Research published in 2012 by Jason Jordan & Michelle Vazzana* gives us an excellent insight into what sales organisation can and should measure.
Many of us use January as a month for making goals, changing behaviour and achieving new results. The purpose of this article is to pose the fundamental question of how we measure and manage in sales organisations. Time invested now to get this right could make a radical difference to our focus and results in 2014.
The authors of “Cracking the Sales Management Code” outline 3 types of measure commonly used by sales organisations, those related to business results, those termed sales objectives and finally those related to activities. All three have their purpose.
The first important point to understand is that we cannot manage business results. If we have a target to sell 1 million euro in 2014, we cannot act on this figure to make it change. It is the end result or a lagging indicator.
By contrast, we can manage activities, they are within our span of control, for example, the number of clients we call in a week are within our control.
Sales objectives are a kind of mid-point: They give direction to a sales force. Achieving a close ratio of 50% is an example. We influence them by doing the right activities, and if they are well designed, they will help us achieve the business results.
By way of analogy with our new year’s resolution thinking, we might decide to lose 5kg in weight (a business result). We cannot influence this just by willing the scales to read less. We need to set a goal like, be able to run for 30 minutes without stopping (a sales objective). In turn, we reach this goal by activities e.g. running 3 times per week (activity measure). Clearly the combination of all 3 gives us a much greater chance of success. Note the activity measure is an example of a lead indicator: We can see up front if we are likely to achieve our lagging indicator.
How does it look in your own sales organisation? What measures do you use to guide action? We know the attention management gives to measures, affects substantially the behaviour within an organisation. Does everyone use the same measures?
Now is the time to act: A compass correction at the start of a long journey makes a huge difference at the end of the journey!