Managing Sales By Anecdote? 4 Precise Questions To Measure Sales Productivity

A client of mine, Dennis, called to talk about my helping his company reduce the length of its sales cycle.So, I asked the obvious first question, “What is the length of your sales cycle now?”To which Dennis replied, “Twelve to eighteen months.”Twelve to eighteen months, that’s a difference of a half a year. Which is it? The answer is crucial to evaluate the effectiveness of your sales processes.Like too many sales teams, Dennis and his managers make important decisions about how to structure their sales process, how to allocate management attention and sales resources, and how well they serve their prospects and customers—all based on assumptions and anecdotal evidence, not hard facts.Over the years, I have found that sales managers often measure only three items:

• Sales team and individual sales rep performance against quota
• Revenue by product and customer
• Quantity and value of the prospect pipeline

Unfortunately, these are not the most important criteria to measure. In fact, these metrics have little to do with improving sales processes or shortening the length of the sales cycle from the time a sales lead is received until they are converted into a signed customer. They are like the canary in the coal mine. They can tell you there’s a problem. But they don’t point to the solution.To really accelerate the effectiveness of your selling processes, you need hard facts—not assumptions or anecdotes—on key metrics about the process itself. Examples include:

• How many sales hours did your sales reps spend on each deal they worked, regardless of the outcome?
• How does the number of sales hours invested per opportunity correlate to your win ratio?
• Can you correlate the sales hours invested in a deal to the size of the opportunity?
• Do the number of sales hours invested by each salesperson to win an order vary widely within your sales team?

It’s equally important to get similar hard data about the deals you lose. Unfortunately, the typical lost sales analysis is consumed with answering the question “why did we lose?” While stories can provide context, it is the facts and metrics that will provide the insights on which processes to replicate and which to adjust.But, here’s some good news. Virtually all companies today have access to technology that makes quantifiable data easy to capture and analyze. CRM systems, time card systems, mobile sales apps and project management systems are all readily and inexpensively available to help capture and mine the real data about your sales productivity. Facts, not folklore, are literally at your fingertips, ready to provide the insights you need to truly understand, and improve the effectiveness of your sales process.