An Often Missed Sales KPI That Drives Results

With the wide acceptance of CRM and sales performance reporting, we regularly see sales managers review a variety of performance indicators ranging from what’s in the pipeline to how many deals were won in a specific time frame.

Data readily available from salespeople can be a huge help for not only the sales staff but also the marketing and senior management teams.  For instance, if there are not enough deals in the pipeline, then an early alert is given to all in the organization that corrective actions must be taken or suffer the consequences of a missed sales or profit objective.

Now that the year end is near, it’s is a great time to take stock in the effectiveness of your sales program.

Based on our observations working with a variety of commercial printing companies and equipment manufacturers, there is one indicator that is rarely leveraged. It is deals won divided by proposals generated where customers actually made a decision to act. We use decisions where customers actually acted because we expect great salespeople to qualify opportunities before generating proposals.

The simple formula is:

Deals won/total deals where customers actually made a decision to act = sales effectiveness

5 deals won divided by 25 customer opportunities where the customer actually acted equals 20% effectiveness

We recommend using this KPI to give everyone in the organization a view of what is vital. Detailed analysis of sales effectiveness could lead to adjustments on sales coverage, skills, compensation, marketing and management.

Here are some key questions to ask

·       Of the proposals generated how many were a response to “blind” RFPs – That means situations where salespeople had no significant involvement prior to the RFP being developed?  Are these opportunities worth responding to?

·       How many proposals were enabled from leads generated by the company’s marketing e.g. SEO, social media, trade shows?  How many of those were won? Do we need to do more marketing? What role does the salesperson have in creating and developing leads?

·       How many proposals and wins were generated by salespeople where the lead was mainly enabled, developed and qualified by the hard work and skill of the salesperson? What can be done to create even more opportunities?

·       Are we in enough opportunities that are qualified and the customer is ready to act?

Organizations need to understand where opportunities come from, why some proposals are won and some are lost. Most importantly, how companies and salespeople can add more value to win more deals. The answers to questions can only be developed through using and managing the data that is readily available to marketing and management teams.

Joe Rickard is the President of Intellective Solutions

How Much Pressure Can Salespeople Stand?

The general thinking in managing salespeople is that the right amount pressure on salespeople is good for sales performance.

There have been countless articles on sales management and how to effectively manage sales performance without using undue pressure tactics. What about salespeople who put too much pressure on themselves when closing a large deal?

Recently, I read an abstract, The Impact of Pressure on Performance: Evidence from the PGA Tour February 2015 published in the Harvard Business Review written by Professors Daniel C. Hickman and Neil E. Metz. They used data analysis to determine the effect of pressure on making big money putts on the PGA golf tour. A key finding was that short putts that would result in winning significant amounts of money were not appreciably impacted by the pressure. But they did find that slightly longer putts of 6 to 10 feet were in fact impacted.

For salespeople and managers, an analogy to golf may be logical and no further discussion is needed. For me, the abstract reinforces the necessity for managers to ensure salespeople are working in environments that minimize mistakes and paralysis caused by pressure.

The takeaway is that large deals that are “more than short putts” and which will generate large rewards do result in a “choking” phenomenon for many salespeople.  Here are four recommendations to minimize pressure on large deals where there is a lot at stake.

1.      Match less experienced salespeople with seasoned pros. Experience salespeople will less likely be impacted by the pressure.

2.      Don’t leave a big deal to one person. Make it a team approach. The more support and help will alleviate the pressure on any one individual.

3.      Ensure the deal is sold before the close. Carefully review the sales and buying process to make sure each step was carefully executed.

4.      Test the proposal with the “customer champion” or a loyal supporter in the account to make sure everything has been covered before presenting.

By qualifying the account and thoroughly managing the sales process, longer putts become shorter putts. The shorter the putt; there is less pressure.

Joe Rickard is the founder of Intellective Solutions. Intellective Solutions (www.intellectives.com)  works with printing and technology organizations to improve their sales, marketing and operational effectiveness. The Intellective team enjoys providing Customer Event marketing services. Follow him on Twitter @joerickardIS