The One Metric That Accurately Predicts Sales Performance

Some may remember the promise of computers in the 1980s. “They will make us more productive.”

Yea right…

What they have done is to bury us in data, so much data that it is not only unusable, it’s so overwhelming that we spend much of our time managing it, moving it, cleaning it, deduping it, merging it with other data, buying more storage to hold it, buying more computing power to process it, only to get completely lost in it.

Here you go…

While working with a key account team focused on one of the company’s largest pharmaceutical clients, I asked the field marketing manager for the recent history from the marketing automation platform. I was expecting to be able to identify the digital footprints of visitors from the pharma client. As they navigated the company website, their path and points of engagement would highlight their building (or waning) interest in specific products and services.

The field marketing manager ran a report and sent me the results. “Here you go, let me know if you have any questions.” And it was glorious…thirty thousand records in an Excel file.  Clearly there was a lot of activity going on. However, we had no way to build an actionable story from that data, no way to tell who was visiting or what they were interested in.

I asked a couple of other key account teams whether they were leveraging the marketing automation platform to guide their account planning.  Nope…those that had tried were overwhelmed with the data and lack of insight.

(I’ll acknowledge that this experience does not represent what’s possible in the world of marketing automation.  I would suggest that it is typical.)

Similarly, sales managers…and their managers…pore over reports hourly to learn how the business is going. Is the team making enough sales calls? Are we touching our accounts enough? How’s our pipeline velocity? How many new opportunities are being logged? Are we getting enough meetings? How’s the T&E budget?

Sales people are inspected. How’d you do? How many did you do? When is it going to close? When are you going to call back? How many more can you do?

In my experience, all this data fits into the “MIPs” category – meaningless indicators of performance. Easily gathered, easily compared, but of little value. Any one metric, on a standalone basis, gives zero visibility into the health of the business. And many of them, when combined, do no more than suggest whether the team is meeting the subjective expectations of management, around activity rather than results.

Now, don’t get me wrong…when we work with sales managers to improve group performance, we start with basics. It worked for Vince Lombardi in 1961 – at spring training that year (after a disastrous previous season), he started off the first day of training with the absolute basics: “Gentlemen, this is a football.”

We start with similar basics. Activity drives results. Without activity, there will be no results. Now…activity isn’t nearly sufficient, but if reps aren’t meeting with prospects, that’s a problem.

So lets get back to the initial premise – one metric will accurately predict sales performance.

And that metric is the percentage of time spent by first line sales managers on coaching their sales people.  Multiple studies by Gartner, IDC, Objective Management Group, CSO Insights, Sirius Decisions and many others suggest the following:

• Most managers spend less than 25% of their time coaching sales people
• Many managers spend less than 10% of their time coaching
• Most organizations have no formal sales manager profile, onboarding or training strategy
• Most organizations have no formal coaching methodology in place (managers do whatever they did at their last organization)
• Many, perhaps most sales managers are promoted out of direct sales roles because of their success sales rather than their training and skills in coaching

So…if we need to make our Q1 numbers, management just needs to send out a note dictating that all first line managers spend 35% of their time on coaching, right?

Not so fast…as we know in sales…time spent does not equal results realized. Creating a coaching culture takes time, executive commitment, formal processes, process evaluation and improvement. If you wander through a typical sales organization you will find pockets of good coaching practice, where managers have indeed brought skills from previous companies and are typically generating better results than their peers. But to broaden coaching to the organization, a top down approach is strongly preferred, and will probably require some personnel changes.

And organizations that measure the time spent by their first line managers in coaching, and actively improve both the quality and quantity of that time, will drive significant improvements in their sales performance.

So...if you want 2017 to be your best year, stop beating your sales people. Instead, give your managers a football.

Thanks,

Lee