Several days ago I wrote: The Most Used, Useless Metric In Sales. At the same time, I posed a question in LinkedIn asking people their opinions on the worst metric in sales. I was surprised by many of the responses. They included quota and revenue targets in every form–monthly, quarterly, annual. They included pipeline metrics, many variations of activity metrics and lots of others. Some of the metrics were very bad, many were simply bureaucratic reporting-having little to do with assessing sales performance, some represented micromanagement on the part of managers.
What surprised me were the number of mentions of metrics that are fundamental to sales–revenue and quota attainment, pipeline, and others. I have always found these key to tracking my own performance as a sales professional and tracking team performance as a sales manager. In reviewing the comments, I thought, “Why are these people saying these fundamental metrics are terrible?”
I realized, maybe the problem isn’t the metric, but the way management implements and uses the metric. Too often, I see great metrics used in very bad ways—management tends to use them as a weapon with which to threaten sales people. “Make your number or else……” “If you don’t make X calls per day, we will find someone who will….” “You need to have so many deals in your pipeline, anything less is unacceptable….” I could go on.
Managers using metrics in this manner don’t understand metrics, frankly, they don’t understand how to manage sales performance. Managers using metrics in this way, may get short term results (through fear and intimidation) but will never create a platform for driving sales growth.
Metrics are like warning signs on the road. They tell you whether you are going the right direction–achieving the goals (whether personal or organizational). When a sales person or the organization is not achieving the goals–when the numbers and metrics will be off. Great managers recognize these are warning signs. Great managers start asking questions, “What’s causing us to be off?” “What’s happening here?” “Why aren’t we making our numbers?” “Why are pipelines not as healthy as they should be?” “Why are activity levels down?”
Metrics provide an indication there may be a problem — metrics do not represent solutions to problems. Top performers recognize this, then look for the root cause. Great managers recognize that just doing more, faster or increasing the “threats and beatings” don’t address the real issue. Understanding what is causing the performance issue, fixing these is the key to improving performance and getting back on target.
Top performance isn’t achieved by managing the numbers. Top performance is based on executing the strategies and fundamentals with discipline and precision. The numbers are just an indicator on how well you and the organization are doing that. Do you have the metrics that tell you whether you are on target or not? When you aren’t making the “numbers,” are you looking for the root causes?
Dave,
Metrics really ARE the secret weapons of sales managers, and I agree that using of them to beat up reps is why they’re so hated. In my view there’s an extremely simple fix.
1) Sales manager assumes role of coach (what a novel concept…)
2) Manger shows rep his/her score for Metric X relative to the rest of the sales team and asks, “Why do you think you rank here?”
3) The next question is, “What, if anything, do you think you, I or we should do about it?”
If there’s a problem, a rational discussion of how to address it follows. If it’s a best practice a plan to share it with everyone else on team is developed. If it’s neither, the two move on to the next metric.
It’s not that freakin’ complicated!
Todd
Great comments Todd, the challenge is, as with many things, metrics are a double edged sword. Too many managers use them in the wrong way–wither to beat people up, looking at them as the end, and not and indicator of an underlying problem, or just apply them incorrectly. (See Anthony Iannarino’s post for a great example). This is where your step 2 is sometimes mis applied by managers–Anthony uses the 20 calls versus 10 calls, which is a higher level of performance example. Step 3 needs to be extended probing to understand the root issue, the real cause and to determine if it’s bad performance and needs to be corrected, or if there is some reason that is beyond the control of the sales person — but still can be fixed. and so on.
It should not be complicated, but too many (sales and managers) make it complicated by not understanding what is being measured, why it is being measured, how to diagnose not achieving the goal, etc.
Thanks, as always for joining the conversation. Regards, Dave
I agree Todd. The problem stems from a lack of management skills. Particularly in sales, managers are promoted to their positions based on their ability to sell. A superior salesperson does not an excellent manager make. The skill sets are considerably different.
In addition to metrics like forecast numbers, funnel activity and other traditional measurements of sales, a good manager should be assessing core competencies of the salespeople. If the salespeople possess the necessary core competencies, the rest of the metrics should fall in line. I used this concept to develop an evaluation tool for manufacturers’ reps. In addition to assessing competencies the tool gives the rep the feedback necessary for improvement, which is back to Todd’s concept of manager as coach.
Frank: thanks for adding to the discussion. I’m amused by your comments about leveraging the concept as a tool for mfg reps—I’ve done similar things with various forms of channel and other partnerships. It provides a great basis both for channel managers and the partners in setting expectations and managing performance. Managers need to work at coaching their partners just as much as their own people. Thanks for joining the disucssion.
I manage a group of manufactures reps. I am now just starting to understand the value of sales metrics. Can anyone give me a good place to start for using sales metrics for reps? For example, I am starting to look at customer retention per territory, etc………
The other question is…………. are you using a software program to figure this out? The only data I have is in Excel.
Thanks in advance for your feedback
Dan, thanks for the comment. I’ll respond to your specific questions privately.
This hits very close to home. Working in a position where the measurements of success are based on, territory coverage, time spent on the phone, and just how many customers you contact everyday sometimes becomes a huge demotivator. My philosophy is, if I am reaching 10 accounts per day and bringing value to the call, selling based on service model, and growing wallet share and running my territory at 130% YTD for Sales and 124% GM…why am I still having discussions around my success. There are many people that dial for the sake of dialing(fear driven). 20 calls with 0 value being delivered = failing territory in my books.
I agree that using metrics as a measurement can be effective if it is used as a coaching tool. When the manager is only focused on that and not looking at the individual personalities and what makes them tick, then they are creating fear based activity which in the end will lead to relentless recruiting because turn over will be so high. I have seen and still see. Managers everywhere need to make a paradigm shift. FEAR MOTIVATES NO ONE!
Jennifer, thanks for the comment and isight. Without metrics, managers cannot coach people to achieve the highest levels of performance. Your comments are right on! I hope you continue to join the discussions here. Regards, Dave