This post was originally published in September 2015 and has been updated for freshness, accuracy, and comprehensiveness.
Every sales organization has room for improvement, but changes can only be made when you truly understand your areas of need. As I like to say, if you can’t measure it, you can’t manage it. Ultimately, sales leaders are beholden to one magic number — revenue — and often use metrics such as pipeline, average deal size and time to close as confidence measures to indicate that they can reach sales targets or if there is revenue at risk.
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There are dozens of sales metrics that can be tracked … so many that some become superfluous when determining whether the sales force has the capabilities needed to hit their quota. Keeping track of lagging key performance indicators (KPIs) helps evaluate what worked well and what didn’t. Lagging indicators alone are not enough, however. By the time leadership looks back on past performance, a new quarter or year is underway and the sales organization is no further ahead in building the capabilities and infrastructure to meet future performance goals. In enterprise sales where cycles can be nine months or more, it is critical to get ahead of the game.
Mike Schultz, co-president of RAIN Group, a Qstream partner, is a world-renowned consultant and sales expert who has co-authored two books and been named a Top Sales Thought Leader by Top Sales Awards. Schultz developed a list of eight sales metric categories — with a mix of leading and lagging performance indicators in each — as a guide to the essential list of metrics sales leadership and sales enablement should track.
In addition to Schultz’s list, here is a round up of supplementary sales processes and metrics sales enablement leaders should track to gain intel for planning and adapting programs that continuously meet sales targets.
Before pushing forward into the selling process, setting up a solid operational foundation is vital to track progress. This includes collaborating with sales management and enablement to identify the metrics to track, displaying those metrics in visual dashboards, defining and reinforcing a robust sales methodology, and ensuring that the sales forecasting process gives an accurate picture. The harmony of these four things will keep sales operations, management, enablement and teams honest, and set up a framework for positive (not punitive) analysis to identify broken processes or impediments to sales success.
Measuring your sales reps’ readiness to sell is the foundation of a great sales rep centric program, which goes beyond the initial sales onboarding program. It’s imperative they have the ability to add value during the customer’s buying process to match needs with solutions if they are to fill the pipeline, win deals, and identify with post-sale expansion opportunities. Measuring sales proficiency against competencies needed to be successful is a must so that sales managers can understand reps’ knowledge, strengths, and weaknesses continually throughout their tenure and coach against any gaps.
Sales enablement means different things to different people, so it’s measured in many ways. Through the lens of sales competencies, this all-encompassing process starts with the sales-talent lifecycle — attracting, onboarding, developing and time to value. Sales enablement leaders are accountable, together with sales management, to equip sales reps with knowledge, skills and resources they need to originate and nurture deals to close. This starts with understanding the areas of most need and impact to design a sales enablement program. By measuring product, pricing, message alignment and competitor objection knowledge of each rep, sales managers have the insights on hand to focus coaching on, and sales enablement leaders know what to include in training programs.
No matter how good your training program is, your sales program will fall flat if sales managers don’t coach effectively and continuously. Many attribute ineffective training to a lack of time, but this can be solved through technology solutions like Qstream, which can increase coaching effectiveness by 55%. How? By surfacing knowledge and skill gaps of each individual to enable time-constrained sales managers with the data needed to pinpoint coaching actions where help is needed most. Coaching recommendations triggered in real-time better equip sales managers to immediately develop their team and improve sales performance today, not at the end of the quarter when it’s too late. The more relevant a sales manager can make each coaching interaction, the more quickly rep confidence and sales proficiency builds. Sales coaching, after all, is not a one size fits all approach. Measuring coaching recommendations and actions taken, as well as team vs team proficiency, is a must-have measure to get a 360 degree view of all inputs to sales success.
Opportunity Stages and Skills
The opportunity metric organizes prospects based on their value and perceived probability of closing the sale. However, do you know each rep’s capabilities at each stage of the opportunity and whether they have the necessary skills to progress to the next stage? Training and measuring sales skills at each opportunity stage — discovery, qualification and negotiation — and overlaying this to the opportunity stage will give invaluable insight of where to focus coaching efforts.
Define What Matters
It is up to each organization to define the metrics that most closely align with its priorities and goals. This will allow sales enablement leaders to pinpoint areas of improvement and impact before forging ahead with their sales strategies.
Almost all of the metrics, however, can be bucketed under three categories: performance, productivity, and proficiency. Download our eBook, The 3 Ps of Winning Sales Teams, to learn more about how these metrics connect and how to use them to your advantage.