Performance Management Friday — Activity Measures

For the past several weeks, I’ve been focusing on various aspects of the funnel/pipeline.  We’ve explored different measures or KPI’s that can be used to monitor personal performance and help sales professionals assess ways to improve performance.  Let’s leave the funnel/pipeline for a while, and look at some other things that may be helpful.

Activity levels are important.  Yeah, I know many of you are groaning in anticipation.  Too many of us have been subjected to arbitrary or meaningless activity measures.  Whether its the number of daily outbound prospecting calls you have to make, the number of customer meetings every week, the number of proposals, ……whatever.

We’ve all seen activity measures that are just plain stupid, arbitrary and meaningless.

But activity levels are important,  Understanding the activities that are critical to our own performance and success is critical, both to help make sure we are on target to achieving our goals, and to continually tune how we work, always improving our effectiveness and efficiency.

The process of identifying your own critical activity measures itself is very powerful.  It requires you to closely examine how you work, what you do.  It requires you to analyze what works, what doesn’t.  Too often, we just blindly do the same things time and time again.  Too often, it’s out of habit, because we’ve been taught a certain way, or because we may have been told to do things a certain way.

The process of identifying your own activity measures requires you to assess and analyze everything you do—how you plan your time, how you reach out to customers, how you engage them, how you manage your territory, how you manage opportunities, how you engage your customers.  Every time you take the time to do this, the insights are awesome, you always find things to change and improve.

But when you are looking at identifying the right activity measures, you want to look at things that are leading indicators to your success.  You want to look at the one or two things you need to do consistently that tend to produce wins over the long term.  You want to establish activity goals that can be tied to overall quota success. 

Generally activity measures probably have something to do with things you do every week—we reach out to new customers and prospect, we have certain numbers of customer meetings, we know we must do a certain number of proposals, we may have to attend certain numbers or types of events.

They don’t have to be complex or fancy.  Everyone in the organization might trigger off the same type of activity, but the goal that’s established could be different for each person.

Let me give an example from my own company.  We know that new prospecting conversations is a critical activity for our success.  We want to acquire a certain percent of our revenue from brand new customers every year.  Based on our funnel/pipeline metrics, we know roughly how many prospects we have to qualify to meet our goals (at our conversion and average tranaction value).  We also know roughly how many prospecting conversations translate into qualified opportunities.

There are a lot of activity metrics I can choose to monitor my performance, but the one that I have found most impactful (at least for the past few years) is the number of prospecting conversations we have with new people each week.  I know that to make my numbers, to continue to build a healthy funnel and create the right deal flow, I have to have 8 meaningful prospecting conversations each week.  I used the approach outlined above to determine that number.  Most of the other guys in our organization have chosen the same metric–but their personal weekly goal is different.  Jerry’s is 10, Marc’s is 12, John’s is 5.  Each of us has a different number–it’s based on each of our overall goals/quotas, win rates, and so forth.  Each of the guys established their own metric and set their own goal.

Another one of my guys has a different metric–it’s tied to monthly speaking engagements.  He generates much of his new business from speaking.  So Mark (a different one from above) has established a personal goal of speaking 2 times a month at certain types of events/conferences.

We each monitor ourselves on our personal activity metrics–we each know if we hit our number, we are very likely to hit our quotas.  As the manager of the team, I track how each person is doing (we publish it so everyone sees it).  When a person falls behind, I don’t need to beat that person up—that individual is already beating himself up.  Our conversation focuses on exploring how to get back on track.  Whether there are things that he should be doing differently, things that I or others on the team can do to help.

Many of the traditional activity metrics we have used are actually very good, but the goals have been established in an arbitrary and meaningless way.  For some people the number of daily outbound telephone calls can be very powerful.  But the actual goal can’t be arbitrary for that metric to have an impact.  Declaring that everyone has to have 100 outbound calls is meaningless.  One person may only need 50, another may need 75, someone else can do something completely different.  For these metrics to have real power, we have to be able to understand that the 50 daily calls is directly tied to my ability to meet my quota.  That number has been established based on my territory, my quota, and the way I work.

If you are a manager, you may want to choose some simple, easy to track metrics–whether it’s telephone calls, meetings, or whatever.  But let each person set their own goal–whatever is appropriate for that individual.  Review that goal with them, walk through the process by which they established the goal–this conversation by itself is one of the most important coaching discussions you will ever have with your people.  It will help both them and you really understand how they work, it will help you identify and coach them on ways they might improve.  Once you and they establish the goal, they will own it–your job is to just help remove the barriers to their ability to achieve it.

Can you identify the single activity metric most critical to your ability to hit your goals?  Make sure you think about what you do, that you analyze and test until you can identify that single activity metric that is the critical leading indicator to your success.