The Science of Sales Management
How much of your time do you spend “target chasing?” As a Sales Leader or Sales Professional, do you invest most of your energy measuring the gap between current results and targets, and the rate at which that gap is closing, to see if you’ll get there?
If so, then you’re just like many sales organizations.
The problem with this approach is that we must wait too long to assess our progress. Inevitably, we find ourselves “putting on the pressure” as we move from one quarter to the next.
So how do we stop this vicious circle? The answer may lay in thinking more like scientists. By taking a scientific approach, we can actually “reverse engineer” our targets.
“Reverse engineering” involves taking a finished product and breaking it down into its smallest elements to determine how it was made in order to improve it.
We can employ this same approach in sales to virtually guarantee target attainment. The key is to almost ignore the targets themselves, and focus on the smaller daily activities that will guarantee we achieve them. This brings the focus more to the “how” vs. the “what.”
The Reverse Engineering Process
Step 1: Dissect Buying/Selling Process
First we conduct a scientific breakdown of the Client buying process and our selling process, to identify the “Key Client Actions” that move a typical sale forward. In most cases, a sale can be broken down into three to five critical actions the Client needs to take, such as:
- Client engaged in a preliminary phone call and agreed to a meeting.
- Client participated in an open-minded exploration of their priority needs, and potential new solutions.
- Client engaged all decision makers to contribute to a desirable solution.
- Client participated in a collaborative review of our proposed solution.
- Client committed to our solution and got agreement with signing authorities.
There are several “stages” involved in every sale. But the real key is to determine what Client actions “leap” that sale forward significantly.
Step 2: Define Key Metrics
Next we determine which ratios, or “metrics” best gauge our efficiency and effectiveness at moving through the Key Client Actions. Clearly, if we can be efficient and effective in this effort, we can maximize sales results.
Some typical efficiency and effectiveness measures include:
EFFECTIVENESS
- Sales Volume (units or $)
- Sales Results vs. Target
- Number of New Clients
- Number of Sales
- Number of products per Client
- Sales growth per Client
EFFICIENCY
- First Appointment to Proposal Ratio
- Proposal to Close Ratio
- Sales Cycle Time
- Average Sale Size
- Average Proposal Size
- Average Number of Products per Proposal
Most organizations are pretty good at tracking effectiveness measures, but we often get better leverage from tracking efficiency metrics.
Once we determine the ideal metrics for our organization, we can establish baselines.
Armed with this data, we can calculate exactly how many first appointments and proposals are required per month to guarantee our targets. Then we can focus our attention on the weekly (or even daily) activities required to succeed, rather than just chasing the target continuously.
The key becomes choosing the right metrics, that are tightly linked with Key Client Actions.
Step 3: Refine Sales Accountability System
The next step involves implementing a closed-loop system for tracking performance, extracting insight, and setting standards. Once we know our “sales metrics recipe”, we can hold ourselves and our Teams accountable for the right “ingredients.”
Often, this involves building or refining systems and/or processes. The key here is to keep it simple and leverage as many current systems as possible. Regardless, our goal is to find a non-intrusive (and objective) way to count the right things…so we can uncover valuable performance insights.
Step 4: Manage Performance
Lastly, we can identify patterns in individual and team performance metrics, in order to provide timely and relevant coaching.
We can also seek ways to improve current performance metrics overall.
In other words, this fourth step is where we can really leverage the “science of sales management” to optimize sales results and virtually guarantee target attainment!
