Using Metrics to Drive Sales Force Execution
What New Research Reveals about Measurements,
Processes, and Good Sales Management
E XECUTIVE S UMMARY The business of managing Sales is undergoing a transformation.
It is a change that has already taken place in other business functions like operations and finance, where they
abandoned ‘art’ and embraced ‘science,’ enabling them to lead their organizations with confidence. However,
there are still some missing pieces in the sales management puzzle.
The biggest missing piece is a lack of insightful performance metrics that senior executives can use to pinpoint
problems and proactively manage change. Over the past decade or more, information systems have vastly
improved the measurement and reporting capabilities within the sales function. However, this increased access
to data has not been accompanied by a corresponding increase in control over sales performance.
To make the most of this avalanche of sales data, executives desperately need a clear understanding of:
1) Which metrics are most meaningful for their particular sales forces
2) How those metrics can be used to proactively influence their sales force’s behaviors
Based on the examination of 174 different metrics that 17 leading organizations use to manage their sales
forces, we have uncovered new insights that will help executives drive dependable execution within their sales
forces. In this paper you will discover:
›
The metrics you choose to manage your sales force will determine how “manageable” your sales
force actually becomes. 74% percent of the metrics being used to manage sales forces are not
directly related to salesperson or sales manager activities. Such metrics can be valuable for planning
or reporting purposes, but they cannot be used to directly influence your sales force’s behavior. Learn
which metrics you managers can use to guide your salespeople’s performance.
Types of Sales Metrics Revealed in Our Research
Business
Results
Financial Metrics
Pipeline Metrics
Customer Satisfaction
Employee Satisfaction
Market Share
Used to Report Progress
Sales
Objectives
Sales Force Capacity
Salesperson Capability
Product Focus
Customer Focus
Human Capital
Used to Diagnose and Plan
Sales
Processes
Call
Management
Account Management
Sales Force
Management
Time
Management
Opportunity Management
Territory
Management
Copyright © 2010 Vantage Point Performance, Inc.
Used to Manage
Salespeople
1
›
›
Implementing the right processes for your team is critical to proactively measuring and managing the
selling effort. There are several distinct sales processes – each with its own business purpose, day-to-day
activities, and supporting tools. Which processes you need in your sales force depends on the nature of your
selling roles. Learn which process you need (and don’t) in your sales force.
›
The key to executing your go-to-market strategy is to set clear objectives and link them to the daily
activities of your sales force. Sales objectives give your sales force guidance on what they should be doing
in the field. Without clearly stated objectives, your salespeople will do whatever they perceive to be the
right things – often inadvertently working against your overall goals. Learn how to identify and
communicate your key sales objectives.
An interconnected chain of
accountability and measurement
ensures that your sales force is pursuing
objectives that will achieve your desired
outcomes. A sales force should help your
organization attain its desired business
results. The task for executives is to
provide direction to the sales force on
which sales objectives to pursue in order
to achieve those results. It then becomes
your sales managers’ task to embed those
objectives in their salespeople’s activities
and ensure that the salespeople execute.
Learn how to create this chain of
accountability.
Using Metrics to Drive Sales Force Execution
Business
Results
1. Identify the Results you want to achieve
2. Select Objectives that will lead to those Results
Sales
Objectives
3. Embed the Objectives in the relevant Processes, and manage the processes relentlessly
Sales
Processes
Sales is evolving from an undefined art into a highly manageable science.
Companies that continue to operate without good sales processes and metrics will be left behind by competitors who
can shift their strategies at any time and watch with confidence as their sales forces’ behaviors shift in synch.
Implementing a system of processes, metrics, and tools to manage your sales force is a key checkpoint along the
road to sales excellence. Our new research provides a comprehensive roadmap for your journey.
Benchmark Your Own Sales Force against Our Findings Sales Force Execution Scorecard
Strategic Clarity
Process Implementation
Metrics/Reporting
Overall Ability to Execute
100%
74%
58%
65%
Coaching Ability
Supporting Tools
Incentive Alignment
25%
60%
90%
Copyright © 2010 Vantage Point Performance, Inc.
2
Using Metrics to Drive Sales Force Execution
What New Research Reveals about Measurements,
Processes, and Good Sales Management
Prepared by
Jason Jordan
Principal
Copyright © 2010 Vantage Point Performance, Inc.
3
Introduction
Vantage Point Performance recently completed new research into the performance metrics used to
manage world-class sales forces. We analyzed survey responses from 17 major corporations and
consultants, who provided a total of 174 specific metrics that are used to manage such
organizations.1
Though our research was originally focused solely on sales metrics, our analysis soon shed light on
other related areas of performance management, such as selling processes and sales objectives. In
sum, we derived from the research a new sales management system that will increase a sales
leader’s control over the behaviors and productivity of their sales force.
In this paper, we will share with you the many new insights that we gained including:
•
The three types of sales metrics
•
Which metrics can be ‘managed’ and which cannot
•
The six types of sales processes
•
How to identify the processes and metrics that are critical to your sales force
•
The five types of sales objectives
•
How to set meaningful objectives and link them to salesperson activities
•
How to manage your sales force to achieve optimal business results
Early feedback from top sales executives and thought leaders tells us that our findings are a
meaningful advance in the understanding of sales force execution. Please feel free to contact me
directly with your own thoughts, experiences, or questions.
Jason Jordan
Vice President
JJordan@VantagePointPerformance.com
1
Source data was received from the University Sales Education Foundation, a not-for-profit organization committed to advancing the profession
of Sales through education in universities and colleges. Please learn more at www.SalesEducationFoundation.org.
Copyright © 2010 Vantage Point Performance, Inc.
4
Table of Contents
Our Point of Departure ................................................................................................................... 6
What We Learned about Metrics .................................................................................................. 8
What We Learned about Processes .............................................................................................. 12
What We Learned about Sales Objectives ................................................................................... 17
What We Learned about Business Results .................................................................................. 23
What We Know about Implementation (including examples)....................................................... 28
A Case Study and Concluding Thoughts ..................................................................................... 37
Copyright © 2010 Vantage Point Performance, Inc.
5
Our Point of Departure
Two years ago I found myself sitting in the
Manhattan headquarters of one of the largest media
companies in the world. At the table were the
company’s president, its SVP of television networks,
the SVP of its online properties, SVP of print
publications, and several other senior executives. The
topic of the day… sales. My consulting firm had been
hired to assess why the company’s many sales forces,
which were aligned by type of media, were not
successfully cross-selling each others’ products. As
we began to discuss our findings, the president
chimed in:
“Did you take a look at the compensation plans?”
“Yes,” I replied. “There is definitely a problem
there. Most of your salespeople have no incentive
to sell the other business units’ products. In fact,
in some places there are effectively
disincentives.”
The president said, “I knew that was a problem.
We should redesign all of our compensation plans
immediately, so we can get our salespeople
selling all of our products to all of our customers.”
“That is definitely a recommendation we’re going
to make, but there are other things you need to
consider that are at least as important as the
incentives,” I followed.
“Like what?” asked the president.
“Well, as you know, many of your sales forces
call on the same customers, like advertising
agencies and large corporations. It would be very
Copyright © 2010 Vantage Point Performance, Inc.
dangerous to promote the cross-selling of your
products without first putting in place some basic
account management processes to coordinate the
effort across those large customers. You also need
to deploy additional management processes to
help resolve any turf wars that erupt once three or
four salespeople are motivated to sell the same
products to the same customer. In fact, you might
even rethink your salespeople’s account
assignments. If not, you are going to have some
very annoyed customers, and even worse, your
savvy customers will pit your salespeople against
one another to drive down your prices. Without
some new processes and metrics to manage this
change, you could do more harm than good with
new comp plans.”
“Yeah, we will probably want to think about that
sometime,” said the excited President, “but we
first need to put the right incentives in place. Even
as we sit here, we’re losing revenue.”
“Well, again,” I replied, “I would caution you
against putting new compensation plans in place
without any means to monitor and manage the
problematic behavior that will commence on the
very first day the new incentives are in place.”
“Yes, I hear what you’re saying, Jason. So how
long will it take to get the new compensation
plans designed and implemented? Can we get it
done by the beginning of the year?”
This was one of many similar conversations I have
had over the years. I recount it not because of the
president’s over-reliance on compensation as the
single lever to govern sales performance – I recount it
because of his total lack of interest in the processes
and metrics that could have helped him proactively
manage the change. If there is one common trait
across all the sales forces I have seen make
remarkable improvements in performance, it is sales
management rigor... rigor that begins with formal
sales processes and insightful metrics.
As I sat in Manhattan, I was reminded of another
client I had worked with several years prior – a
6
distributor who was also suffering flat revenues and
profits. We had done some analysis and discovered
that what little profit they had was concentrated in
their biggest customers. Consequently, we
recommended that they focus their sales force on
protecting and growing those accounts. In this case,
management agreed with our recommendation to
redesign the compensation plans and implement new
account management processes and metrics. When
we returned 12 months later to check in on their
progress, here is how the conversation went:
“So how have things gone since you made the
changes last year?” we asked. “Is the sales force
still committed to using the account plans and
reporting tools that we developed for you?”
“They’re doing pretty well,” the CEO reported.
“Right now only 8% of our locations have totally
rejected the account management tool. 39% are
complying with the process at a basic level, and
the other 53% are using it as a central component
of their sales and management activities. Also, the
reporting mechanisms are now in place, so all our
sales reps can track their performance at a detailed
level.”
“Great,” we replied. “How about performance?
Have you measured the impact of the new
processes and metrics?”
“Well, revenues and profits from our largest
customers, the ones under the account
management program, are up 26% from last year.
All of our other customers combined are basically
flat, so I’d say that the processes and reports have
made a huge impact in helping us grow
profitably.”
The primary difference between the media giant and
the distributor was a commitment to change the way
they sold. Not just how they motivated and rewarded
their salespeople, but what happened in between
motivation and reward – the actual tasks of selling.
The executives of the distributor also had a deep
appreciation for the role that processes and metrics
play in managing a sales force – particularly in
managing change. By providing clear guidance on
the behaviors that they expected and then measuring
those behaviors and associated outcomes, they were
Copyright © 2010 Vantage Point Performance, Inc.
able to lead their sales force through a very dramatic
change.
