Measuring for Success

Measuring Sales Activity and Results

By Jeffrey Hansler, CSP  

The expression ‘What gets measured, gets focused on!’ bears a great deal of truth to it. We measure to understand, learn, grow, and succeed. We measure for safety, early warning signs, and who’s doing their job right. By measuring and setting standards, we find methods for improvement.  

As children, measurements of success were simple. When someone said they were the best, the challenge was determined by a race, where the winner could be seen crossing the finish line. Many sales operations measure sales in the same way. They compare people and whoever brings in the most sales is the winner. It’s like the race against someone to see who is the ‘best’. In some cases, there is a standard defined on several areas of sales achievement that individuals are measured against and you either meet those measurements or you lose. 

It would be more beneficial for sales to follow the measurement guidelines found in classrooms or organized sports. In these areas, homework was assigned and quizzes were taken and practice drills run. Adjustments were made in places where individuals seemed to be struggling. Then came the game or the test and after these more quizzes and more practice drills for areas that needed improvement. These measures of success along the way to ultimate success – the final grade or championship – were a measure of activities that would ultimately yield the desired result.  

Sales measurements should also focus on practice and improvement rather than the ‘winner’. A strong sales organization is built around measuring for success versus making a measurement of success. This distinction is very important in today’s world of sales for three reasons: 

1. Small differences in perspectives make a big difference in results.

2. The phrase Measurement of Success is focused on the current results. 

3. The phrase Measurement for Success speaks to the process of continuous improvement and the new level for achievement that is always possible. 

In measuring for success, there is an acknowledgment that improvement comes from making adjustments and then measuring results to test those adjustments.

In measuring for success, focus should be on enhancing performance not criticizing current levels and working together for a result. 

Measuring for success is a phrase that moves the focus of measuring from measuring what is to what is possible. In activities that are more complex, it is simply about finding methods of measuring a series of activities and adjustments along the way to the result. 

There is a golf club on the market that has hinges on it. If your swing is incorrect the club breaks at the hinges. Once the appropriate adjustments have been made to the golfer’s swing, the club stays intact. The great thing about the club is that it is designed to measure different elements within different parts of the swing. It’s a great feedback tool for the golfer who wants to improve their game. 

Measurements of activities in the sales provide feedback:  

1.     Set standards for activities that lead to desired sales results.

2.     Measure the activities at different parts of the sales process.

3.     Make adjustments to activities areas that need improvement.

4.     Measure against the new results and repeat.

Although organizations can grow without measuring, organizations without systems and structure in place, result in sales managers that do not understand how to manage or what to measure, which becomes deadly with market shifts. 

Benefits of Measuring 

Without measurements, a sales process appears intangible and complex. I know of sales mangers that are in a constant state of anxiety because they don’t know how to: 

• determine what sales levels will be in the future

• measure who is doing the work that should be done to bring in sales

• hire the right salespeople

Measuring activities would give these sales managers a great sense of relief because it takes the guesswork out of managing sales and salespeople by providing a standard focused on the critical elements of the sales process. 

Other benefits of measuring include the opportunity for positive feedback on solid activity levels and clues to where coaching would be beneficial. Measuring can minimize the friction between managers and salespeople by providing a platform for managers to work with their people, and not against them by focusing on standards and not personal issues. 

By setting standards and expectations required for success, determining suitability of a salesperson to a job becomes easier with clearly expressed and measurable expectations of management and peers. It puts everyone on a fair playing field. 

One of the greatest challenges with sales is that the activities done today pay off down the in the future. Measuring activity provides evidence that you’re working efficiently, focused on the activities critical to success, and moving toward chosen objectives. Measurement also helps determine the areas where improvement is needed. 

Keeping a positive attitude in the world of sales is important because there is plenty of opportunity to focus on rejection and failure. Measuring provides a daily opportunity for victory with daily, weekly or monthly activity goals. It becomes instant feedback and the chance to say, ‘Today I did a good job by accomplishing what I needed’.  This helps keep the distinction between who you are as a person (someone who is successful) and the rejection that is part of the sales process.  

Finally, measurements can be used to journey from the unknown to the known. To provide critical and early perspectives of new product introductions, new marketing material, or new sales personnel.  

Measure Where It Counts 

While measuring sales results has some importance, measuring sales activities is crucial to business and all future sales related decisions. Sales activities provide more information about future success than any measure of sales results. 

As a well-tailored suit starts with good measuring, so should a well-managed sales force. At each stage of the suit making process, measurements are checked: the initial measurement, the measurement of material, the general cut of material, the piecing of the suit, the fitting of the suit, the alterations, and the final fitting of the suit. In the same manner, the activities of the sales process should be measured at each stage. Measuring a suit after it’s cut doesn’t do much good and measuring the sales results doesn’t either. 

