As parents, we fuss over how many marks our children score. We want our children to keep improving their grades.
For this, we do many things. We instruct them to study longer hours, supervise their study time, take revisions of completed topics, track their scores, speak to their teachers, and so on.
We understand that for our children to achieve better scores, they must focus on certain activities that influence the results.
But when it comes to business, we do the opposite. We focus so deeply on the objectives that we forget to track activities that influence them.
Why We Obsess Over Results
There are three reasons.
One, many factors contribute to a business staying competitive. Increasing sales, streamlining operations, providing customer support, and so on. Tracking activities for all these factors become overwhelming. It’s easier to focus purely on outcomes, which is what leaders do.
Two, if we can do something faster than others, we like to do it ourselves. Hence, many leaders take action themselves in order to achieve the outcome faster rather than tracking people’s activities. [I also believe that the only reason why many parents track their children’s studies is that they cannot give the exams by themselves.]
The third is our obsession with short-term results. We want everything to get done as soon as possible, even if it means that problems will arise in the long run. “Tab ka tab dekha jaayega (we’ll see at that time),” we say.
The result is that sales managers are less in control of their sales numbers and more at the mercy of salespeople’s performance and luck. A business needs luck to succeed, but too much dependence on luck is unhealthy. Don’t you agree?
5 Metrics That Sales Managers Should Track
To rely less on luck and more on logic as a sales manager work,you must focus on activities that contribute to outcomes.
Revenue, gross profit, market share and customer satisfaction are outcomes which get impacted by the following activities.
1.Number of Prospects Met
The higher the number of relevant prospects that your salespeople meet, the larger is the scope to increase revenue.
You should track how many prospects your salespeople meet weekly and how relevant these prospects are. If the relevance is low, it’s time to go back to the drawing board and refine your activities to define your target audience and generate leads.
How will you track how many relevant prospects your salespeople meet?
2. Number of Proposals Sent
The higher the number of proposals sent, the larger the possibility of conversions from prospects into customers.
The number of proposals sent indicates whether your salespeople are engaging with prospects in meaningful ways and whether your marketing is effective. If the number is low, it’s time to coach your people in order to help them refine their sales pitches and closing techniques.
How will you track the number of proposals which get converted into sales orders?
3. The number of Referrals Generated
Referrals from existing customers indicate two things. One, your customers are
satisfied happy with what you currently offer. Two, the probability to increase sales is higher since referred customers are more likely to buy from you and have higher lifetime value.
Are your salespeople collecting enough referrals from your existing customers? If the answer is yes, it means they’re maintaining good relations with your customers, who are also happy with your service. If the answer is no, analyze where your sales team are getting stuck, whether customers are not satisfied with certain aspects of your service, and how you can address their grievances.
How will you track the number of referrals that your team generates?
4. Number of Prospects in the Sales Funnel
A sales funnel is an effective yet underrated technique to increase sales and predict your revenue at the end of each week and month.
A sales funnel is the path that most of your prospects follow to turn into customers. It exists regardless of whether you’ve created one or not. Some prospects make it to the very end while others could drop out at the first stage itself.
Tracking your prospects’ movement through a funnel helps you identify which accounts to nurture and which to fast-track. It also helps your salespeople identify how close they are to achieving their targets at the end of the month and what they must do to get there.
5. Customers’ Ease of Doing Business
Billionaire investor Mark Cuban says, “Make your product and services easier to buy than your competition, or you will find your customers buying from your competitors, not you.”
Ease of buying and engaging is an outcome. To address this, connect with your customers and measure their effort to buy your product. The lesser the effort, the more people will buy from you.
How will you make it easy for your customers to buy from you and not your competition?
The process impacts the outcomes. A solid process leads to predictable outcomes. A haphazard process might yield positive outcomes sometimes. But more often than not, it will destroy your peace of mind.
Focus on activities that impact your sales numbers. You’ll stay in better control of how things function and also improve your sales numbers consistently.