Managing and measuring sales performance to grow results
If you have a person on your sales team who is not performing their job to expectations, there are essentially only three major reasons for it:
- they don't know what the job is
- they don't know how to do the job
- someone or something is interfering with their desire or ability to do the job
In order to treat these three major causes of failure, we need to assess each of them and ensure we have fulfilled our sales leadership responsibilities. These include:
1. Clearly communicate what the job is, including:
- the overall mission of the business – where the company is going, what its value proposition is in the market and what it is dedicated to achieving;
- the objectives of the sales department and the sales team; and
- their personal role and how it impacts the greater organisation including their specific responsibilities, tasks they must perform and how they will be measured
2. Ensure they know how to carry out these sales responsibilities and tasks, and where possible provide a mentor within the business that can assist and guide the employee in their role; this means training and coaching is a continuous responsibility
3. Ensure there is no task interference that will adversely impede their work; this could be other people that interfere with a salesperson's performance or a lack of tools for example
In order to assess these issues on an ongoing basis it's important to measure their performance.
Measuring sales performance
There is no job in the world that cannot be measured. You can assign one or a combination of the following four measures to any job:
- Quantity – sales volume, dollar revenue generated, accounts acquired, etc
- Quality – customer relationship satisfaction, margin achieved
- Timeliness – results, reports etc on time
- Cost effectiveness – performance within agreed expense budgets
It is imperative that you measure your sales people's performance so they can truly understand their job, and be consciously competent. People do not respect what you expect, they respect what you inspect. Accordingly, measuring performance should not be used as a basis for punishing people; it should be used as a way to recognise people for their performance, and it gives sales management a basis for positively reinforcing the behaviour they expect and achieve from each person on the sales team. When sales people are not effectively measured, management in effect fails its people.
An interesting example of performance measurement occurred at the Bell Laboratories. For a period of over 45 years, Bell Labs had one objective – one new patent a day, every day. The performance of that research team over 45 years was two new patents a day, every day. This would not have been achieved if the team's performance had not been measured and they had not been recognised for that performance. A key takeaway from this is that people must know how they are measured.
If a new member joins your sales team and you were to communicate:
- what their responsibilities are
- what activities they must engage in, and
- how you are going to measure their performance
they would have a very good idea of what their job is and what is expected of them. You can then look at their confidence level with regard to each of these and determine whether or not you expect them to be successful in their role... and successful performance should be the norm (ie, what's expected). A sales manager should only be surprised by failure, never the success of an individual. The reason for this is that if a sales manager expects to be surprised by the success of anyone on their team, our experience shows that they will literally cause them to fail.
Predicting future sales growth
Another key piece of information that should be made available to a new team member is how to predict what future growth they may have in the company, enabling them to see the stages an average person that joins the company goes through in the sales timeline. Doing this allows the team member to measure their own performance, giving them the ability to determine whether they are competent or not.
To gain this information it is necessary to examine your company's records and look at those individuals that are successful, and then gain an average of those successes to model a prediction. If you were to compare the successes with the failures you would notice that they all start out alike, however there comes a point in time where those that are successes take a definite upturn.
Over time team members will be able to use this tool to measure if they are above or below average, either way they will be continually spurred on to do better. If they notice that they are consistently below average with their sales performance they will understand that they are behind, so that when you counsel them they will understand that it's not about personality, it's not that you don't like them, it's about performance. Incidentally if someone is aware of this and they fail to improve, in a very short time they will leave voluntarily.
Counselling is crucial in this process. If you have a team member who after an appropriate amount of time in your company is consistently below average you must sit them down and counsel them, explain to them their lack of performance and put them on probation. If you are not carrying out this process you will have people who are failing but who don't even know you care.
Setting company standards
Another step in the sales performance management cycle is to communicate the standards of quality that are expected in the company. Every company has standards, the only difference being that in well managed, well lead companies, management sets standards and the leadership of the company communicate those standards. In a poorly run, poorly led company, nature is simply allowed to take its course and in such a case pride is a valuable, lost attribute.
Many people misunderstand standards and they should not be designed to be punitive in nature. Minimum standards are important, and should include:
- ethical standards
- appearance standards
- performance standards
Standards are not just about what management communicate but what they live up to such that if a person goes below the minimum that has been communicated, they don't work at the company any more because no one would have pride in associating with that person.
Measuring performance should be easy.
When all the steps outlined are put in place, team members feel competent and knowledgeable enough to understand how they are performing within the company and the company can see how each sales team member is performing.
'Practical Sales Management and Leadership' is a modular, cloud-based, training system that will help any sales leadership team grow its effectiveness in measuring sales force performance. Preview a module here.