Sales is a performance measure driven environment. Agile sales departments typically have a set of measures to track and benchmark both individual and group performance. Sales teams also track the success of new product offerings or changes to an internal process using performance measures. Deciding which agile sales performance measures to use can be a game of trial and error. Implementing relentless improvement using sales performance measures can help you improve your team performance and ensure that you are using the right actions to drive revenue.
But, what steps have you taken to ensure that you are using the best sales performance measures at the right time?
Establishing Your Performance Measures Baseline
We previously covered the first step in establishing your baseline, using the Revenue Prioritization Formula (RPF) to determine the sales initiatives that give you the best ROI. Your next step in establishing your baseline is deciding what leading and lagging measures to use to support your strategy. You will focus your relentless improvement using these chosen sales performance measures.
Here’s an example of establishing your baseline. Suppose your RPF determined that selling your premium product to existing customers has the highest ROI for your company. In that case, that will more than likely be one of your highest priority sales initiatives. To support this initiative, you may choose to use the performance-based leading measure of activity by type and existing customers’ growth rate as your lagging measure.
Operational Runway for Sales Performance Measures
Once you have established your baseline, you need to ensure that your operational runway is set up to properly support you and your team. Your agile sales operational runway must be clear to understand and provide easy-to-use tools. It comprises tools and general business-critical systems, such as your CRM, quoting tools, contract management, communication systems, product support systems, financial systems, and marketing systems. The operational runway also includes the processes that guide these systems’ use and how they interact with the business. To support your business needs and enable your teams to succeed, you need to set up your operational runway correctly from the start.
It is crucial that you use a single source to store and track all your data. The data for your sales initiatives and the leading and lagging indicators should be easy to access and review. For example, you should set up reports in your CRM. You and your team can use dashboards to display multiple reports comparing data from different times. Your sales team will also need support and training on best practices and sales collateral for offering your premium product to existing customers.
Let’s continue with the above example. You want to sell your premium product to your existing customers. You need to track activity by type and the growth rate of existing customers. For the sake of ease, let’s say you track sales monthly. Some of your operational runway’s basic needs are to ensure that all reps log their activity accurately and consistently in your CRM and record sales of your premium product by the customer. Reporting for the current month and the previous month is also essential to help benchmark your performance.
Relentless Improvement using Sales Performance Measures
Relentless Improvement is part of the agile sales mindset culture for teams in our Sales Accelerator Playbook. The model we teach our clients to use to implement relentless improvement is called Plan-Do-Check-Act, or PDCA.
Your first step is to plan a relentless improvement effort. Determine what sales performance measures you will use, your desired change, your stakeholders, and what you need from your operational runway. You also need to create a hypothesis statement of your desired results and the benefits of this result. This statement is what you refer back to during each subsequent step of PDCA.
Based on our earlier example, a simple hypothesis statement might be, “By increasing activity by x amount to our current customers; we will increase sales of our premium product by x amount.” Of course, your hypothesis would be much more detailed to help guide you from where you are to what you want to achieve.
Your next step of PDCA is to carry out the change. Changes may include offering additional training and resources to your team. You will also create reports and dashboards to track the data. The data from this step is crucial to your next step in relentless improvement.
Your third step is to analyze the data. During this step, you will refer back to the hypothesis statement you created in the first step. Did you get the results you expected? Are the results inconclusive, and you need to continue your testing? Should you be using a different measure?
Based on the analysis done during the last step, your fourth step is to take action. This action could be using a different measure, collecting more data for a more extended period, offering additional training for your team, or moving the levers on the activity types your team is using. Depending on your results, you may find that you need to revisit previous steps to implement relentless improvement using sales performance measures.
Benefits of Relentless Improvement Using Sales Performance
Taking steps to ensure that you are using the best sales performance measures at the right time can help bring order to the trial and error of making the most of your agile sales performance measures. Establishing your baseline, supporting your business and team’s needs through your operational runway, and using PDCA to implement relentless improvement provides a prescriptive model to help test and refine the performance measures you use for your sales teams.