The Transformation at Hand
The profession of sales management is currently
undergoing a transformation that will take it from the
media company’s mindset to that of the distributor. It
is a transformation that has already taken place in
other corporate functions such as operations and
finance, where they chose to abandon artistic
management and embrace ‘management science’ that
enables them to lead their organizations with
confidence. Under the banner of Sales 2.0 or other
such labels, there is a nearly ubiquitous sentiment
that sales is on the verge of taking its organizational
rigor to a higher level. But there are still some
missing pieces in the sales management puzzle.
As our stories illustrate, the biggest missing piece we
perceive is the lack of insightful performance metrics
that senior executives can use to pinpoint problems
and proactively affect change. Over the past decade
or so, information systems have vastly improved the
measurement and reporting capabilities within the
sales function. However, increased access to data
doesn’t seem to have been accompanied by a
corresponding increase in control over sales
performance.
To skillfully use the data at their fingertips,
executives desperately need a clear understanding of:
1) Which metrics are most meaningful for their
particular sales force
2) How they can use those metrics to proactively
influence the behaviors that drive sales
performance
If sales leaders had the answers to just these two
questions, they could very quickly take their sales
forces to that higher level of discipline and control.
These questions became our point of departure for a
very insightful study of the metrics that are used to
manage leading sales organizations. Based on the
outcomes of this research, we believe that we can
now provide the answers to these two essential
questions.
7
What We Learned about Sales Metrics
Can You Actually Manage that Metric?
As we mentioned above, we received 174 sales
metrics from 17 different organizations. The first
observation we had in reviewing the various sets of
sales force measurements was that each company had
categorized their metrics in very different ways.
Though there were many metrics in common across
the responses (% of Reps Attaining Quota, % CrossSelling of Products, $ Spent on Training, etc.), there
was little commonality in the way the measurements
were organized. It was also unclear that any company
had a taxonomy that was superior to the others. In
fact, their attempts to categorize the metrics were
baffling at times.
For instance, one company had divided their metrics
into Internal and External measurements, but they
had two metrics that were in both columns. Another
had organized theirs into buckets of Revenue, Cost,
and Salesperson metrics, though the Salesperson
measurements included measures of both Revenue
and Cost per Sales Rep. Yet another provided a
laundry list of more than a dozen metrics arranged in
no discernable order. In the end, the metrics were
organized (or not) in as many different ways as there
were respondents, yet none of the methods was
particularly intuitive or readily understandable.
It’s quite possible that the seemingly random
categories were not random at all. Perhaps the
metrics were arranged in a particular fashion because
of internal reporting requirements or even because of
the information systems from which they were
extracted. Regardless, the categories were not very
useful for our purpose, which was to understand how
sales leaders can use key metrics to manage their
sales forces.
2
Frustrated by the lack of order that the survey
respondents had provided, we decided to put all 174
metrics into a pile and attempt to organize them
ourselves. After experimenting with several criteria
to establish our new groupings, we ultimately
decided on a single question to serve as our
guideline:
How ‘manageable’ is each metric?
That is, how much control does a sales manager have
to directly affect that specific metric? An example of
a ‘manageable metric’ might be the Number of
Accounts Per Rep. This metric is highly manageable,
since a sales manager can easily reassign their sales
reps’ accounts to increase or decrease the number. An
example of an ‘unmanageable metric’ might be
Revenue per Rep. No sales manager can simply
command a salesperson to have more revenue
(though many have tried). There are many
independent factors that affect a salesperson’s
revenue, so it therefore cannot be directly managed
by a sales leader.
Using this one question as the basis for our
undertaking, we soon discovered three distinct levels
of ‘manageability’ into which nearly all of the
metrics fell.
Highly Manageable Metrics:
SALES PROCESSES
All of the metrics that were deemed directly
‘manageable’ were related to salesperson or sales
manager activities. These activities (and the larger
processes to which they belong) can be managed
through unilateral decisions of a sales manager. For
example, a sales manager should be able to decide
and direct that salespeople prepare account plans for
their major customers.2 If so, then these are the only
Within this category of metrics, we concluded that a sales manager could either affect the metric themselves or instruct the salesperson to
behave differently, which would in turn affect the metric. Of course, a manager’s telling a salesperson to do something is clearly distinct from
that salesperson’s willingness to actually do it. However, we assume that good managers do have influence over their salespeople’s activities,
which is after all their role.
Copyright © 2010 Vantage Point Performance, Inc.
8
sales force metrics that can truly be managed with
any level of certainty and control, because they are
the immediate results of actionable decisions by a
sales manager.
The ‘Manageability’ of Sampled Sales Force Metrics
Business Results– Multi-dimensional outcomes that cannot be managed
Revenue
Quota Achievement
Customer Satisfaction
Pipeline Size
Pipeline Shape
Sales Cycle Length
Volume
Sample Sales Process Metrics:
• # of Calls
• % of Account Plans Completed
• Hours of Training per Rep
• Hours of Coaching per Rep
• % of Reps Using CRM
Sample Sales Objective Metrics:
• % Customer Retention
• % Sales Calls Advancing
• Salesperson Skill Level
• # of Newly Acquired Customers
• % New vs. Existing Products Sold
Unmanageable Metrics
BUSINESS RESULTS
Our final category of metrics we observed, Business
Results, included very high-level outcomes – often
at the enterprise level. Business Results have no
direct relationship to salesperson activities or
processes and cannot be managed. They can only be
influenced by achieving certain intermediary Sales
Objectives that would lead to achieving the Business
Result. For example, a sales manager cannot in any
way directly affect Market Share (a Business
Result), but an increase in customer Share-of-Wallet
(a Sales Objective) should lead to the overall result
of increased Market Share.
Market Share
Sales Objectives – Require ‘agreement’ and can be managed only indirectly
Call Outcomes
Segment of Customer
Ramp-Up Time
Territory Coverage
Skill Level
Deal Size
Up/Cross-Selling
New/Existing Customers
Sales Force Turnover
Customer Retention
Share-of-Wallet
New/Existing Product
Sales Processes – Individual decisions that are highly manageable
Tool Usage
Indirectly Manageable Metrics:
SALES OBJECTIVES
Many of the metrics we observed were measures of
success in achieving specific selling goals or
objectives. These are not unilateral decisions that can
be directed by a manager – they require some level of
agreement by customers or employees. These can be
influenced only indirectly by managing the preceding
activities in the Sales Process level that lead to
success with the stated sales objectives. For example,
a sales manager cannot direct a customer to hand
over a higher Share-of-Wallet (a Sales Objective),
but they can direct their salespeople to increase their
account planning activities (a Sales Process) which
should ultimately affect the Share-of-Wallet they
receive from their customers.
Cost-of-Sale
Call Volume
Coaching
Time Allocation
Prospect Type
Call Type
Process Usage
Account Planning
IT Investment
Number of Accounts
Training Investment
Training Type
Sample Business Result Metrics:
• Revenue Attainment
• Market Share
• Size/Shape/Length of the Sales Pipeline
• Profitability
• Customer Satisfaction.
The fact that Sales Objectives and Business Results
are not highly manageable should not imply that they
are unimportant. In fact, the respondents in our
survey weighted all three fairly evenly, and we
believe that collecting metrics at all levels is critical
to managing any sales effort. However, sales
leadership should have a clear appreciation that the
nature of the three types of metrics is quite different,
and they should be used to answer very different
questions.
Sales Process metrics have very high value in
managing a sales force, as we have discussed. In fact,
these are the only leading indicators of sales success
– that the proper sales processes are being executed
properly. For front-line sales managers, these should
be the primary pieces of feedback about the ongoing
performance of their salespeople.
Prevalence of Different Sales Metrics
45%
40%
38%
36%
35%
30%
26%
% of Metrics 25%
Cited
20%
15%
10%
5%
0%
Results
Objectives
Processes
N=174
Copyright © 2010 Vantage Point Performance, Inc.
9
Sales Objective metrics have very high value in
diagnosing problems and planning future activities.
In most companies, the setting of Sales Objectives is
a strategic decision that should be made in
collaboration with marketing, finance, and other
functions that also have a say in how the company
goes to market with its products and services.
Business Result metrics have very high value in
reporting. Again, these are commonly enterpriselevel measurements that gauge the overall health and
success of an entire company. These must be
monitored (and they are) with great attention, though
they have no active role in management beyond
measuring success and providing guidance on how
the preceding Sales Objectives might need to be
changed.
A Word about ‘Managing the Pipeline’ Many readers will see Sales Pipeline metrics in the Unmanageable category of Business Results and immediately raise an eyebrow. We too fell victim to the established notion that a sales pipeline can be ‘managed’. But extended consideration led us to conclude that a pipeline report is in essence a probability‐weighted financial statement. Projected revenue is no more manageable than historical revenue – it is just a forward looking Business Result. However, analyzing the size, shape, and length of the sales pipeline is a powerful management tool. It provides insight into how Sales Objectives need to be shifted (acquire bigger customers, increase territory coverage, etc.), which in turn enables sales managers to direct activities at the Sales Process level (target bigger customers, increase the number of sales calls, etc.) which will ultimately affect the sales pipeline. We are not disputing the value of analyzing the sales pipeline, simply the ability to directly manage it. Sales Metrics and their Value to Management
These are the outcomes of multiple
objectives, and they cannot be
‘managed’ whatsoever
Business Results
Metrics with high value in Reporting
These are objectives that can be
influenced, but only by managing their
preceding Processes
Sales Objectives
Metrics with high value in
Diagnosis and Planning
These are salesperson and manager
activities that we can proactively direct
and manage
Sales Processes
Metrics with high value in Managing
Copyright © 2010 Vantage Point Performance, Inc.
