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09 - Sales Management Metrics

Sales management metrics provide important insights into sales performance and accountability. Choosing the right metrics is crucial for success. Metrics should measure multiple aspects of the sales process, from lead generation to customer relationships. They should be specific, goal-oriented, and used to identify areas for improvement through training or process changes. Analyzing metrics provides a full picture of sales performance and enables benchmarking and data-driven management decisions.

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62 views

09 - Sales Management Metrics

Sales management metrics provide important insights into sales performance and accountability. Choosing the right metrics is crucial for success. Metrics should measure multiple aspects of the sales process, from lead generation to customer relationships. They should be specific, goal-oriented, and used to identify areas for improvement through training or process changes. Analyzing metrics provides a full picture of sales performance and enables benchmarking and data-driven management decisions.

Uploaded by

Dlx AreaOne
Copyright
© © All Rights Reserved
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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Sales

Manageme
nt Metrics
A White Paper
Sales Management Metrics
Measurability of the performance has become a key component of an effective
sales management strategy. Data-based sales and marketing practices have
been proven to be effective in improving the accountability and mitigating
various management risks by providing important insights.

However, numbers alone do not tell the whole story. Choosing the right metrics
that measure the right things is very crucial to the success of any sales
management. As the saying goes, “If you can’t measure it, you can’t manage
it.” This white paper discusses some of the most important metrics practices
that sales managers can use to manage their job more effectively.

Choosing the Right Metrics

Some metrics are obvious and some are complex and very specialized. Some
are hard to measure as the data may be unavailable or vague. To make things
worse, no single metric is likely to be ideal metric to completely rely upon. So
choosing multiple metrics that provide varied points of view helps the sales
managers to have a better understanding and greater control over their
activities.

Balance Macro Metrics with the Micro Metrics

To make meaningful conclusions out of the data gathered for metrics, you need
to balance both the macro and micro metrics selected for your sales
management system. Usually various individual performance metrics
contribute to a larger macro view of a specific area. Select metrics that are
relevant to the areas of sales management that you consider vital for your
organization to have a better understanding.

Chose Metrics that Measure the Change in the System

Metrics that concentrate only on processes and functions miss the most
important factor of business – change. A metric must help you understand the
changes happening in your business and the organization or lead you to the
necessary changes that must be made in the system. Sometimes, the metric
itself or the data gleaned from it turns out to be the driving factor behind a
change. Make sure that metric data is actionable and then – act on it.

Align Metrics to the Sales Process and the Benchmarks


With out a process to act upon the insights drawn from metrics, all you end up
with is piles of data. And for the insights to be meaningful and relevant, the
metrics have to be aligned with the sales process put in place in the
organization. Chose metrics that help you measure the effectiveness of
important individual functions that form the sales process.

Aligning metrics to benchmarks helps you identify the areas that need
improvement. By focusing more on specific areas of sales management that are
crucial to the business operations, you can increase the efficiency and
effectiveness of the sales force. It is better to take an incremental approach in
choosing the benchmarks and related metrics.

Identify Performance Issues and Chose Relevant Metrics

Lack of performance metrics, poor processes to gather customer data and


inadequate capabilities to analyze such data are some of the top performance
challenges faced by sales management. Carefully review your sales process and
identify specific functions or areas that seriously impact the overall
performance and those that need further improvement - for example under-
performing sales representatives, products, channels and client accounts - and
design metrics that address them.

Make Your Metrics Specific, Meaningful, Goal-Oriented and Trainable

Metrics you choose must be specific and measurable. They should directly
correspond to what you want to measure and produce actionable data. They
should be meaningful to the context of your business activities and
environment. Choosing a metric or an analytic system just because it happens
to be the most popular one in the market can be a flawed investment.

Metric data without goals hardly tell you anything worthwhile. Each statistical
metric component of your system ought to have a specific goal. Aligning your
metrics with the benchmarks, either internal or external, of the sales process is
a good way to make the most of sales metric management system.

Finally metrics have to be trainable or actionable. Having metric data that


produces insights and not acting upon it is just as good as not having any
metric management system at all. Identify the deficiencies in the skills of sales
representatives or the under-performance in a sales function and devise training
programs to address those gaps.

Make sure the training programs too have the relevant metrics to test the
understanding and assimilation of the new skills by the sales force and also to
measure their performance in the post-training environment.
It’s the Insights and Intelligence, not the Data, that are Important

Many organizations use analytics programs and have a system in place to


gather the necessary data. But most of them do not subject the gathered data to
rigorous analysis to see what’s really happening. Metrics analysis should not be
a one-off activity but a part of the organization’s strategy to continually
improvise its efficiency.

Use analytic applications to glean insights and actionable intelligence from the
metric data. For example, a large organization that has many products,
channels, customers, accounts and sales reps may be overwhelmed by the sheer
amount of data it possesses. To make a better sense of that data, it might be
more useful to consolidate the data from diverse sources to have a single view
of a customer. This is more helpful in devising sales strategies and allocating
resources.

Cover Everything

The sales metrics chosen should measure every step of the sales process, right
from the lead generation campaign to account management and customer
relationship management. Such a full spectrum sales metrics management
system provides a complete overview of the entire sales and marketing arena.

The metrics chosen should ideally include financial metrics (such as sales by
customer segment, sales by product type, sales by geography, forecast vs.
actual sales, actual expenses vs. budgetary allocation, and average revenue per
customer), activity measures (such as number of new account calls, number of
calls by account size, number of calls by segment, number of sales closed, etc.),
and customer measures (such as customer retention ratio, frequency, cross-sell
rates and up-sell rates and number of buying centers within an account).

Summary

Using metrics to measure the effectiveness of the sales force enables the
management and top-level leadership to benchmark high performing sales
talent, understand why some sales representatives perform better than others,
identify areas to be focused in pre-hiring measures and post-hiring training, and
evaluate and improvise the effectiveness of the sales processes being employed
by the organization.

That is the reason why every sales management is using sales metrics and
analytics systems. A sales metrics management system is probably the first
source you refer to when you have a question about a product or sales function
or performance.

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