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Business leaders often ask me: what key performance indicators (KPIs) should they track to drive activities from their sales people and deliver results? In my recent Business Cast interview with Eric Esfahanian, VP & General Manager at Gryphon Networks, we talked about KPIs within the most successful sales teams. Eric shared the biggest mistakes most sales managers overlook when tracking sales performance and why CRMs often frustrate sales organizations.
Common Mistakes When Tracking Performance
Eric and I discussed the biggest hurdles sales managers and executives struggle with regarding sales. Eric sees too many organizations focusing too heavily on volume (quantity) instead of what is actually happening during those calls and meetings.
To know if you are getting an accurate view of what’s working and what’s not working for your sales reps, you should be looking at certain key performance indicators.
Key Performance Indicators That Drive Results
While volume of activity might be a simple metric, it’s one that rarely correlates to results. You can better track a rep’s likely effectiveness when you look at other, lesser known performance indicators. Eric suggests that sales leaders use a phased approached when collecting data and measuring the performance of their sales people.
Phase 1: Quantitative Data
Quantitative data let you know if a rep is expending effort. If they speak with nobody, they are not likely to achieve success. These three quantitative KPIs allow sales managers to collect simple elements.
- – Number of call attempts made by a rep
How many attempts are they making during each given time period?
- – Conversations
How long or short is each conversation?
- – Frequency of contact
How frequently does the rep reach out to the prospect?
Phase 2: Qualitative Data
Quantitative data are of little value on their own. Use technology to track information regarding the conversations reps have with prospective clients. By focusing on the conversational aspect of the communication you can get a clearer picture of what is working and what is not. Sales managers can focus on specific conversations related to how reps ask for referrals and how they introduce other products and services. This type of analysis allows managers to understand what their reps are doing, and then correlate that with behavior of top performers.
“A manager’s job is to coach and improve the effectiveness of the largest percentage of the reps under their control.”
– Eric Esfahanian, VP & General Manager at Gryphon Networks
When A CRM Works And When It Doesn’t
Many sales organizations invest in a CRM system to track everything, and then hold their people accountable for logging in a bunch of activities. This is where CRMs can actually hurt a business. Unless you make sure the metrics the CRM is recording are comprehensive, you shouldn’t be using the CRM as a basis for decisions.
Reps manually input data, often through an optimistic lens. Managers use the questionable data for forecasts and budgets. Of course, with questionable data, the projections are like a fictional story – uplifting, but not an indicator of reality.
Instead, Eric suggests salespeople should not author reports. They don’t want to be data clerks; they want to be making sales! So your CRM should be able to capture the phone calls they are making without the rep having to do it (which their software, not coincidentally, can do automatically).
What Should Your CRM Do For An Organization
The CRM should automatically gather data like how many calls are being made, how many conversations are had, and most importantly, the nature of what happens in those conversations.
With that information you can coach the reps on behaviors that will improve outcomes.
A good CRM will also help you track patterns to gather quantitative data on what behavior is shared by your top performers. You might, for example, see that your best reps make 10-20 calls between 4pm and 6pm, 5 days a week. Now you know you should schedule all your reps to be making calls at that time each day. Or you might see that your weaker reps tend to introduce price too early in the conversation.
Whether you use technology or just your powers of listening and observation, remember that a sales manager is there to coach and mentor a team. You need both quantitative and qualitative information to be in a position to help drive results. With the right information, you can produce remarkable results.
It’s Your Turn
Which indicators do you see as valuable ways to measure progress? Share your thoughts in the comments or via Twitter or LinkedIn.