When we talk about sales metrics we usually think units, volumes, quota, members signed, calls made. Generally speaking, these metrics would have been put in place in an organisation at the time that the sales team was established, and (maybe) changed from time to time, usually from quota to number of calls or units, and so on.
The current state of markets and most industries are quite different from the time when the use of these metrics was best practice. It is time to consider: are those metrics still useful? Are the metrics that we have in place helping us achieve our goals? Are they encouraging the right behaviours in our sales team? Do we have in place metrics based on things that are at least to a certain point in the salesperson’s control?
Sales teams are still using sales metrics that don’t do them any service. Some are irrelevant—this can be the case of units sold, calls made, etc.; some drive the wrong behaviours (or at least the kind of behaviour that can become a problem and at an extreme are immoral and/or illegal, think Volkswagen, Wells Fargo, Youi, Commbank).
It is human nature to tend to do things as they have always been done. We resist change and even when change happens we sometimes keep on going the same way we have done before. We keep on going with inertia. But this behaviour can have us doing things—measuring sales performance, in this instance—in ways that are less than efficient.
Companies are coming to terms with the idea of new and changing sales metrics to move their sales teams from ordinary to extraordinary.
There are two main points that we’d like to focus on: Firstly, the relationship between sales metrics and behaviour; and secondly, the validity of established sales metrics in the current environment.
Sales metrics as drivers of behaviour
If people in your organisation are measured against each other, it’s quite possible that you won’t have a collaborative team. If you measure safety, customer satisfaction, or other metrics aligned with what clients value, you probably have a more successful, collaborative and cohesive team, made up not only of salespeople, but also other front-line staff, and back-end office staff.
Metrics have incredible influence on the behaviour of the team, directly or indirectly. If a person’s performance is going to be measured by a certain bar, it is reasonable to expect that it will have some effect on that person’s behaviour.
For this reason, it is vital to understand which metrics will drive the behaviours you want to see in your sales, customer service and delivery teams. So, here are a couple of basic questions to consider: Are you using metrics that drive the right behaviours? Do your metrics drive behaviours that improve customer experience?
To choose the right metrics it might help to think about which behaviours you want to drive, what your customers value, and what others in your industry and the industry ‘next to yours’ are doing and measuring.
Are your sales metrics up to date with the current market conditions?
It is also important to look at disruption factors and newcomers to the market.
There’s rarely an industry that has not been disrupted over the past few years. New forms of competition, new ways for clients to access products or services, obsolescence, new payment methods; you name it. It is quite surprising then, that some companies have not changed what they measure in terms of sales.
There are other reasons why a company might need to change its sales metrics. For example, a change in the company focus or strategy might require that the sales teams put the effort on profit, and maybe not all products, solutions or clients create the same profit. In this case, continuing to measure units sold—or something like it—won’t be very useful, and a change in metrics to profit is more suitable.
To shift sales teams from ordinary to extraordinary, business and sales leaders need to have the courage to do things differently and avoid the ‘status quo’ trap.
Markets change constantly, so you should be regularly checking that your metrics are up-to-date and able to deliver your sales strategy and the results that you need, and drive the behaviours you expect from your team.