Sales, or as I prefer to call it, “Revenue generation” is the core of every business. No sales, no business. However, the thinking around performance assessment and management of sales is generally pretty superficial.
The demarcation of sales and marketing has also changed enormously with the collaboration and automation marketing tools that have emerged over the last few years. Cold calling is dead, replaced by an array of digital tools and techniques which are generally managed by marketing personnel.
Sales performance is under the microscope, and rightly so as it consumes significant resources, and provides the cash upon which survival depends. Why is it then that the measurement of sales has not evolved to the level of sophistication displayed in other functions.?
My thesis is that the obvious measures have been pretty effective to date, and are simple to use, so little thought has gone into it.
However, for the future, the old tools are not enough, so here is a shot at a framework with 3 axes that seek to acknowledge the huge changes that have occurred in the last 10 years
1. Management of the sales pipeline. There are three basic measures of the pipeline,
- The number and type of opportunities
- Value of those opportunities
- Progress through the pipeline, including the drop-out/re-introduction rates, velocity, closure times, resource consumption rates, and most importantly, conversion rates.
2. Where do the dollars go, and what are the returns. The granularity of the management here is simply a function of where the value is. In large businesses with a widely spread sales force, the detail can be extraordinarily useful as a management and motivational tool of both the way people spend their time, and what they spend their time doing.
3. Sales force optimisation. have the right people doing the right things, in priority order. Pretty simple, except that:
- we are dealing with people, and each one should be managed individually. I have never seen a salesforce that is not a mix of personality and work styles, matching the job to be done to the person is an art that comes only with experience.
- Ensuring execution of strategy at the coal face, where the fancy words, clichés and metaphors hold no water, and what counts are the real personal interactions that occur.