10
Check Point: Sales Metrics Let us restate the conclusions that we have drawn so far from our analysis of sales metrics: • When measured by how ‘manageable’ they are, there are three levels of sales force metrics: o Sales Process metrics, which are highly manageable o Sales Objective metrics, which are indirectly manageable through the management of Sales Processes o Business Result metrics, which are not manageable whatsoever – they are only influenced by achieving certain Sales Objectives • There is a linear causal relationship between the levels o Sales Processes Æ Sales Objectives Æ Business Results • A well‐managed sales force will collect metrics at all three levels – each used for a different purpose: o Metrics on Sales Processes to help manage the sales force o Metrics on Sales Objectives to help the company diagnose and plan o Metrics on Business Results to help the company track overall success At this point in our analysis, we had reached some very insightful conclusions about
the types and uses of sales force metrics. However, we had not yet accomplished our
objectives of determining which metrics are most meaningful for an individual sales
leader and how those metrics can be used to drive predictable improvement. To
understand these issues, we would have to dive deeper into each type of metric.
Copyright © 2010 Vantage Point Performance, Inc.
11
What We Learned about Sales Processes
commercial time management methodologies, but in
practice these activities most often take the form of
weekly meetings between a salesperson and their
manager to schedule and discuss upcoming calls and
meetings. Success here is typically measured by the
number or percentage of tasks that are completed.
During our careers, we have heard the term ‘sales
Second is the Call Management process. This process
is intended to help salespeople plan for specific
customer interactions – their desired outcomes for the
call, questions they might ask, objections they might
expect, products they might propose, etc. The
primary measure of success here is to achieve the
desired call outcome, though process compliance can
also be tracked by the manager like every other
process on this list.
process’ used in as many ways as one can imagine.
“Do you have a formal sales process?” we will ask.
The replies always come, “Oh yes, we use this
process,” or “Oh yes, we use that process,” or “Oh
yes, we use a combination of this and that.” Sales
process, it seems, means something different to
everyone.
The obvious conclusion is that there is no universal
sales process. Sales forces are, in fact, a collection of
distinct processes – each working to accomplish its
own end. In truth, we reached this conclusion many
years ago, but our analysis and consideration of the
above-mentioned metrics helped us to put a finer
point on our thoughts. Most specifically:
If we string together a series of calls in pursuit of a
single sale, then you have an ‘opportunity.’ An
Opportunity Management process helps salespeople
plan and execute thoughtful approaches to long,
complex sales. Often confused with ‘pipeline
management,’ this process is not an analytic exercise
to pinpoint failures in a collection of ongoing
opportunities – this is an assessment and planning
effort to deliberately win an individual sales pursuit.
Success is measured by how successfully the plan is
executed, as well as the eventual outcome of the
pursuit.
1. How many sales processes actually exist in
the world?
2. How do you know which (if any) of the
processes are needed in your sales force?
How Many Sales Processes Are There?
Distribution of Sales Process Metrics
After examining all of the metrics we had labeled
as ‘Sales Process’ measures and asking ourselves
which activities they intended to measure, we were
able to identify six distinct selling processes that
encompassed all of the process metrics in our
research. Listed in the table below are the
individual processes along with a brief statement
of purpose and a sample metrics for each.
30%
First we have a Time Management process.3 This
is a set of activities that helps a salesperson to plan
and prioritize their tasks for a given period of time
– most commonly a week. There are many
0%
26%
25%
20%
15%
22%
17%
13%
13%
9%
10%
5%
Time Mgmt Call Mgmt Opportunity Account Mgmt
Mgmt
Territory Mgmt
Sales Mgmt*
3
You will note that we have elected to use common terminology for these processes rather than try to trademark awkward new terms. Hopefully
this will make them easier to grasp and will not confuse you with meanings that you might already have associated with the terms.
Copyright © 2010 Vantage Point Performance, Inc.
12
If there are multiple opportunities over time with a
single customer, then we have an ‘account.’ An
Account Management process helps a salesperson
assess their position within an account and coordinate
among internal and customer resources to grow the
long-term value of that customer. Success here is
typically judged by retaining and growing the
account, as well as achieving various other selling
objectives.
If we are assigned a group of accounts or prospects,
then we have a ‘territory.’ Note that a territory does
not necessarily need to be geographically defined – a
salesperson could be assigned accounts that are
chosen in many ways (industry, customer segment,
etc.). Regardless, a Territory Management process
helps salespeople and their managers decide how to
allocate their time across a large group of customers.
Success here could be measured by how many
accounts each rep is assigned, whether the accounts
comprise the desired mix of customer types, and how
well the salesperson performs at covering the
accounts with the intended frequency.
Finally, there is a Sales Force Management process.
This process has the largest scope of the six, since it
is very diverse by nature. Sales management
activities include recruiting, selecting, training,
motivating, coaching, rewarding, and providing tools
that enable the sales force’s performance. This
Sales Process 1. Time Management process is typically spread across several people and
departments, including sales, HR, and finance.
Typical metrics in this case track the expenditure of
resources on training programs, information
technology, recruiting, coaching, and other sales
management activities.
Most of the companies to whom we have consulted
over the years have used some form of sales process,
whether purchased ‘off-the-shelf’ from a process
vendor, developed internally by their own staff, or
designed in collaboration with outside advisors.
However, the scopes of their process would not have
fit neatly into one of these six categories. In fact, it is
our experience that most companies with formal sales
processes have assembled a mish-mash of activities
and tools that incorporate elements from each of
these processes.
This is not inherently a problem, if the mélange of
processes in fact fits the way their sales force
operates. Frequently, though, companies have
selected their formal sales process in one of two less
satisfying ways. Either they fell victim to a good
salesperson from one of the many process vendors, or
they chose to recycle a methodology that a sales
leader had used at a previous company. In our
opinion, this is doing a disservice to the organization.
The decision to implement one or more of the above
processes should be very deliberate and driven by the
Purpose Identify, prioritize, plan, and track key tasks
Sample Metrics • # of Tasks Completed in a Time Period
• % Time Allocated across Tasks 2. Call Create successful outcomes to specific Management customer interactions • % of Reps Complying with Process
• % of Successful Call Outcomes 3. Opportunity Initiate, qualify, advance, and close multi‐
Management stage sales • % of Reps Complying with Process
• % of Reps Using Tools • % of Objectives Met 4. Account Maximize long‐term value of select customers
Management • % of Reps Complying with Process
• % of Reps Using Tools • % of Objectives Met 5. Territory Management •
•
•
•
•
•
•
Deploy optimum levels of resources against various types of customers and prospects 6. Sales Force Staff, motivate, train, and equip the sales Management force for success Copyright © 2010 Vantage Point Performance, Inc.
# of Accounts per Rep % Prospects vs. Active Customers % of Time Spent Coaching Hrs of Training per FTE $ on IT Systems per FTE Span of Control Combined Metrics of Direct Reports 13
sales force’s unique needs.
But in fairness to the many sales executives who have
chosen somewhat misfit sales processes, there has
been no real guidance as to which processes are
relevant for which types of sales forces. Vendors sell
what they have, and executives buy what feels right.
Therefore, one of the outcomes we hoped for our
research was to provide some such guidance on the
selection of a suitable sales process. Otherwise, it
would be impossible to contend that the metrics
being used to manage the sales force are truly
relevant or useful. This leads us back to the
fundamental question that precedes good
measurement and management:
How do we know which sales processes
are right for a given sales force?
Which Sales Processes Do I Need?
Looking at the list of six sales processes and their
associated metrics, it was immediately obvious to us
that not every sales force would need to put in place
(nor could they endure) all of the sales processes and
metrics. There must be a logical way to identify
which sales processes are most critical for a
particular sales force.
Our first thought was that company demographics
would inform which processes would be important
for its particular sales force. For instance, if a
company’s profits are highly concentrated in a
handful of accounts, then that company must need
Account Management processes. Or if a company’s
sales force is arranged geographically, then they must
need Territory Management processes. However,
when we reflected on the work we had done with past
clients and the previous research we had conducted
into the best practices of world-class sales forces, we
realized that this approach was too simplistic. We
needed a more focused view to select and implement
the appropriate sales processes.
We determined that sales processes should never be
selected at a company-wide level, though they so
frequently are. The need for a specific sales process
is determined by the nature of each distinctive selling
role. That is, companies don’t need Account
Management processes – only those people who
manage major accounts need them. Companies don’t
need Territory Management processes – only those
salespeople who must selectively call on customers
need them. Sales process selection is therefore not a
decision to be made by examining the enterprise – it
Copyright © 2010 Vantage Point Performance, Inc.
Sales Processes for All! No Wait … We were once working with a very large consulting firm when a major sales process vendor remarkably sold the firm a suite of licenses to their Account, Opportunity, and Call Management templates (Note: We were not consulted on the decision). The vendor and the firm’s management agreed that all consultants should be trained in each of the three processes, without any consideration to the different selling (and non‐selling) roles within the organization. It wasn’t until the vendor revealed the multi‐million dollar price tag for several thousand licenses that the management team began to scrutinize who actually managed accounts, pursued opportunities, or made sales calls. Ultimately, the number of licenses was pared back so far that only a handful of people in the firm could actually use the processes – rendering the entire exercise basically useless. Avoid this fate by being exceptionally deliberate in assessing which types of selling roles you have in your organization and determining which processes, tools, and metrics are needed to manage them successfully. is a decision best made by examining the role. Below
we provide rule-of-thumb guidelines for when a
particular process is appropriate for a particular role.
Note that it is not the title of the role that indicates
which processes are important. For example, just
because a salesperson has the title ‘Sales Manger’
does not mean that they require a Sales Management
process. Nor does a salesperson whose business card
reads ‘Account Manager’ necessarily require an
Account Management process. You must examine
the nature of their selling activities to determine
which processes are applicable, or even critical, to
the execution, measurement, and management of that
selling role.
It is absolutely crucial that sales leadership
understands the six types of sales processes and their
unique applications to distinct selling roles. We have
often seen sales processes implemented for the wrong
(or unknown) reasons with very predictable
outcomes. First, the processes are ignored by the
sales force. This can result from processes that are
14
Sales Process Applicability to a Selling Role 1. Time Management • There is high variability in the salesperson’s daily activities
• The salesperson has an efficiency‐driven role: More Effort = More Sales4 2. Call Management • The salesperson has a low to moderate volume of highly varied customer interactions • The salesperson is targeting customers with complex buying processes (numerous buying stages and/or multiple buyers with varying buying needs) • The salesperson is pursuing opportunities over time with the same customer
• There is an economic justification for an added layer of effort 3. Opportunity Management 4. Account Management 5. Territory Management • The salesperson makes proactive customer contact and cannot service all potential customers • The salesperson or manager needs to prioritize the selling effort and allocate it across different types of customers 6. Sales Force Management • The manager has authority to influence or direct decisions in the hiring, training, measuring, coaching, motivating, rewarding, and enabling of the sales force over-engineered or badly designed, but it is just as
often because the processes being implemented are
not relevant for the selling roles onto which they are
being inflicted.
