best practice to develop a public team scoreboard.
Sales Metrics and Accountability Awareness
Most sales reps know a certain amount of time is needed to develop sales territories. This is another of the metrics that businesses should carefully monitor. The amount of time spent on sales territory research can be costly and impact revenue. Track sales metrics using a simple spreadsheet that includes data on key points that include:
- Existing customer base
- New customers added
- Actual and projected sales revenues
- Sales pipeline projections
- Sales trends
- Analyses of sales organization effectiveness.
Again, don’t forget to share this data with sales reps in weekly sales meetings to increase their performance accountability. By sharing sales metric spreadsheet data, sales reps are more aware of the link between their performance and sales revenue. These links help increase motivation and also create a seamless sales force with greater understanding of their importance to their team and the business.
Customize Metrics to the Needs of the Business
Too often, busy business owners forget the importance of measuring each facet of their sales structure. Create a custom metric that fits the design of the business and also the business offering. For example, a corporation with products and services, needs to create sales metrics that incorporates product performance and service performance, individually and in combination with both business offerings. By separating each sales offering and developing metrics from the outset, it’s possible to combine comparative results to create customized metrics sales reps can use as their template to help them increase accountability.
The Impact of Sales Metrics on Business
Without doubt, measuring sales performance using sales metrics has the potential for allowing sales managers and business owners to stay on top of their sales revenues. Provide sales reps with comprehensive data on their particular sales territory, customer contact and pipelines to avoid loss of time and revenue.
Business owners can also use sales metrics to “forecast” and strategize the future of sales performance, accountability, sales of products and services, as well as demographics that provide optimal sales opportunities in the future.