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What Do The Numbers Mean?

by David Brock on July 9th, 2013

Sales professionals are very “numbers” focused.  Where are we on quota attainment?  What revenue is produced today, this week, this month, this quarter?  How many calls do we make today?  How many meetings did we have this week?  How many proposals did we complete?

There seems to be no end to the metrics we can establish for sales.

But the metrics or number have little value by themselves.  However, to often, it seems too many sales people and managers focus on the numbers as the goal.  We know outbound prospecting calls are important.  Establishing an arbitrary goal, say 100 per week, and measuring ourselves against that number is relatively meaningless.  What does “100 calls” mean?  Why 100?  What if I only do 80?

The number must mean something, they can’t be arbitrary.  All our metrics must tie together and make sense.

The quota, sales, order and other business management goals are pretty clear, we understand these.  But these numbers are trailing indicators.  They tell us what we’ve done, but are of little help to tell us whether we are on track.  We need numbers that tell us day to day about whether we are doing the things today, this week, this month that enable us to achieve our goals.

Are we doing the things important to our companies?  Sales is the customer execution side of corporate strategy.  How do we know whether we are achieving the strategic management goals of the company?  For example, if we need to penetrate new customer segments, grow relationships with existing customers, grow select product or solution areas; how do we know how we are doing.

Then there’s the day to day stuff our managers tell us to do–or that we set for ourselves, the operational management goals.  We have to make so many calls, we have to have so many meetings, we have to be working so many opportunities.  How do we know the “right numbers?”

Unfortunately, too many times we don’t–so we get these arbitrary goals.  “Make 100 calls, have 7 time coverage in your pipeline, do 10 proposals a month.”  If we do those, will we achieve our strategic goals?  Will we grow our accounts the way we should?  Will we penetrate the new markets?  Will we grow the product lines to support the company investment objectives?

Alternatively, will we achieve our business management goals?  Do the 100 calls this week, next week, and the following week enable us to achieve our quotas?

Finally, do we have the skills and capabilities to do all this or do we need some personal development goals to help make sure we can to all this stuff?

All of these tie together.  If we don’t have the right skills, we can’t make the 100 calls.  If we aren’t calling the right 100 customers, we may not be executing the strategies the company expects of us.  If the yield from these 100 calls isn’t sufficient we won’t achieve our quotas.

Goal Matrix

To give the numbers meaning, to make sure we are establishing the right goals, we have to really understand how our business works.  We have to understand our own personal performance.  We need to be able to know things like our win rate, sales cycle, and average transaction values.  These tell us how many opportunities we have to chase to make our quotas.  They help us know what a healthy pipeline looks like, what kind of flow we need to have.  We need to understand how many people we need to prospect to find and qualify a high quality opportunity.  Then we need to know what it takes to reach those prospects.

To establish the right numbers, numbers that mean something in terms of our performance, we need to understand how our business works.  We need to understand our own personal performance.  Without this, the numbers are meaningless.

Do your goals, do your numbers have meaning?  Do you know how they hang together?  Do you know if you achieve them you will achieve your goals?

If you don’t, then you don’t know what you are doing or whether it has an impact.  You’re just throwing the dice and hoping.

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