Second, sales management can spend an insane
amount of time trying to enforce the processes and
explaining to senior management why they are not
realizing the promised ROI on the newly
implemented processes and tools. The
investment required to design and deploy sales
processes is not trivial, and deploying the
wrong ones only compounds the costs. In fact,
it might be better to have no formal processes
than to implement the wrong sales processes.
processes to plan, execute, and track their day-to-day
selling tasks. Sales managers should first ensure that
their salespeople are using the processes
appropriately and measure salesperson compliance.
Managers can then use the processes as a means to
coach their salespeople, helping them to plan and
debrief their selling activities, while developing the
salespeople’s ability to achieve successful outcomes
on their own.
Using Processes and Metrics to Manage Your Sales Force
Coach to the Process
Using Processes to Manage and Coach
Measure
Compliance
and Success
We strongly believe that using sales processes
and metrics to manage your sales force is the
only way to drive predictable execution. In
fact, the processes should be the framework for
most, if not all, of your sales managers’
coaching activities.
Manager
Account Plan
Depending on their selling role, your
salespeople should be using relevant sales
Sales Role 1
Call
Plan
Sales Role 2
Opp’ty
Plan
Sales Role 3
4
Sales managers must be exceedingly careful with the assumption that more effort on a salesperson’s part will result in more sales. Most sales forces
are managed with this mentality, but in reality the percentage of roles where this holds true is shrinking as more and more salespeople become valueadded consultants rather than feet-on-the-street marketing impressions. Increasingly, it is more important to work smart than to work hard.
Copyright © 2010 Vantage Point Performance, Inc.
15
Check Point: Sales Processes Let us once more pause to review what our research has revealed about Sales Processes: • There are six discrete Sales Processes: 1. Time Management 2. Call Management 3. Opportunity Management 4. Account Management 5. Territory Management 6. Sales Force Management • Each of these processes has its own purpose, metrics, and applicability • Which Sales Processes you need in your sales force is determined not by any characteristic of your company or sales force, but by the nature of each individual selling role • To proactively manage your sales force: o Implement the right processes o Use the processes as your framework for coaching o Measure compliance and successful outcomes Finally in our analysis, we had begun to make some headway against our first research
objective – to understand which metrics are important for any given sales leader. While
we had two more levels of metrics yet to explore – Sales Objectives and Business
Results – we were now able to provide some guidance to sales executives. By examining
the nature of the selling roles in your organization, you can identify the types of
processes and accompanying metrics that will provide you with insight into the groundlevel activities of your sales force.
Copyright © 2010 Vantage Point Performance, Inc.
16
What We Learned about Sales Objectives
increase the capacity of your sales force to cover
more prospects and customers.
Metrics of Salesperson Capability (which could also
be labeled Sales Force Effectiveness) tell you how
successfully that effort is being applied. That is, if
your salespeople have eight hours of Capacity each
day to spend with prospects and customers, how
successful are they during those customer
interactions? Salespeople are generally considered to
be capable if they can successfully advance
opportunities, win deals, or accomplish other desired
outcomes of their customer-facing activities.
We chose to call these ‘Sales Objectives’ because
they are goals toward which selling effort is directed.
They are outcomes of the effort, and consequently
they cannot be managed or directed with the same
level of control as selling activities or processes.
They can be managed only indirectly at the Process
level.
(Note that Salesperson Capability is not the same as
salesperson skill. Capability includes the skill of the
salesperson, no doubt, but it is also a reflection of
selling tools, motivation, and other components that
affect the effectiveness of a salesperson.)
For example, a Sales Objective might be to increase
the skill level of your sales force. This could be
accomplished through several activities, such as
increasing the amount of sales training or recruiting a
higher caliber of salespeople. Another Sales
Objective might be to increase your number of new
accounts, which could be achieved by putting greater
effort into cold calling or by visiting more prospects.
You cannot direct a salesperson to be more skilled or
to have more new accounts, but you can set an
Objective and manage the related activities. Again,
managing Sales Processes leads to achieving Sales
Objectives.
The next two Sales Objectives are elements of a
sound marketing strategy. Metrics of Product Focus
report whether a sales force is selling the products
and services that are deemed optimal to the company.
These could be products with higher profitability or
products with some strategic value, such as a new
line of products.
How Many Sales Objectives Are There?
Just as we used our collection of Sales
Process metrics to isolate distinct processes,
so we used our Sales Objective metrics to
discern five categories of Objectives into
which most of the measures fell. The
Objectives are listed below, along with a
brief description of each one’s purpose and
sample metrics from our research.
The first two Sales Objectives basically
provide the math for overall sales force
productivity. Metrics of Sales Force
Capacity (which could also be labeled Sales
Force Efficiency) tell you how much effort
you are getting from your sales force. By
increasing the number of salespeople you
have in the field or the percentage of their
work day that is ‘productive,’ you can
Copyright © 2010 Vantage Point Performance, Inc.
Distribution of Sales Objectives Metrics 60%
51%
50%
40%
30%
19%
20%
10%
14%
14%
3%
0%
Sales Force Capacity
Salesperson Product Focus
Capability
Customer Human Capital
Focus
17
Sales Objective Purpose Sample Metrics Sales Force Capacity Ensure there is enough total selling effort to • % Productive Time for Reps
cover all desired customers/prospects • % of Market Opportunity Covered • % Vacant Positions Salesperson Capability Ensure that salespeople are using their
capacity effectively during their individual customer interactions Product Focus Ensure the sales force is selling the products • % of New vs. Existing Products
and service that the company wants to sell • % of Cross‐Selling/Up‐Selling • Average Deal Size Customer Focus Ensure the sales force is obtaining, retaining, and growing the customers that the company wants to have • % of New vs. Existing Customers
• % Customer Retention • % Share‐of‐Wallet Human Capital Ensure a skilled, well‐equipped, satisfied sales force • Average Skill Level of Reps
• % Sales Force Turnover • # Months Ramp‐Up Time Metrics of Customer Focus reveal whether the sales
force is attracting, retaining, and growing the
company’s targeted customers. Examples could be
customers that are either more profitable or
customers that are somehow strategically important,
like those in a new market or geography. Focusing on
selling the right products to the right customers is an
essential part of any company’s go-to-market strategy
… or at least it should be. These metrics allow you to
measure success in achieving those Objectives.
The final type of Sales Objective encompasses key
measures of a sales force’s Human Capital. This is a
bit of a catch-all term, particularly in human
resources circles, but we use it here specifically
because it does capture a broad range of issues. All
of the hiring, training, motivating, rewarding, tooling,
and coaching that takes place in the Sales Force
Management process show up here as a more skilled,
more potent, and more engaged workforce. A
problem with Human Capital measurements has
always been the difficulty of quantifying success, but
the metrics that we observed in our research such as
Percentage of Turnover, Number of Months RampUp Time, and others are easily quantifiable and
capture quite well the Outcomes of the underlying
activities.
As we looked at the distribution of metrics in the
survey, we found that the majority of the Sales
Objectives were focused on the customer. This
Copyright © 2010 Vantage Point Performance, Inc.
• % of Calls Advanced • % of Deals Won • # of Deals with Discounts resulted from an overwhelming number of
measurements geared toward acquiring, retaining,
and increasing the value of customers. Of course, we
cannot argue with the dominance of Customer Focus
metrics in our research – above all, sales is about the
customer.
However, we were surprised with the almost
insignificant number of metrics focused on Sales
Force Capacity. We read a study several years ago
that asserted most sales forces have too few
salespeople to accomplish their stated market
objectives. We found that observation thoughtprovoking at the time, and our research would lend it
more credence. Whether or not most sales forces are
actually operating below their ideal capacity, we
can’t know for sure. But we would wager fairly
confidently that those sales forces don’t know either.
This is an amazingly powerful category of metrics to
collect, since it allows sales leaders to identify
uncovered opportunity and to justify hiring additional
sales reps. If you feel that your sales force is
underrepresented in your target markets, go get these
numbers.
A Sales Management Treasure Map?
Recall that one of our first observations about Sales
Objectives was that they cannot be directly managed.
We concluded that Sales Objectives could only be
influenced by directing specific activities within the
18
more manageable Sales Processes. Shortly after we
identified the five Sales Objectives, we began to look
for some way to relate the Objectives back to the
Processes in a systemic fashion.
We knew intuitively that account planning should
lead to increased Share-of-Wallet and that increased
training should lead to a higher Average Skill Level.
But if we could not find a more rigorous relationship
between the Processes and Objectives, then our
‘system’ of management would begin to look more
like a layer cake with sheets of steel separating the
layers. Fortunately, as we stared at the metrics day
after day, the separation between the layers began to
disappear. We started to cut slices in the metrics a
few at a time until we eventually had two layers of
metrics with clearly-defined relationships.
We found that the Sales Processes do have direct
causal relationships with the Sales Objectives. More
specifically, certain Sales Processes influence certain
Sales Objectives. Our finding means that if you have
a Sales Objective, say to sell new products, you now
know exactly what to do to achieve that Objective.
You track backward to the Processes that have an
impact on that Objective, and then you manage the
activities within that process. See the ProcessObjective map below for more detail.
Suppose that you set an Objective for the year to
improve your Customer Retention Rate. You are
trying to affect a Customer Focus metric, so there are
four Sales Processes with manageable activities that
can influence such an outcome. First, the Sales Force
Management tools of compensation and coaching
could be used to shift the focus of your reps toward
servicing existing customers. Second, you could use
your Territory Management process to allocate more
time to those customers. Third, you could put
Account Management processes in place, if they
don’t already exist, to help your salespeople become
more intimate with key customer issues. If you have
an Opportunity Management process in place, you
could alter the qualification guidelines to limit the
number of new customer pursuits. And of course,
your sales managers would measure each processes
to track that it is being followed and successfully
executed in the field.
