Any good business owner knows that it is essential to keep a close eye on sales and sales performance. While the rest of the company’s efforts may be aligned and working productively, without a strong sales effort; the chances of success are nil.
One sales management consultant, Suzanne Paling has written a helpful guide for the entrepreneur or business owner to assist in the tracking and monitoring of sales performance measures. Her book, “The Accidental Sales Manager: A Survival Guide for CEOs (or owners or presidents) Who Find Themselves Managing Salespeople,” reviews the most essential sales reports needed to maintain control of the sales process.
An essential part of any sales reporting effort is to denote where time is being spent (efficiency) and what tasks are contributing to the sales effort (effectiveness). Obviously, spending large chunks of time that do not result in sales or bring the likelihood of a sale occurring closer is to be avoided. However, that can only be done if the activities are tracked and measured. Therefore, it is advisable to identify a few manageable reports to allow the business owner to maintain control and oversight over the sales effort and ensure that productivity is maintained.
The Call Report
Maintain a list of what prospects and customers were approached during the time period (day/week/month) and what the outcome of that contact or “call” was for the salesperson. In this way, the number and quality of sales calls can be tracked. Over time, the following averages can begin to emerge:
- “Average” number of calls required to “close” a deal
- What job functions within corporate accounts or what commonalities among consumers exist that are most likely to purchase
- For corporate accounts, what industries are most often sold to (and for what uses or purposes of the the product or service).
By then tracking what is included on the report (and what is missing or not on the call list), corrective measures can be taken or additional attention can be given to address any issues.
The Productivity Report
Business owners are well served to track what activities tend to generate what kind of response or performance. The data to be tracked may include: the number of outbound calls, conversations, webinar metrics, voice mails, e-mails, customer meetings, product demonstrations, and proposals generated in a measured time period. Once a standard has been established for expectations, actual performance can be compared against the benchmarks established for each activity.
The Productivity Report serves as an early warning signal to identify where issues may be arising that will lead to sales shortfalls. Especially in longer-cycle sales where multiple sales calls are often necessary to close a deal or make a sale, it is essential to identify issues as quickly as possible to provide remediation before sales are adversely impacted.
Sales Pipeline or Funnel
Maintaining the proper balance between prospects, customers, and those in process of becoming customers is an essential part of managing the sales process. Given that there are often steps to the sale or phases in the sales cycle, it is informative to track where different targeted prospects are in their decision-making to purchase or not. Here again, an early warning signal can be sounded if there are too few targets in any particular phase or if the time to process from one phase to the next is lagging behind expectations and therefore will have a deleterious effect on total sales. Paling offers these as examples of typical pipeline phases:
• Phase I—Decision-maker expresses interest in product or service
• Phase II—Salesperson meets with decision maker
• Phase III—Decision-maker participates in product demonstration
• Phase IV—Proposal submitted
• Phase V—Sale closed/sale lost
The document or report that drives most other business decisions is the sales forecast. Inventory levels, labor allocation, cash flow, etc. are all based off of the sales forecast. The accuracy of this report strongly affects the entire organization and therefore, must be measured as accurately as possible. Certain caveats exist when interpreting a sales forcast. Some common things to be aware of include:
• Are there specific months where a sales person (or even the whole company) tend to outperform or underperfom the average productivity?
• How many accounts drop out/get added from one month to the next?
• Does the rep have an easier/more difficult time achieving quota in one product line vs. another? Are some customer groups easier to sell to than others? Are certain job functions less likely to buy (and if so, at what point in the sales cycle does that decision get made)?
Being responsible for the sales effort is as much a data driven task as it is one based on relationship building with clients and customers. A smart business owner will look to manage the function by using the appropriate tools to manage the process more accurately and gauge success more closely.