GITOMER: How do you measure success?
Wednesday, January 16, 2013 9:55 AM
The amount of time management spends measuring sales activity and salespeople (or dumber, the ROI of some investment they made in sales software), is generally wasted effort.
The same amount of time could be invested in making millions of dollars worth of sales if the salesperson was just pointed in the right direction, and trained what “to produce” rather than what “to do.”
How do you measure sales success?
What’s on your sales dashboard?
What’s on your manager’s sales dashboard?
Most dashboards (big picture numbers) are full of useless information that only lead to depression and posting your resume online under an assumed name.
Maybe I’m old-fashioned, but I measure sales in 3.5 ways:
1. How many sales did you make?
2. What was the dollar amount?
3. What was the profit?
3.5 What was the source of the sale?
All other measurements pale by comparison.
There are many sales managers who measure “activity.” Complete waste of time. If you’re comparing a salesperson who makes 100 cold calls a day but zero sales to a salesperson who makes one appointed sales call from a referral and makes one sale, what’s the measurement?
I may be old fashioned, but I’m pragmatic, especially about the sales process. Measure sales, not activity. Measure dollars, not activity. Measure profit, not activity. Document sources, not activity.
I don’t care about activity, even though activity may eventually lead to results. The real question is: what kind of results? If you have to measure a salesperson’s daily activity, you have hired the wrong salesperson or (worse) the wrong manager.
A salesperson or a sales manager looking at activity without understanding what the activity actually is, or produces, is basically staring at a black hole – and worse, blaming some one or some thing, rather than taking responsibility to study “What am I doing with my time?” or better “How am I investing my time?”
Here are some measurements to uncover REALITY:
• Is this the highest, best use of my time?
• Will this produce the best results for my invested time?
• Is there a better way for me to achieve a higher result?
• Is this activity producing sales?
• Is this activity producing profit?
• When I go home at night, what’s my feeling about my job?
The combination of these questions could be the best use-of-time tool ever created.
Now that I’ve buried activity, time management, and cold calls, it’s time to move on to pipeline.
When The Tubes recorded The Completion Backward Principle in the early ’80s, their hit song, “Talk to You Later,” was a satirical comment on how backwards politics was. So, they started at the core and worked forward to society.
I created a similar backward principle on accident in the early ’60s. I was running my dad’s kitchen cabinet factory, and the output production goal was 200 cabinet doors per day. Somehow I knew if we didn’t cut and prepare 200 doors a day we could never produce them. So I started with “cutting” rather than measuring activity.
Surprise, surprise, once I “measured” 200 doors cut, I ended the day with 200 doors produced. No rocket science there.
It’s the same in sales. If your goal is two sales a week, and it takes four appointments to get one sale, then you need eight appointments. If it takes four calls to make one appointment, then the goal is NOT two sales, the mission is thirty two calls. Duh.
Got activity? Or got sales? Get real.
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