I’ve driven miles with my two warp-speed kids in my backseat. (Don’t worry that they’re mine!) Sales managers are usually laughing when I tell them about the fenders I nearly smashed when trying to control the kids and drive without looking at them from the rearview mirror. “Sure,” they chuckle, “you have to keep your eyes at the road and look ahead.” However, when you consider the way they run their sales departments, they’re at the same thing I was: the rearview mirror.
Every sales manager will be able to tell you with unmatched exactness when their superior managers ask: “How’d we do last month? Do we have a create a plan for the coming month?” If they’ve driven more than a couple of miles in their team, Sales managers know how to respond. They glance at their sales revenue figures and inquire of their sales team reps and leaders the same questions I have heard from behind: “Are we nearly there already?”
The significant issues in these issues are:
We are focused on revenues that are a “rear perspective” indicator, not on the activities that provide a forecast of the kind of output that will be made in three months, weeks, or even three years.
The basis for reference is entirely internal. What do we perform against our schedule, or how are we doing in comparison to the previous year, rather than how we are performing in relation to the variety of opportunities being considered and are available currently in the market.
Predictive Indicators and Coaching Frameworks
The second question, “Are we on the right track?” should be “Are we executing the right things in the right quantities in the right way at the right time so that we can generate the revenues we desire in the near future?” (Trips straight off the tongue and the other components are crucial). The first step towards making sales more effective is to figure out methods to measure and forecast what will happen instead of what HAS occurred. Without these predictive measures, sales managers are left with only two gauges. They’re either there or not.
It is the first thing to determine how business development works. It is also essential to identify the leading indicators that are predictive such as the number of leads, sales call activity levels, consider rates and the number of proposals that are sent as well as funnel conversion rates and the average size of deals, to mention some. These numbers will tell sales managers the way their business development process is performing and what revenues are likely to be generated three months, three weeks, or six months down the road.
With data from the past that links to the present and future performance available, sales managers can analyze what the process of business development operates as well as identify the difference between expectations activities and the actual ones and determine areas for coaching to boost performance. The business development process, along with its associated measurements and performance indicators, allows sales managers to evaluate the performance of their sales reps and serves as a standard benchmark for sales reps as well as sales managers.
Let’s say we’re considering the cumulative sales time (the number of time salespeople spends to close an individual item of business). We inquire: “Is it important to decrease the time it takes to sell?” Everyone nods, “yes.” We ask: “How high is it currently?” Because very few businesses have actually defined or gathered the data, no one knows. In the absence of processes metrics, sales managers are left to guess and use the rear-view mirror.
If we had defined our process and then measured the performance and measured performance, we could find that the cumulative sales average is 20 hours. Additionally, we could see that the least time for incremental sales is 12 hours, during the longest of 36 hours. This lets us look at two important figures that are the average cumulative time for sales and “actual and average” the differences between sales reps as well as for the sales team in general.
If we’re recording and tracking the cumulative sales time in a consistent manner and consistently, we’ll have an overview that reflects our process for business growth as well as the future likely results. (If the average time for cumulative sales is rising, future revenue will decrease unless other factors alter. Management’s responsibility is to increase the average and reduce the variation.) If we are able to identify and graph other variables that can be used to predict, our vision of the future road ahead will be more precise. Sales reps and sales team managers and executives at the top can answer “Are we already there?” by telling the audience, “We’ll be there in three minutes” (or three weeks or three months) )… or in the worst scenario, declaring, “Daddy’s lost,” and implementing a solution before they run out of time, and mommy gets very angry.
External Reference Points
Another aspect of “How do we fare?” is the one that asks, “Compared with what?” The typical benchmarks are the way we’re performing against our plan and how we’re performing in comparison to the last time. Another mirror shows the rearview. It sounds like:
Us What are you up to this year?
Sales Manager: Great! We’re up by 15% over the previous year. We’re also way ahead of our plan by 5percent.
You can call me Goofy However, the thing I’m interested in is: What proportion of deals on markets are being looked for? If we don’t know the number, we’re not able to understand how big sales could have been. We only know that we’re doing well compared to the expectations we had. Even if you believe that your Marketing Department is supposed to determine that Sales managers who aren’t sure of the answer won’t be able to deploy their sales reps efficiently since they don’t understand where the process was in the past, it is now or is going to take place.
Our experience, as well as other studies, have shown that around 87% of trade show leads never get followed up with. We have also found that, regardless of the source of the lead, a whopping 48% of leaders are never ever contacted. Around 90% of salespeople stop selling after the fourth time they attempt to gain access to an account or introduce new products to an existing customer. Since there aren’t any reliable external references, everyone is content so long as the sales perform or exceed expectations.
In both cases, with the concentration on revenue rather than actions and the use of internal reference points instead of outside ones. Sales executives have their eyes fixed on the rearview mirror, which has led to the fact that there are plenty of car accidents – clients who disappear, salespeople who quit or walk away frustrated, and prospects who are able to escape. The most crucial aspect of improving sales effectiveness is to design what is typically not designed – the sales process. It’s a manager’s task for managers. To increase sales over time, managers have to enhance the value and efficiency of their business systems rather than just insist everyone drive faster when watching the rearview mirror.