Or, suppose that you set an Objective to increase the
Percentage of Proposals Won. If your salespeople are
in charge of the proposal generation and presentation
activities, then this would be a Salesperson
Capability metric. Looking at the chart, there are four
Sales Processes that could potentially affect his
Objective. First, there are Sales Force Management
activities you could select, such as providing
proposal templates or training the salespeople on how
to craft a winning document. Second, you might put
an action item in your Account or Opportunity
Certain Sales Processes Drive Specific Sales Objectives
Sales Force Capacity Salesperson Capability Product Focus
Customer Focus
Human Capital
Sales Force Mgmt Territory Mgmt
Account Mgmt Opportunity Mgmt Call Mgmt Time Mgmt Copyright © 2010 Vantage Point Performance, Inc.
19
Shouldn’t the Metrics be Mutually Exclusive? One might look at these five Sales Objectives and notice that many of them could relate to one another. For instance, increasing the Average Skill Level of the sales force could improve its Percentage of Deals Won. In fact, you would hope so. Or pursuing products with a larger Average Deal Size could have the opposite effect of decreasing the Percentage of Deals Won, though you would hope not. The fact is that many Sales Objectives could influence others, which is fine. The point of separating the Objectives from the Processes was not to create a level of mutually exclusive metrics, it was to emphasize that Objectives cannot be managed directly. Though Average Skill Level may influence the Percentage of Deals Won, you cannot directly manage either of them. You must dip down into the Sales Processes to find a manageable activity that will drive improvement in the level of skills (like more training) or even an activity that will improve the win rate (like better call planning). Remember that our goal is to find ways to measure and manage our salespeople toward Sales Outcomes, not to devise an overly complex system of metrics. Management processes to have each proposal
reviewed by all key stakeholders prior to its
submission. Or perhaps you would place action items
in your Call Management processes to ensure that a
manager is involved in the planning of any meeting
where a proposal is presented. Again, measuring and
managing all the while.
As you can see from the diagram, Sales Management
processes are relevant to every category of Sales
Objective, since training, coaching, compensation,
and other tools can have an effect on any Outcome.
However, Account Management processes will not
help an organization increase its Sales Force
Capacity. Territory Management processes cannot be
used to influence metrics of Salesperson Capability
or Product Focus. Depending on the selling roles in
your sales force and consequently the Sales Processes
that you have in place, there are different but
predictable ways to manage your sales force so that
specific Sales Objectives can be achieved.
Of course, management’s judgment must be used in
all practical cases to identify the best course of action
5
to influence a given Sales Objective. But these
Process-Objective relationships demonstrated here
are useful departure points for good managerial
decision-making.
The Missing Link in Sales Management?
By establishing a causal link between Sales Processes
and Sales Objectives, we gained insight into what we
think has been the missing link in sales management:
The ability to set specific Sales Objectives
and then manage day-to-day activities
to predictably attain those Objectives
At the risk of sounding cynical, the annual cycle of
sales management has looked somewhat like this to
us:
Each year new Sales Objectives are announced –
for example, let’s say that this year a new product
line is being launched. At the annual sales kickoff meeting, a new compensation plan is
implemented with juicy, attention-grabbing
incentives for the sales force to sell the new
products. Hunters and farmers5 alike are highly
motivated to sell the new products. But will they
be highly managed?
At the end of each quarter, the sales numbers for
the new product line are reported, and they are not
good. Management is very concerned and
continues to reinforce the lucrative compensation
for selling the new products – perhaps even
throwing in a special incentive to kick-start the
sales. Nothing. At the end of the year, sales for the
new product line have been lackluster. What else
could have been done?
Here is a way this might have happened differently in
a world of highly managed Sales Processes that are
linked to Sales Objectives:
The new Sales Objective comes down from above
– sell this new product line. The enlightened sales
managers of course announce the new
compensation plan, but they will not take the risk
of simply ‘managing by incentive’. They know
how important it is for the company to achieve
this Objective, and they will ensure that it is
attained by managing their salespeople
aggressively.
First, they provide training on the new product
In classical sales terminology, hunters are salespeople who pursue new customers, while farmers are sellers who nurture and grow existing accounts
Copyright © 2010 Vantage Point Performance, Inc.
20
line – both how to sell it and why prospects will
want to buy it. Training is a Sales Force
Management activity that is controllable and will
lead to a sales force’s increased ability to sell the
product.
Second, since the farmers’ role is to maximize the
long-term value of the company’s most important
customers, they would already have in place
formal Account Management processes. The sales
managers would direct the farmers to include in
every account plan the action item of introducing
the new product line to their accounts during the
first quarter of the year. Then the managers coach
persistently to ensure that the action items are
completed.
new product. You first identify which Sales
Processes can influence the Objective, like an
Account Management process to help sell the product
to existing customers. Next, you embed the Sales
Objectives in the planning activities of that Sales
Process, then measure and manage the Processes
persistently to achieve the Objective. Processes
provide you with a mechanism to translate sales
strategies into selling activities.
Third, since the hunters’ role is to pursue large
and complex sales, they already would have in
place formal Opportunity Management processes.
The sales managers would then direct the hunters
to include in every opportunity management plan
the qualifying criteria of whether the prospect
might be a candidate for the new product line. If
so, the new product must be included in the onsite demonstration, and the managers would coach
persistently to ensure that the new product demos
took place.
In our new scenario, the sales force is still motivated
to sell the new product line because of their new
incentive compensation. But in addition,
they have been trained on how to sell the
products, and they have formal plans to
introduce the new product line to each of
their accounts and prospects. And, the sales
managers are coaching toward the Sales
Objective and measuring the completion of
the related tasks as outlined in the Account
and Opportunity Management processes.
The clear and linear connection between
Sales Processes and Sales Objective is the
missing link that enables systemic and
proactive sales management for those who
want it.
Using Processes to Achieve Sales Objectives
New Sales Objective
Embed the Objective in the Processes and Coach
Measure
Compliance
and Success
Manager
Using Processes to Achieve Sales
Objectives
Once you have the right Sales Processes in
place for each of your selling roles, you
then have a means to adapt your selling
effort in response to new Sales Objectives.
Suppose you want to achieve a new Sales
Objective, such as increasing the sales of a
Copyright © 2010 Vantage Point Performance, Inc.
Account Plan
Sales Role 1
Call
Plan
Sales Role 2
Opp’ty
Plan
Sales Role 3
Embed Objectives Here
21
Check Point: Sales Objectives Let us again pause to review what we have learned about Sales Objectives: • There are five types of Sales Objectives: 1. Sales Force Capacity 2. Salesperson Capability 3. Product Focus 4. Customer Focus 5. Human Capital • Each of these Objectives has its own purpose and associated metrics • The metrics within each type of Objective are influenced by specific Sales Processes that have a causal relationship with the Objectives • To achieve a specific Sales Objective, you must: 1. Identify which type of Sales Objective you want to change 2. Set target metrics for your Objective 3. Identify which Sales Processes can influence the Objective 4. Embed the Sales Objectives in the planning activities of those Sales Processes 5. Measure and manage the Processes persistently to achieve the desired Objectives At this point in our research and analysis, we felt that we had essentially developed a
new management system that was both highly structured and highly flexible. By
embedding Sales Objectives in the day-to-day Processes of the salespeople and
managers, executives now have a means to set strategic direction for the sales force
and know with confidence that the first-line sales managers can both communicate the
strategy and measure its successful implementation. The only task remaining was to
link Sales Objectives to the final category of sales metrics –
Business Results.
Copyright © 2010 Vantage Point Performance, Inc.
22
What We Learned about Business Results
ever-popular measures of Sales Pipeline. These
measurements capture the size, shape, and length of
the active opportunities within a sales force. Again,
in our opinion a Sales Pipeline report is effectively a
forward-looking, probability-weighted financial
statement. In fact, we originally included these
metrics in the category with other Financial
measures, but we appreciate that there is a distinction
in most people’s minds, and we thought it instructive
to set them apart in this analysis.
At the top of our hierarchy of sales force metrics is
Business Results. As the highest order of metrics,
they are influenced by all of the Sales Processes and
Sales Objectives that lie below. In fact, they are such
aggregate measures of business performance that
they are influenced by many factors outside of sales’
control. Regardless, sales is undoubtedly the function
that has the greatest sway over these metrics –
particularly in business-to-business markets.
Employee Satisfaction was also popular, though we
have already mentioned our opinion on measuring
general satisfaction. Interestingly, some of these
metrics were narrowly focused in specific areas, such
as Satisfaction with Information Technology. In line
with our comments about Customer Satisfaction, the
more targeted the measure, the more comfort we have
with it.
As with Sales Processes and Sales Objectives, we
analyzed the metrics that comprised Business Results
and found that there were several categories into
which the metrics tended to cluster. In this case, we
found five types of Business Results.
To us the biggest surprise was the nearly insignificant
mention of Market Share measurements. At least in
our experience, Market Share is a metric that many
sales forces track - not only for general business
reporting, but also for use in the incentive
compensation plans of individual salespeople. We are
not necessarily advocating the inclusion of Market
Share in salespeople’s incentive plans, but it
underscores the importance with which some
companies and industries view it.
As you can see from the chart below, nearly half of
all the metrics reported were Financial in nature.
These were primarily measures of revenue, though
there were several cost and profit measurements cited
as well. Included in this group was also quota
attainment, which we characterize as a metric
focused on meeting a targeted Financial result,
whether revenue, profit, or unit volume.
Interestingly, Customer Satisfaction was the second
most commonly mentioned type of metric.
While we generally put very low value on
measures of general ‘satisfaction,’ this could in
fact be a fairly meaningful metric for sales roles
that include a large post-sale or customer service
component. If this type of metric is used to
judge the sales force’s performance, we hope
that it is collected in a highly targeted fashion
where the results can be tracked to individual
salespeople or teams. Otherwise, it can be a very
misleading indicator of performance. (Note: We
do believe that timely and explicit customer
feedback is critical to managing change – it is
just generalized levels of ‘satisfaction’ that we
find dubiously useful.)
