Management guru Peter Drucker is famous for saying “What is measured gets managed.” When you set up your sales team, it is important to establish the correct benchmarks so that you produce the outcomes you desire.
The first criteria for measuring success is knowing your goal. This is not as easy as it might seem at first blush. Here are some of the objectives companies we have worked with have defined:
● Increasing Revenue – Perhaps the first thing that comes to the mind of every sales manager, increasing the amount the company sells.
● Accelerating the Sales Cycle – Getting revenue in the door faster is an important objective for many companies. The longer the sales cycle the higher your costs of sales. By accelerating the sales cycle, your cost of sales goes down and residual revenues are captured sooner – creating a positive impact on both the top and bottom line.
● Slowing Down the Leaky Bucket – Firm’s with mature product offerings often find that these products receive less share of voice from their sales organization. While newer product offerings may dominate most of your sales teams’ conversations with health care providers, mature products are often highly profitable. As mature product offerings move towards the end of the life, year-over-year mature product segment losses begin to grow (i.e. – the “Leaky Bucket”). The more the bucket leaks, the harder it is to fill the void with additional new product sales. If a cost effective inside sales initiative can reduce losses on a $200MM segment from 10% to 5%, an additional $10MM in revenues can be realized.
Once the primary goal is established, the next step is to quantify that objective in terms of Return on Investment. This can be stated in sales growth, cost reduction, or cost avoidance numbers.
It is important to establish both lead and lag measures. The lag measures are the end results. The lead measures are the predictors of success. Some lead measures can include:
● Accounts Qualified – How many accounts have been identified and qualified?
● Meetings Set – This helps you determine if you are getting high quality leads. If many of your leads turn into meetings, you have a quality lead generation system.
● Number of Opportunities in the Pipeline – Continuously adding to the pipeline is essential for inside sales representatives. Consistency is key. Are you creating enough opportunities to achieve your revenue goals and justify your inside sales investment?
● Dollar Value of Sales in the Pipeline – Equally important is the amount of revenue you can generate from the business in the months ahead. You should establish a baseline of how many dollars in opportunities must initiate each month to realize the results you desire.
It is important to align your inside sales and field sales teams toward your goals. This requires having a Sales Manager who can see the big picture and who can align meaningful measurements for both teams.
The sales program should always be based on ROI. The sales manager should use scorecards to track lead measures. Incentivize individual sales representatives to achieve the benchmarks that lead toward the company’s overall objectives.
When a sales manager designs a sales program with the company’s ROI in mind and establishes meaningful benchmarks for individual representatives or business process outsource sales organizations, they will ultimately facilitate success for both their employees and for their company.
Contact us at Sagamore Sales and Marketing for a consultation: email@example.com