This article is dedicated to sales managers. We have discussed a lot about methods and tools that assist salespeople in their work, but how can we help managers? What is the important information they need to work effectively with the team?
Contrary to the conventional wisdom found in many companies, when it comes to sales productivity indicators, less is more. That is, just a few indicators are sufficient to evaluate the team’s performance. To manage sales requires focus, alertness and speed in decision making. There is not much time for extensive analysis.
All of us who work in sales know that, at the end of the day, what matters is whether or not we achieve our sales goals. This is the main indicator of sales performance.
But what good is it to cry over the spilt milk of the past? We have to work to do now so that we can increase the chances to achieve the goals going forward. This is where the sales manager’s role comes in.
One of the first things to be evaluated is whether the sales plan is being met or not. This indicator measures when the sales performance meets the established planning to achieve the projected result. Planning here is understood as a strategy to get the opportunities, and how you will manage those to achieve your goals. Deviations from the sales plan is a bad sign. It indicates that the sales area has no control over its own actions and the results are not usually sustainable. Within the sales operation, this is the indicator with greater strategic implications.
The sales forecast is an operational indicator. The forecast may or may not be consistent with the planning, but it should exist anyway. The forecast contains the sales opportunities in which the professional can manage with confidence in achieving success.
Unlike sales planning, the forecast does not guarantee and does not show how the sales goals will be achieved. The intent is to present what the current perspective of sales revenue is in the period. The forecast reliability is essential for sales management. From it, the need or not for more prospecting comes down. Where the projected income is lower than the sales goals, we must focus on the opportunities where we actually have the greatest chances of success and ultimately enable the company to plan its cash flow and other business needs. The lack of definition in the sales forecast indicates that salespeople do not have their opportunities portfolio adequately managed. For shareholders, this is unreliable management.
Finally, the so-called win ratio that indicates the average closing rate considering the portfolio of opportunities in the sales pipeline and the opportunities successfully closed. This indicator is extremely important because it demonstrates how effective the sales team is on competitive terms. The win rate is the main sales team performance indicator. The larger it is, the more effective is the team.
Two complementary indicators, but no less important, are the success of proposals, i.e. what percentage of opportunities are won after the proposal is presented to the client; and the product presentation success that represents how many opportunities were won after the presentation. They address the sales force effectiveness to properly meet the customer’s expectations and needs, both in the presented prices and in the characteristics of the offered product. These indicators directly impact the win rate.
With these six indicators it is possible to effectively manage sales teams and their results. However, without a consistent sales method and a sales automation process done right, it will be very difficult to implement them, to measure them, and especially, to ensure that they will be well managed.