Distribution of Business Result Metrics
60%
49%
50%
40%
30%
17%
20%
19%
11%
10%
4%
0%
Financial
Sales Pipeline
Customer Satisfaction
Employee Market Share
Satisfaction
The third most cited Business Results were the
Copyright © 2010 Vantage Point Performance, Inc.
23
Business Result Definition Sample Metrics Financial An accounting‐related measure of cost, revenue, or profit •
•
•
•
Sales Pipeline Projected revenue or volume – typically broken into several stages of the Opportunity Management process • $ Total Pipeline Revenue
• Length (Days) of Sales Cycle • $ in Each Stage of Sales Cycle Customers Satisfaction The customers’ perception of a company overall or of a specific aspect of the company’s products, services, or relationship • % Satisfied or Dissatisfied • Satisfaction Index Employee Satisfaction The employees’ perception of their employer overall or of a specific aspect of their job • % Satisfied or Dissatisfied
• IT Satisfaction Index Market Share Percent of targeted opportunity that has been captured by the company • % Market Share Got Roots?
Unlike the previous two levels of sales metrics
where we were able to simplify the management
challenge by isolating clear cause-effect relationships
between specific types of Processes and Objectives,
Business Results are such broad measures that they
defy such satisfying insight. To understand what
levers need to be pushed or pulled to move metrics
such as Revenue or Market Share, we find ourselves
without much of a shortcut. In this case, we must fall
back onto the traditional management exercise of
conducting root cause analyses to understand what
Sales Objectives will have the biggest impact
on a selected Business Result.
$ Revenue $ Cost‐of‐Sale % Revenue Growth Rate $ Profit per FTE could choose to help me achieve that Result.
Depending on the situation and market dynamics, I
might select to boost my Sales Force Capacity, which
would enable my sales force to do more of what
they’re already doing. I might choose to increase my
‘win rate’ by improving my Salesperson Capability. I
could choose to offer new products which would
require a shift in Product Focus. I could target new
customers, which would entail reallocating my
Customer Focus. And any of these options might
require increasing skill level, which would affect my
Human Capital Objectives.
Linking Financial Metrics to Sales Objectives
Financial Metrics
Financial Metrics
Dissecting Financial metrics is an accounting
exercise … to a point. As shown in the chart
below, Profit is comprised of Revenue and
Costs. Revenue is furthermore comprised of
Unit Volume and Unit Price. However, we
quickly come to the point where our
accounting definitions can take us no farther.
We are forced to use our own analysis and
judgment as to which Sales Objectives will
have the greatest impact on our desired
Financial metric.
Profit
Revenue
Volume
Price
Cost
Which Sales Objectives?
Sales Force Capacity
Salesperson Capability
Product Focus
Customer Focus
Human Capital
For example, if I decide that increasing sales
Volume is my Financial metric of choice,
then I have several possible Sales Objectives that I
Copyright © 2010 Vantage Point Performance, Inc.
24
Or say that I decide Price is the Financial lever I want
to pull. I could attempt to limit the amount of
discounting by my salespeople (if they have pricing
authority), which would require an increase in
Salesperson Capability. Or I could shift selling effort
toward higher priced products, which would alter a
Product Focus Objective. I could also pursue a
segment of customer that I know to be less price
sensitive, which would be a shift in Customer Focus.
And again, any of these might require altering my
Human Capital Objectives in some way.
In short, changing a Financial metric requires some
analysis to understand which Sales Objectives are
most capable of moving the needle. Of course, once
you choose your Sales Objective and set new target
metrics, then you must look to your Sales Processes
to determine what your sales managers must do
differently in the field to achieve the Sales Objective
target.
Linking Pipeline Metrics to Sales Objectives
Measuring the Opportunity Management Process…
Sales
Opportunity
Step 2
Step 3
Step 4
Step 5
Process
Milestones
Performance
Metrics
%
%
%
%
Allows you to identify points of failure...
100%
75%
… And here
we are
losing 35% !
Leads
50%
We are
losing 25%
of our
leads in
this step…
25%
(Note that Market Share, which is typically measured
in Revenue or Volume would be evaluated in an
identical fashion, so we will not examine it
separately)
Sales Pipeline Metrics
Step 1
0%
Step 1
Step 2
Step 3
Step 4
Step 5
And improve Salesperson Capability
Improved performance at
critical steps in the process …
100%
75%
Dissecting Sales Pipeline metrics is very similar to
the analysis we would do for Financial metrics, since
the metrics are also similar (primarily Revenue). The
sales pipeline is simply forward-looking while actual
revenue is historical. If you decide that your pipeline
is too small, then you can explore the same options as
boosting Revenue – more capacity, higher capability,
different products, different customers, or a rewired
workforce. The one thing about Sales Pipeline
measurements that differs from Financial metrics,
though, is the level of detail with which you can do
the analysis.
Pipeline metrics break ‘Revenue’ into smaller pieces,
which align with different stages of the sales cycle.
Rather than just looking at realized Revenue, you can
(ideally) isolate where potential revenue is leaking
from the selling effort.
This is an incredibly powerful piece of analysis, if
opportunities are tracked in the proper way.
Understanding where the failure points are in your
selling effort allows you to set Sales Objectives that
improve Salesperson Capability at those critical
points of failure. Then, of course, you can identify
which Sales Processes (ostensibly Call Management)
6
Leads
50%
25%
0%
Step 1
Step 2
Step 3
Step 4
Step 5
will eliminate the failures and boost future Revenue.
Customer and Employee Satisfaction
Measures of ‘satisfaction’ are perhaps the murkiest of
all metrics. Foremost, the sources of satisfaction or
dis-satisfaction are as varied as the number of
interactions anyone might have with your company
(inside or out), so pinpointing actionable
opportunities for improvement can prove elusive.
But more importantly, research shows that
satisfaction is not a leading indicator of customer
loyalty, despite the implication. In research
conducted by HR Chally, more than 80% of
customers who defected from their suppliers ranked
that supplier as either “Good” or “Very Good.”6
Howard Stevens, CEO, HR Chally Group, 2008
Copyright © 2010 Vantage Point Performance, Inc.
25
Consequently, we put very little faith in the
usefulness of these metrics. But if you must collect
them for one reason or another, then again our
guidance is to make them as specific as possible in
the scope of their inquiry.
Putting It All Together
In sum, Business Result metrics are very high-level
indicators of the health of a company, and they are
influenced by a great number of things. To exert any
influence over their improvement, you must invest
the resources to analyze the root causes of poor
performance and the true drivers of potential
improvement. If done well, you will be able to isolate
the Sales Objectives that will affect the Business
Results, and then manage your sales force at the
Process level to proactively affect change.
A Word About Budgeting and Forecasting Budgeting and forecasting are critical business activities that are required to run any company – particularly one whose profitability depends on closely matching its production capacity with its anticipated demand. However, they are typically low‐
value‐added activities for the sales force, and ones that consume a great deal of time and energy. Sales forces with well‐defined processes are able to produce less invasive and more accurate budgets and forecasts, because they are effectively embedded in their Opportunity, Account, and Territory Management activities. Most sales forces have some form of Opportunity management processes in place for the purposes of reporting ‘pipeline’ forecasts. But for companies whose profitability is highly concentrated in a small number of customers, there should be key account managers who put informed revenue and volume goals in their account plans each year (or other reporting period). Alternatively, companies with a highly dispersed customer base should have territory managers who put considered revenue and volume goals in their territory plans. Frequently, these Territory and Account level forecasts are more accurate than those done at the Opportunity level. Therefore, there is an additional benefit to implementing and managing to good sales processes – improved financial reporting. Putting It All Together
Business
Results
Financial Metrics
Pipeline Metrics
Customer Satisfaction
Employee Satisfaction
Market Share
Sales
Objectives
Sales Force Capacity
Salesperson Capability
Product Focus
Customer Focus
Human Capital
Sales
Processes
Call
Management
Account Management
Sales Force
Management
Time
Management
Opportunity Management
Territory
Management
Copyright © 2010 Vantage Point Performance, Inc.
1. Identify the Results you want to achieve
2. Select Objectives that will lead to those Results
3. Embed the Objectives in the relevant Processes, and manage the processes relentlessly
26
Check Point: Business Results One last interlude to review what we have learned about Business Results: • We found five types of Business Results: 1. Financial 2. Sales Pipeline 3. Customer Satisfaction 4. Employee Satisfaction 5. Market Share • Business Results are the highest level of metrics and are affected by many influencers • To improve metrics of Business Results, you 1. Isolate the root cause of the problem or the key driver of improvement 2. Identify the Sales Objective that will most affect the desired metric 3. Manage the Sales Processes that will help you achieve the Objective At the conclusion of our analysis, we had identified three levels of sales force metrics
and successfully organized them into a new system of management that will allow
executives to select Business Results that they want to improve, identify which Sales
Objectives will help them achieve their desired results, and embed those objectives in
relevant Sales Processes that front line sales managers can then direct and measure.
This top-down, metrics driven approach to sales management should provide
executives with greater control, visibility, and confidence in their sales forces.
Copyright © 2010 Vantage Point Performance, Inc.
27
What We Know About Implementation
We opened our paper with the story of a media conglomerate that had no formal sales processes or manageable
performance metrics. Perhaps you find yourself in this same situation, except that you are motivated to actually take
control of the way your salespeople sell. Or more likely, you have some sales processes and useful metrics, but you
are motivated to improve the rigor or completeness of your sales management system by refining it or plugging the
holes that you now suspect exist.
Based on years of experience helping clients design and implement sales processes and measurements, we can offer
you our perspective on the best and most practical way to successfully redefine the way you measure and manage
your sales force. An overview of the approach is shown below, and greater detail for each phase follows.
Implementing a World-Class Sales Management System
Assess Your Current Ability to Execute
Design & Deploy the Processes & Tools
Align Results, Objectives & Processes
Measure, Manage & Coach
Š Š Š Š Š Š Š Š
Copyright © 2010 Vantage Point Performance, Inc.