Questions to ask in determining what to measure include: 

• What are activities that need to be done along the way that lead to the final result?

• Are they being done correctly to yield the results we want?

• How do we get better yields?

In general, areas to measure are: 

• Resources: Suspects, Leads, and Prospects

• Activity: calls, visits, RFP’s, agreement (closing) attempts, agreements

• Ratios: calls, qualification, contacts, prospects, leads, sales, sales average, conversion ratios

When Antonio measures me for a suit, he doesn’t measure every part of my body.  He measures key areas. For each sales operation, you will determine the key areas to measure. You may even find that while some areas are not key to the final result directly, they may be key measurement areas for moral and recognition. Antonio has measured me so often for a suit that he could probably do it without measuring. But it makes me feel good to get the attention and know he cares about the results. It also reassures me that the final product will be done right and it’s a way to communicate to me the personal value of his service.  

In the same way, sales personnel may respond favorably to measurements that provide a subject to talk about.  

Step One and Two: Set the standard 

The first step in setting a standard is to find out what the top salespeople are doing for activities. The second step is to find the quantity and ratios of these activities as they relate to their results. 

You might discover that it is important to track dials made, contacts reached, dis-qualified leads, suspects, prospects, number of sales, and value of each sale. You would determine the quantity and ratios between these activities and the results. 

This provides a foundation by which to predict future sales (based on the cold-leads available), predict a salespersons future success (by the numbers moving through the process), adjust salesperson behaviors (to keep ratios in line), discover subtle changes that have a magnifying effect on results (by measure deviances from ratios), and discover areas needing attention (training in qualification). 

The foundation provides standards to measure and reward improvement in areas such as higher calls per hour, faster qualification, and higher lead referrals from prospects.  All of these contribute to greater sales for individuals and organizations and allows you to determine not only your overall best sales people, but your best prospect builders, your best lead developers, etc. The standards will indicate when a salesperson is having difficulty in other areas of life that may be affecting sales or when there has been a shift in the market that your entire sales force needs to address. 

If you are building a sales force from the ground up, then analyze what your competitor’s top salespeople are doing or use some of the activities outlined in this chapter as a foundation to start.  

If you have not used standards prior, your salespeople may not be aware of what activities they are doing and they might be suspicious of why you are collecting this information. Treat this as a learning opportunity for the entire sales staff and an opportunity to establish the purpose of creating more success for everyone. The key to a successful sales operation is made through measurement because ultimately it turns the alchemy of sales into science. 

The Most Critical Measurement 

The most critical question regarding measurement is ‘Are the activity standards being met?’ 

 If the standard number of cold-calls is not being done, then it is unlikely that expected sales results will come in. The activity standards are a salesperson’s responsibility. While they may not be able to promise a specific sale, they can certainly promise to do the work required to generate that opportunity. This puts the responsibility of answering the question, “What am I willing to do to be successful in this position?” squarely on their shoulders. 

By the same token, if they are making the number of calls required, but not meeting the resulting ratios of dis-qualified, suspects, and prospects, then it could be a skill problem or a quality of lead problem. A simple comparison to the other sales staff can help determine if it is an individual issue or a market issue. If they’re not meeting activity standards but are meeting or exceeding expected results, then an evaluation might uncover a valuable activity that is contributing to sales.  

In any case, the discussion about activity levels and deviations from activity levels is a great opportunity to make conscious decisions to achieve the desired results. 

The Critical Activities to Measure 

Determining the critical activities to measure depends on your sales structure, market, and product. What never changes is the importance of how to: 

• discover what is critical to measure?

• measure the critical elements?

• relate sales activity to sales results?

Discovering what is critical to measure is mostly a function of common sense, observation, and trial and error. I’ve mentioned the number of leads, calls, contacts, dis-qualified, suspects, prospects, sales, and sales value as a few activities and results to measure.

Measuring should contribute to sales and not distract from sales so the recommendation is to keep measuring as simple and automatic as possible. While technology can do a great deal to assist in tracking numbers, it should not replace a salesperson’s tracking of their own activities and ratios, which keeps the objectives foremost in their mind. This focus helps avoid the up and down cycles that seem to plague salespeople as a reminder to keep doing the activities that contributed to their success.

I recommend a simple ‘tick sheet’. On a columnar piece of paper, mark down ticks in groups of fives for each of the activities that are being measured, and have each row represent a different day. As sales come in later in the process, tracking back to activity levels that lead to those sales opportunities provides a guide for adjusting activities and generating forecasts of sales. In this manner, ratios are built that create a picture of future activities levels that lead to the desired end result.

