Tuesday, June 4, 2013

Another Terrific Metric to Track Salesperson Effectiveness

One of the biggest challenges for presales staff can be working with sales people who don’t “get it” with respect to the need to do sufficient Discovery prior to demos.  Previously I offered a metric that helps separate the great vs. good vs. not-so-good sales people by measuring the dollars-of-revenue per number-of-demos done. In this case the more efficient and effective sales people will have larger numbers.

 Another good metric to track and measure is the number of demo meetings booked in comparison with the number that actually take place on the original dates.

 Very often, sales people will ask for a presales resource to be assigned for a particular date, but then that date moves (sometimes several times!). This impacts the entire organization negatively, as that presales resource could not be used for other opportunities (that might have been better qualified, with better Discovery completed, and a much higher likelihood of coming to fruition). With the less effective sales reps, we would often see requests for multiple dates for demo meetings for a single customer. Those dates often slipped and we received requests for new dates…

 In one infamous case, one rep had tied up presales resources for a full two-week window without ending up with a single meeting! (What a sad waste…).

2 comments:

MR said...

Hi Peter-

What kind of experience do you have with the habits that evolve in the sales organization with these different metrics in place?

As with any metric having too much weight on its own, an organization being measured against that metric will develop habits in reaction to that metric, that may not have the desired effect. For example, with your first metric, a salesperson could focus on only bigger dollar deals and let many of the smaller dollar deals drop off the radar. Of course, you have another metric that keeps them from doing this usually, and that is the overall sales they bring in for the month/quarter/year. Usually their quota drives their income more directly so they pay attention to this more anyway. What kind of experiences do you have with using this metric in real life? Are there other habits that result from it that you have had to deal with?

In some organizations, sales people have learned a habit to contact the presales staff member they want to do a particular demo prior to asking for a resource. Then they can go back and forth with the customer and presales staff member working out availability prior to asking for the resource in the first place. In this situation, the second metric mentioned wouldn't really provide any useful information. Any ideas for tweaking it? Or better yet, another metric to supersede it to change the habit without trying to force change in the software that drives the system?

Thanks!

Peter E. Cohan said...

Hi MR,

I've had a reasonable amount of experience with using metrics, from a range of perspectives.

Metrics can drive behavior. However, typically, we use metrics to track activities and results (and proportions), to enable us to set goals and objectives (the real drivers of behavior) and to enable coaching of teams and individuals.

Metric information can be shared with team members (those who are being measured), but it is not necessarily a requirement.

In the example above, it might be likely that one or two team members have problems with gaining commitment from customers for meetings, for example. I would use our tracking of the above metric to identify the "challenged" sales people to coach and develop them. If necessary, the measurements can also be used to convince those same people that they have a problem, in comparison with their peers.

In summary, metrics are used to measure; goals and objectives to drive behavior.