Who is this article for? Sales managers & business owner first of all, thereafter others involved in sales.
As a business coach, advisor and business owner I am fortunate to have experienced first-hand the interactions with prospects, sales people and sales managers. I have witnessed thousands of these interactions and I know that there is a lot of room for improvement.
When I am dealing with business owners I spend a lot of time in the strategy area as most businesses do not have a clear and articulated strategy in place. The primary goal of this is to identify mechanisms to differentiate the business so that they can become the “biggest fish in their pond.” A well-executed strategy for the dominant player in a particular niche will always be the one that dominates the profits in that market. A classic example would be Apple: how do they manage to make 80+% of all the profits amongst all the brands in the mobile phone industry? Well obviously there are many aspects to this, but one of easiest ways to start developing a unique point of differentiation is to start measuring a different set KPI’s. You know that old saying: “what you measure is what you get”, well the same applies to how you are managing your sales team.
So what measurements do you use on your sales team or yourself? Any? You may not be too surprised that many businesses do not measure this at all, but if there is one, it is likely that the primary measurement is income or turnover for the month.
What are some of the other measurements that you currently use? Please take the time to think of these at this point, as in the comments section below you will be given the chance to jot them down. Here are some measurements commonly used:
- Sales income per person/division/product etc
- The number of sales, e.g. 10 new clients per month
- Sales per region
- Discount level given (or margin achieved)
- The number of new leads generated (this starts to merge into the marketing field. Some companies expect their sales people to focus exclusively on sale conversions, while others expect sales conversion and prospect generation)
- The upsell, or cross-sell activity
- The NPS (net promoter score)
- The quote to close ratio
- Customer retention or rebooking/reordering rate
These are just a handful- you could be doing others, and in fact, if you do a Google search then you will definitely find more. As you will see in a minute, they all tend to focus on a particular area. So what’s the problem here? These are all valuable and intuitively logical KPI’s (Key Performance Indicators) but I have a problem with them, when they are exclusively used to drive sales results. Let me explain.
Top Sales People
A top sales person does the following during a sales interview:
1. Identifies if the prospect has a problem in their current situation
2. If they have a problem, do they really have a desire to fix it?
3. Is their solution able to fix or alleviate the prospects problem?
Written in words this oversimplifies the situation. Most sales people will say that they do this, but the reality is they don’t. The questioning around problem identification needs to go a whole lot deeper than asking the prospect what the two or three biggest challenges they have are. After all, most prospects will tell you that they know what their problem is already. But a skilled sales person will dig a whole lot deeper and in many situations will uncover hidden challenges that the prospect consciously was unaware of. The manner in which the questioning follows will be framed around understanding (a) their past history, (b) their present situation and, (c) their future desired state. All of these points are covered in-depth on my sales training program.
Have you noticed the difference between the typical KPI’s used by the majority of the “sales industry” vs that of how top sales people actually go about their sales interview? Before reading further, pause, stop reading, get up, walk around and consider that question.
The elephant in the room
This question is super important because of that old statement: “what we measure is what we get.” We also know (I wrote an early article on this) that if we focus on ourselves, our product or solution and our need to close the sale, then this all leads to a build-up of sales tension. A tension that both the sales person and the prospect feel. And that sales tension leads to resistance – the arch enemy of sales interviews.
Now that you have pondered on my question, the logical conclusion should be: why do we set up KPI’s that lead to an increase in sales tension, why are the KPI’s all internally focused? Why are they all shining a spot light on how well the sales person dances their dance? What other analogies can I use to drive this point? A successful sales interview is concluded once we focus 100% on the customer’s needs. Where are the KPI’s around this? As a sales manager how many of your leading KPI’s are directed at what we agree is the core strategy for a top sales person?
I could go on and suggest some for you, but possibly there is a better outcome for you. If I tell you now, the human response will be: Oh, yeah I guess so, that’s interesting, that sounds about right ….. A more productive outcome will be for you to self-reflect, brainstorm or to participate in one of my programmes J.
Hoping that you have realised an opportunity awaits you, yours in clarity, Sean