The ratios provide early indicators for sales personnel. For new salesperson, ratios can be used to evaluate their movement through the sales process. If their ratios are too high, they may not be qualifying accurately, which can be cross-checked. This saves a great deal of time and resources from being wasted on non-qualified prospects that will not produce at the end. If their ratios are too low, maybe they are missing signals that identify true prospects. Ratios that may be valuable in tracking the steps from prospecting to conversion of sales include ratios between leads and suspects, prospects and proposals, and proposals and sales.

Once established for your sales operation, activity and ratio measurements can help you in the launch of a new product. It helps eliminate factors inhibiting sales by allowing you to isolate the causes of problems or successes. If you launch a new product in five areas and have five salespeople, one for each area, and measure sales results, what have you got? Do the results tell you who is the best salesperson? Maybe or maybe it just tells you that more customers live in one area. Does it tell you who worked harder or smarter? Maybe or maybe it was just who was luckier. If you have historical data, it can often guide you to the discovery of who is skilled versus who is lucky.

It is important to remain focused on data collection, tracking, and analysis as tools that are contributing to the desired result. Analysis of activities and ratios can do a great deal to motivate the salesperson and the sales manager by providing them a clear measure of what needs to be done to achieve success.

Active Measuring

While it’s true many organizations don’t measure results, it’s also true that many organizations that value measuring are measuring the wrong things.

Antonio, my tailor, measures slightly differently for cut, style, and seasonal clothing. It’s an important acknowledgement that measures are valuable only as they contribute to predicting success and results in markets.

On a regular basis, measurements should be checked for their contribution to increasing sales. An organization that becomes stagnant with measurements will become stagnant in sales. So, it’s important to stay attuned to the ‘current’ sales environment.

It’s a Lazy Person’s Game

Anyone can work harder to get better results; one of the greatest secondary benefits of measuring is as a guide for salespeople to the easiest sales. Gauging activities and results heightens the awareness of moving a lead through the sales cycle. It becomes apparent which leads yield the best sales results, allowing the salesperson to target the leads that are most likely to produce the best results.

If given a choice, a farmer will pick the most fertile and easiest location to plant the crops. They pick the area based on each of the stages of farming: clearing, fertility of the soil, availability of resources, protection from the elements, and ease of harvest. It is a matter of targeting and farming. Target the right spot to farm and do the farming activities that yield the best crop.

Sales is very similar. By targeting, the salesperson can yield the best results with the least effort. Its about starting with the best lead sources, making sure they are qualified to move ahead, protected from the competition, and developing a willing partner in the agreement. Sales is about applying just enough resource to get the job done.

As the market becomes more crowded, your activity measurements and ratios will foretell to the salesperson where the most fertile ground remains. The most precious resource any salesperson has is their time. It is the only resource that cannot be saved, stored, or held on to. Every second that’s gone is gone forever.

The message that sales is a numbers game is not to be denied. Success comes from refining the process so that effort is spent on the numbers that yield the best. It becomes a personal marketing plan of drawing the sales to you. It is less about going out and capturing them as a hunter and more about picking fertile ground where you can attend to them so they will grow on their own. 

Even in a one-call close situation, it is a matter of tracking the activities that need to be done to move them to the next stage. What is required to allow a lead to become a suspect? How can you get them to move themselves because your energy and your time are limited? How can you get them to assist you in achieving success?

Adjusting Activities and Environments to Improve Results

Discovering the metrics by which to measure a sales force is a process of following success and linking that success to the market. 

Measurement and analysis help build improvement in your sales force and individual salespeople safely. They provide a platform to take calculated risks to discover methods for increasing sales that may have otherwise gone unnoticed and to keep everyone sharp and fresh.

Areas to consider taking risks could include:

• Territories: Switch territories on people. Take a good salesperson and move them to another territory. See if they can do a better job.
  

• Switch activities: Move them from phones to personal visits or from regular mail to overnight mail. 
  

• Switch time of activities: Switch hours of work, time spent on activities, when calls are made (morning, day, evening), and day’s of activity. 
  

• Switch target contact: CFO to CEO, Purchasing to manager, etc.

Finally, there are many more things you can do after you have measured and analyzed results to check the value of an activities contribution to sales. Just ask yourself the right questions:

• What if you switch sales people?

• What if you chunk your efforts? (Chunking refers to grouping certain activities like calling or qualifying or closing.)

• What if you do a media blitz?

Conclusion

The world has gotten more competitive and it’s clearer now more than ever before that success comes from measuring and making adjustments and measuring the results following the adjustments. To be extremely successful, you might need to make a radical change based on the foundation of your measurements. 

© 2005 Jeffrey Hansler  All rights reserved

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Jeffrey Hansler is a professional speaker, author, and consultant. He is a frequent speaker at association events, creating change with communication and is the author of Sell Little Red Hen! Sell! He can be reached at jhansler@oxfordco.com.

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© 2005 Jeffrey Hansler  All rights reserved