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?