28
Assess Your Current Ability to Execute
Design & Deploy the Processes & Tools
Align Results, Objectives & Processes
Measure, Manage & Coach
Assess Your Current Ability to Execute
The first step in improving your sales force’s ability to execute is to
understand your organization’s existing strengths and weaknesses.
While this may seem obvious, it is a step that is commonly overlooked
by sales leaders who prefer to jump straight to the deployment of a
sales methodology of one type or another. In fact, this ready-fire-aim
approach is a tendency in many sales organizations, where analysis is
perceived to be a time-consuming, unnecessary evil.
How Vantage Point Can Help 9
9
However, this quite necessary step is not tremendously time
consuming, and it is anything but evil. By understanding where your
current sales management system is lacking, you can make highly
targeted changes that will have an immediate and powerful impact.
Below is a summary-level example of such a brief analytic exercise.
Analytic tools to assess your sales force Outside perspectives to challenge the status quo 9
Skilled facilitation to accelerate the effort Sales Force Execution Scorecard
Strategic Clarity
Process Implementation
Metrics/Reporting
Overall Ability to Execute
100%
74%
58%
65%
Coaching Ability
Supporting Tools
Incentive Alignment
25%
60%
90%
Š Š Š Š Š Š Š Š
Copyright © 2010 Vantage Point Performance, Inc.
29
Assess Your Current Ability to Execute
Design & Deploy the Processes & Tools
Align Results, Objectives & Processes
Measure, Manage & Coach
Design and Deploy the Processes and Tools
Once you have isolated your top areas for improvement, you should begin to design and build any missing processes
and tools to support the way you want your salespeople to sell. Commonly, this is the most demanding stage of the
implementation effort, but it is a one-time investment that pays off for years into the future.
If you have no existing formal processes in place, you are in some ways at an advantage. Your challenge is only to
isolate the key selling activities for each role in your sales force and then design processes and tools that align with
those roles. The primary challenge you will face is ‘right-sizing’ the system, so that it is neither too complicated to
gain adoption nor too simplistic to provide any management
value.
If you already have formal processes, you will face the design
effort described above, in addition to the challenge of either
modifying or discarding processes that may not fit your ideal
selling model (or processes that you may have licensed from a
vendor and can neither modify nor discard).
9
How Vantage Point Can Help Subject matter expertise to inject best practices 9
Once the processes and supporting tools have been designed,
you must train your salespeople and sales managers how to use
the tools within the context of the new processes. Training for
the salespeople should focus on how the processes and tools
enable better selling, while training for the managers should
focus on how the processes and tools enable better coaching
and development of the salespeople.
Objective voices to evaluate existing processes and tools 9
9
Process and tool repository to speed design and implementation Methods and resources to skillfully train your sales force Sample processes and tools from past clients are shown below.
Sales Role Process Assessment
Role
Process
Retail
Specialist
Technical
Rep
Field Sales
Manager
Architecture
Manager
Regional
Manager
National
Acct Mgr
Sales Force
Mgmt
Territory
Mgmt
Account
Mgmt
Opportunity
Mgmt
Call
Mgmt
Time
Mgmt
Critical Process in Place
Copyright © 2010 Vantage Point Performance, Inc.
Critical Process Missing
Discretionary Process
30
Sample Sales Processes
Sample Account Management Process
Each April
Account Manager
Meets w/ Customers
to ID Customer
Objectives
Jan
Account Manager
Reviews Plans with
Manager and Internal
Stakeholders
Account Manager
Drafts Account Plan
for Each Key Account
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Confirmed Plans are
Shared w/ Customers
Oct
Nov
Dec
Monthly Performance Reports to Account Manager
Quarterly Performance Reviews w/ Manager
Semi-Annual Performance Reviews w/ Customer
Sample Opportunity Management Process and Metrics
Engage
Prospect
Lead
Generated
Buyer
Conversation
• # of Leads Generated
(In total and by source)
• % of Leads Successfully
Contacted
(In total and by source)
Demonstrate
Value
Buyer
Demo
Executive
Conversation
Negotiate
Terms
Proposal
Submitted
Won/Lost
• # of Demos Conducted
• % of Leads Resulting in Proposal
• % of Leads Resulting in
Demo
(In total and by source)
• # of Signed Contracts
• % of Leads with
Executive Contact
Implement
Install/Training
Complete
• Customer
Satisfaction
• Revenue Generated
• % of Leads with a Signed Contract
(In total and by source)
• Reasons for Win/Loss/No-Decision
(% of total proposals)
Copyright © 2010 Vantage Point Performance, Inc.
31
Sample Tools to Support Sales Processes
Call Management Tool
Account Management Tool
Meeting Participants
Name
General Information
Key Customer Contacts
Customer Name:
Account Leader:
Key Contact
Date:
Company Name:
Questions
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
Potetential Objections
‐
‐
‐
Possible Next Steps ‐
‐
‐
‐
Buyer Type
Call Objective
‐
Anticipated Business Issues
‐
‐
‐
Product/Service Alternatives
‐
‐
‐
Value Propositions
Company:
Product/Service:
Last Update:
Key Account Plan
Call Planning Guide
Function
Relationship
What They Want
What We Want
Current
FY ‘10
Strategic Initiatives:
Stated Needs:
Revenue:
Gross Margin:
Latent Needs:
Share of Wallet:
Installed Products:
Issues to Resolve:
Strategic Objectives:
Response
‐
‐
‐
Action Plans
Action Items
Owner
Completion Date
1.
2.
3.
4.
1
Opportunity Management Tool
Territory Management Tools
Hi-Touch Customer
Opportunity Qualification and Management Form
Lo-Touch Customer
Company:
Opportunity:
Team Leader:
Last Update:
Key Prospect
Qualification
Defined Need:
Winnable?
Approved Budget:
Timeline to Purchase:
Buyers
Name
Type
Competition
Company
Needs
Strengths
Level of Support
Coverage Level # Face to Face Visits Per Year
Weaknesses
PREMIUM
Strategy
Offering
Value Proposition
Positioning
HI TOUCH
Next Steps
Objective
Person Responsible
MODERATE
TOUCH
Action Item / Completion Date
LO TOUCH
Stage
Lead
Qualified
Demo
Proposal
Negotiate
Win/Loss
MINIMUM
Sales Rep
Tech Specialist
DSM
RVP
VP
National Accounts - Preferred
24
12
6
24
4
National Accounts
12
6
4
Very Large
12
4
6
6
1
Large Relationship
12
4
6
6
1
1
1
4
Large
12
Medium Relationship
12
6
4
2
Regional Accounts
4
2
2
1
2
Medium
4
2
Small Relationship
4
2
Small
1
1
Very Small - All
1
1
4
2
Š Š Š Š Š Š Š Š
Copyright © 2010 Vantage Point Performance, Inc.
32
Assess Your Current Ability to Execute
Design & Deploy the Processes & Tools
Align Results, Objectives & Processes
Measure, Manage & Coach
Align Results, Objectives, and Processes
By putting the right Sales Processes and supporting tools in place, you will almost certainly improve your sales
force’s productivity through greater sales discipline and measurement. However, aligning the new Sales Processes
with your desired Business Results and Sales Objectives creates a holistic management system that empowers you to
proactively manage your selling effort in a way that few executives can enjoy. This is the step that takes sales
management to the higher level of rigor and potency.
First you must understand the drivers of profitability within your company (Market Share, Gross Margin, Unit
Volume, etc.). These desired Business Results then become the targets at which you aim your Sales Objectives
(increasing share-of-wallet, reducing discounting, acquiring new customers, etc.). Identifying your Business Results
and Sales Objectives must be done with deliberation and
careful analysis, because you are setting the direction for your
entire revenue engine.
Practically, this is an exercise that should take place in your
annual planning cycle. As you plan for the upcoming year, you
should be selecting the strategies that will help you attain your
financial targets, which in turn should inform your Sales
Objectives. As this implies, aligning your Results, Objectives,
and Processes is not a one-time event – it should happen at
least once a year, perhaps even more frequently if your go-tomarket strategies shift for some reason.
9
How Vantage Point Can Help Analytic horsepower to identify realistic Business Results and the related Sales Objectives 9
Best practice databases to benchmark your goals against other sales forces Formal Sales Processes enable you to change the direction of
your sales force while in a full sprint by replacing one set of
Sales Objectives with another. Once the objectives are in place,
you must embed them in the Sales Processes by including the
Objectives in account plans, or territory plans, or whatever the
appropriate planning mechanism. See examples of analyses and
recommended objectives from past clients below.
9
Advice and oversight to ensure Objectives are linked to actionable salesperson activities (Ideally in concert with your annual planning effort) For More Information
Copyright © 2010 Vantage Point Performance, Inc.
33
Sample Analyses to Identify Sales Objectives
Profit Driver Analysis
Increase Price
2.9%
Reduce Discounts
3.0%
Analysis Reveals:
Pricing is the key driver of
profitability
Change Required for a 10%
Improvement in Profitability
New Sales Objective:
Decrease % of Discounting
7.3%
Increase Volume
Decrease Delivery
Expense
13.4%
Eliminate Least
Profitable Customers
Bottom 14.7%
Analysis Reveals:
Profitability is concentrated in the
biggest customers
Concentration of Customer Profitability
Customer Size
>250,000
100,000-249,999
12%
25,000-99,999
# of Customers
Net Revenue
Gross Margin
1.67%
2.73%
7.24%
10,000-24,999
9.94%
5,000-9,999
11.17%
32.49%
New Sales Objective:
Retain and Grow Major Accounts
38.11%
73%
19.71%
21.48%
20.49%
<5,000
67.24%
18.97%
9.60%
8.49%
5.25%
4.27%
6.92%
4.47%
5.54%
4.22%
Selling Capacity Across Tasks, Roles, and Benchmarks
47.7 hrs
51.9 hrs
49.5 hrs
51 hrs
21%
30%
31%
34%
6%
32.2%
8%
11%
45%
47.5%
6%
8%
10%
37.9%
Productive Capacity
2%
5%
Face‐to‐Face
7%
Troubleshooting
Outbound Calls
2%
Analysis Reveals:
ASM’s have a relatively low
amount of productive time
New Sales Objective:
Increase % Productive Time
Other Non‐Customer
34%
36%
Travel
37%
30%
Admin
Meetings
Face‐to‐Face
Other Customer
Travel
20%
18%
21%
14%
Admin/Internal
Go To Market Partners
Benchmark Data
3%
4%
3%
TSM
ASM
TFR
Unproductive Capacity
Revenue from Core Products vs. Accessories
5.5%
2.7%
2.5%
100%
90%
80%
70%
Revenue from Accessories
(23.6% Gross Margin)
60%
50%
94.5%
97.3%
Analysis Reveals:
Accessories have much higher
margins but very low sales
97.5%
Revenue from Core Products
(15.9% Gross Margin)
40%
30%
20%
New Sales Objective:
Increase % Sales of Accessories
10%
0%
Midwest
Northeast
Southeast
Copyright © 2010 Vantage Point Performance, Inc.
