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2 Better Ways To Measure Sales Performance & Improve Pipeline Accuracy

2 Better Ways To Measure Sales Performance & Improve Pipeline Accuracy

By focusing on just two pipeline changes, sales professionals and their managers can significantly improve client satisfaction, employee engagement & the bottom line – on both a company and individual level.

Let’s face it. The all-too-familiar approach to creating sales goals and pipeline reports (using last year’s numbers to create goals and revenue forecasts) does not create the level of precision needed to evaluate and improve sales strategies. When sales organizations expand pipeline parameters to include predictive customer actions or CVO’s (Customer Verified Outcomes) in addition to typical leading & lagging indicators KPI’s (Key Performance Indicators), performance and revenue improve over time.

Two Better Ways To Measure Sales Performance

One: Measure What You Can Manage

Review your sales dashboard – Are you measuring what you can manage?

To measure performance, consider metrics you can actually manage. While lagging indicators such as the number of new accounts (a sales objective) and market share (a business result) are important, they are not within the control of a sales organization. What is manageable (and rarely measured) is sales activities. Obviously, predictive measurements are the most helpful when determining future results. When we focus on leading indicators, like proposal feedback from a customer or the number of sales calls, revenue becomes steady and predictable.

“The only bad news we took from our research is that companies don’t actually measure the metric they can control — Sales Activities. In our study, we found that of all the metrics being used to “manage” sales performance, only 17% were Sales Activities, 24% were Business Results, and 59% were Sales Objectives. That means that 83% of all the numbers on all of the sales dashboards are completely unmanageable. That’s a lot of time spent wringing hands over things you can’t control.”Jason Jordan, Harvard Business Review

Take Action: Add more sales activities to the sales dashboard. Communicate the idea of manageable activities to the sales managers and sales teams; Revenue is an organization-wide effort, a business result that does not rest solely on the efforts of sales. Closed deals are a sales objective that involves more than a sales team’s effort. Both the bottom-line revenue and the number of closed deals are here to motivate more sales activities (the only part of the pipeline which can be managed by a salesperson).

Two: Focus On Customer Actions, Not Just Sales Activities

A salesperson can’t manage customer actions, but actions taken by potential and current customers provide valuable predictive data for a sales team. While customer-centric sales measures are not new, the idea has not gained traction in most sales organizations. In fact, measuring customer actions is usually relegated to the lagging indicator/business result of buying decisions.

Go beyond “making the phone ring” and measure what is being said by the customer – are they providing good reasons for a “no”? That’s a predictive indicator. Did a client provide the names of decision-makers and team members relevant to the proposal? That request is a predictive indicator too.

Take Action: Note proposal feedback, requests for more information, and other relevant customer actions in the sales dashboard. After all, measuring sales efforts by the number of proposals sent is almost meaningless when compared to also evaluating the number of proposals that generated feedback (positive or negative) from clients.

 “Measure to Improve, Not To Prove” – Daniel Stufflebeam, developer of the CIPP Evaluation Model.

Changing Behavior Changes Sales Outcomes

Because the world is changing so rapidly, the need to be precise in revenue forecasting is more important than ever. To create behavioral change within the sales organization, we need more than a prefabricated one-size-fits-all sales process.

At Oak Island, we have found the best approach is to leverage existing best practices and enhance them with solid, relevant recommendations to create a process that looks native from the outset. Our Dynamic Opportunity Scorecard is a free tool that can be used to help sales managers coach teams according to CVOs and KPIs. And by doing the hard work of self-discovery to identify appropriate CVOs, instead of the typical KPI, which may be lagging in nature, companies accelerate down the path of changing behavior to achieve new business outcomes.