There is a quote I really love when it comes to sales management, “You don’t get what you expect, you get what you inspect” from Louis V. Gerstner Jr. In fact, it has several applications across business, but let’s just stick with sales for now. Everyone wants a crystal ball to forecast sales, but it is not easy to do. One of the main problems is that we focus on the wrong number for our key performance indicators (KPIs); sales. Yes, it does make sense to follow sales results closely, but doing so only really looks backward, not forward. Past performance does not predict future results.
Keeping your eye only on sales is a common mistake that both salespeople and sales managers make. Actual sales are in the past and there is nothing you can do to change that. You must start working for tomorrow instead of yesterday if you want to sustain or improve your sales. These are the KPIs that you must inspect if you expect good results.
- Pipeline – With no sales pipeline to feed your sales process, there are no sales. Simply put, inspect the list of leads and opportunities that you will be working on for the coming month or quarter. Is it sufficient to reach your goals? Never overlook your sales pipeline. It is one of the single most important predictors for sales.
- Activities – Is the sales team executing the right activities and how do you know? This is the one that we all take for granted. The question is, is the sales team being productive or busy? When you find that sales are down, every salesperson will tell you that they have been busy. Set the expectation of how many phone calls, meetings or presentations you expect over a period of time to achieve success and inspect it.
- Closing Rate – Are opportunities falling through the cracks? If so, why? There are several reasons why this can be the case, but if you ignore it, it will not improve. If you want to close more opportunities, then you must inspect the close ratio.
- Meetings – How often is the sales team communicating? Are you hands off or perhaps even excessive? The less communication and meetings there are with the sales team, whether as a group or individually, the more performance suffers.
- Strategy – This may be a hard one to measure, and it may be more binary than anything. Do you have a strategy? Are you following it or falling behind? If you and your team are not in sync with your strategy, then chances are that old and unfruitful habits are starting back up again. Inspect your strategy often if you want meaningful results.