34
Example of Embedding Sales Objectives in Processes and Tools
Call Planning Guide
Company Name:
Date:
Meeting Participants
Questions
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
Potetential Objections
‐
‐
‐
Possible Next Steps ‐
‐
‐
‐
Buyer Type
Name
Action: Include the Accessories in ‐
Anticipated Business Issues
All Call Plans
Call Objective
‐
‐
‐
New Sales Objective:
Sell More Accessories
Product/Service Alternatives
‐
‐
‐
Propose Related Accessories
Value Propositions
Company:
Product/Service:
Last Update:
Key Account Plan
General Information
Key Customer Contacts
Customer Name:
Account Leader:
Key Contact
Current
FY ‘10
Revenue:
Gross Margin:
Installed Products:
Strategic Objectives:
Relationship
Action:
Strategic
Initiatives:
Include the Accessories in Stated Needs:
All Key Account Plans
What They Want
What We Want
Share of Wallet:
Function
Latent Needs:
More Accessories
Action:
Coach to the Objective and Measure Success
Issues to Resolve:
Action Plans
Action Items
1.
2.
3.
4.
1. Identify potential accessory sales
2. Demo accessory products
Owner
Completion Date
Š Š Š Š Š Š Š Š
Copyright © 2010 Vantage Point Performance, Inc.
35
Assess Your Current Ability to Execute
Design & Deploy the Processes & Tools
Align Results, Objectives & Processes
Measure, Manage & Coach
Measure, Manage, and Coach
None of your efforts will be rewarded with success if you do not have front-line sales managers that are
knowledgeable and supportive of this system of processes and metrics. Sales managers play a pivotal role in the
success of the system because they are the only ones that can:
•
•
•
•
•
Enforce salesperson compliance with the Processes
Ensure that current Sales Objectives and good selling strategies are embedded in the action plans
Coach the salespeople within the Processes and
toward the Objectives
Measure successful outcomes from the execution of
How Vantage Point Can Help day-to-day selling activities
Judge what changes must be made in Sales Force
9
Assessment tools to Management to improve overall productivity
We have often said that if we were forced to choose between
training salespeople and training their managers, we would
choose sales managers without debate. Managers are the real
change agents in the sales force, and they alone determine the
success of any sales improvement effort. Unfortunately, most
sales leaders favor training their sellers, not their managers,
which leaves the pivotal role in the sales force without the
skills to deploy and reinforce a rigorous management system.
That said, good sales processes and tools with clearly
communicated metrics provide a solid foundation for sales
managers to begin building their own coaching and
development skills. In fact, the processes and tools
institutionalize something that most sales forces lack – a
framework for coaching activities. If you have found yourself
saying “We want our sales managers to coach, but they just
don’t do it,” then you have a motive to design and implement a
set of processes, tools, and metrics like we have defined
through our research.
Copyright © 2010 Vantage Point Performance, Inc.
9
evaluate the quality of your sales managers Skilled trainers to coach your sales managers to ‘live and breathe’ the new system 9
9
Methodologies and expertise to help you identify risks and challenges before they become points of failure Periodic ‘check‐ups’ to measure the success of the implementation 9
Experience and perspective to help you course‐correct where necessary 36
A Case Study and Concluding Thoughts
cycles tended to be long and complex, necessitating
Opportunity Management. Finally, the diversity in
their daily activities and the need to prioritize their
selling tasks led them to include Time Management
as a key element of their management system.
In our experience, there are several distinguishing
Detailed Sales Processes and Tools
characteristics that are almost always present in wellmanaged sales forces. They are:
1. A rigorous sales management system in
place (processes, tools, and metrics)
2. A visible commitment to the importance and
durability of the management system
3. Good and widespread reporting of carefully
selected performance metrics
4. An expectation by senior leadership that
managers are actively managing and
coaching
Territory Management was smartly embedded in the
sales force’s annual planning cycle. Once a year,
every sales rep would prepare a ‘business plan’ for
their territory and present the plan to their peers for
critique and advice. This plan then became a
coaching tool for the sales managers to use
throughout the year to guide and counsel the reps.
Commented the company’s SVP of sales, “We make
sure we are coaching from the business plan because
it is their words, not ours, and we want to provide
feedback to them on how to be successful.”
In a previous study that benchmarked world-class
sales forces, we encountered one company that
offered a striking example of good sales management
centered on sales processes, tools, and metrics.7 The
company was a major U.S. integrator of office
technology products and services. It had been chosen
by its customers as one of the best sales forces in the
country, and we were allowed a glimpse into the
inner workings of their highly successful sales
management framework. Their management system
had evolved over time with their changing needs, but
it perfectly reflected the themes that emerged in our
recent research, and it was unquestionably a major
contributor to their marketplace success.
In addition to the annual business plans, Territory
Management is reinforced by the use of ‘war rooms’.
The war room walls are covered with maps showing
the locations of their major account targets, as well as
their market penetration in key geographic
areas. Reps gather there in the early mornings and
late afternoons to track their progress and get
energized for battle with the competition.
Selling Role, Objective, and Process Selection
The sales role we studied was their field sales rep,
whose Sales Objective was to acquire new customers
from an assigned geographic territory of small and
mid-size businesses. The Objective was first
characterized by a large number of potential
customers who needed to be prioritized in order to
allocate effort wisely. Therefore, Territory
Management was critical. Additionally, the sales
7
Time and Opportunity Management activities were
combined in a process that they call STAMP – their
Sales Tracking and Activity Management Program.
Every week sales managers meet with their reps to
review their upcoming activities, help them qualify
leads, set strategies for meetings, and other coaching
activities. Their SVP observed, “The cornerstone to
our sales strategy is our weekly one-on-one meetings
between our rep and our manager. We are kind of old
fashioned in that we track a lot of our activity. We
call the process STAMP, and it focuses on how many
cold calls our people make, their appointments, their
proposals, their demos, and where they are in their
sales cycle that we are managing.”
(Ironically, we believe that their approach is not old
The Chally World Class Sales Excellence Research Report, 2007 Edition, HR Chally Group
Copyright © 2010 Vantage Point Performance, Inc.
37
fashioned – it’s new fashioned, as active sales
management is the only path to elevate professional
selling from an art to a science.)
Their SVP also explains that the STAMP process is
where their sales opportunities are analyzed and
reported. “It also has our sales funnel inside of there.
We have a certain amount of revenue that we want
each rep to have in their 30/60/90 day cycle. If they
do not have that revenue, we know that they have to
go out and do more prospecting.”
In total, this sales force’s business plans, war rooms,
and STAMP embody the processes and tools that are
relevant for managing their sales rep’s selling effort.
The processes are rigorous and management is very
proactive. In fact, the sales force environment is
described as “intense,” which might seem threatening
to many salespeople. However, their sales force
turnover is an amazingly low 10%. Says the SVP,
“It’s a lot of paperwork, but it’s all focused on
bettering the salesperson. There’s some stress in it,
but once you see the results, it’s kind of hard to
argue.”
Metrics
As you might expect, this company is very keen on
measuring the performance of its sales force. At the
Process level, they have targets and track
performance against a number of activities:
• # Cold Calls
• # Appointments
• # Proposals
• # Demos
• # Customer Follow Up Meetings
• # Assigned Accounts
•
# Days Training
In addition, they report Sales Objectives such as
success in advancing calls and acquiring new
customers. Of course they also measure Business
Results like their Sales Pipeline metrics and Financial
performance.
But they went one step farther by comparing the
relative performance of their different business units
across key metrics and then isolating the practices of
their top performers. Their SVP of sales describes the
benchmarking process: “It really frames our
performance inside of the company. It is a stack
ranking that we publish every month and it goes to
every single one of our business units. It is shared
with all of our employees. It talks about things like
Average Sales per Rep and Average Customer
Response Time. We know every BU and where they
rank, so when we might be struggling with
something, say you are number 20 in the rankings,
there are 19 guys in front of you that are obviously
doing something better in the benchmarks. It is very
easy for you to pick up the phone and talk to them
about what they are doing to see if you can
implement their practice inside of your business.”
Outcomes
It is clear that this company believed in using metrics
to drive sales execution, and it had the success to
prove it. The company’s Average Revenue per
Employee was 36% higher than its industry peers,
and it was acquired by a major office equipment
manufacturer shortly after our study explicitly for the
quality of its sales force and customer relationships.
Š Š Š Š Š Š Š Š
Copyright © 2010 Vantage Point Performance, Inc.
38
In Conclusion
Our research into the use of metrics to drive sales force execution allowed us to put into a formal framework many
of the best practices that we had already observed while working with our own clients and while benchmarking
other world-class sales forces. These forward-looking companies had the vision to see that sales organizations of the
future will not look like sales organizations of the past. The sales function is rapidly evolving from an undefined art
into a highly manageable science, and those companies that continue to operate without a system of processes and
metrics will be left behind by competitors who can shift their strategies at any time and watch with confidence as
their sales forces’ behaviors shift in synch.
Implementing a system of processes, metrics, and tools to manage your sales force is a key checkpoint along the
road to sales excellence. We believe that the findings of this research provide clear vision to the destination. If you
would like to investigate ways that you can apply these findings to elevate your own sales effort, please contact us to
schedule an exploratory conversation.
Copyright © 2010 Vantage Point Performance, Inc.
39