To become a real lever for improving results, the sales management must not only be based on the right key performance indicators, but also be used as a decision-making tool and a trigger for action.
Here's how to move from the traditional "meter reading" to a dynamic and useful exchange, in real time, allowing you to concretely improve the performance of your salespeople.
Measuring sales performance: a major challenge
To begin with, it is useful to recall the importance of monitoring salespeople's results for your business, and to return to its very purpose.
I observe in the field that in many cases this monitoring is carried out according to a frequency and modalities that have been designed essentially to ensure that the quantitative objectives will be achieved over the next period.
However, while this is a major point, the challenges of commercial follow-up go well beyond this, and they are multiple. If carried out properly, it allows you to :
- To have a complete vision of the commercial situation at a given moment, and reliable forecasts for the coming months
- Identify any adjustment needs in relation to the defined business strategy
- Identify individual and/or collective points of difficulty and understand the underlying causes
- Analyse success factors to duplicate them and pass on good practices internally
In other words, tracking sales performance, when done well and used wisely, allows you to make informed decisions and act in real time on the levers that will produce sales results for your business.
The importance of choosing key performance indicators...
To achieve this, however, a simple rule must be kept in mind:
In business performance, you can only improve what you measure!
This is an obvious point that is sometimes useful to remember, as the general tendency is to focus on quantitative indicators of results (turnover, margin rate, new customers acquired, etc.) which have the merit of being the simplest to measure and monitor, sometimes to the detriment of qualitative indicators that are just as essential, relating to the "means" of achieving these results (volume of leads and opportunities detected, etc.).) which have the merit of being the easiest to measure and monitor, sometimes to the detriment of equally essential qualitative indicators relating to the "means" of achieving these results (volume of leads and opportunities detected, adequacy between the "commercial effort" desired by the customer segment and what has been achieved, adequacy of the opportunities detected in relation to the targeting criteria, transformation rate, etc.).
I once observed this situation with a client who did not understand why his salespeople's conversion rates were low, because he had not taken a closer look at the quality of their targeting: his salespeople, whose objectives were set in terms of the number of appointments to be made, were conducting interviews with prospects who did not correspond to their target, thus causing their overall effectiveness to drop!
In the field of commercial management, the main risk is therefore to "miss" key information or to misinterpret the results obtained due to a lack of global vision, and to draw erroneous conclusions that will lead you to make bad decisions later on.
... to that of monitoring and analysis
In addition to the choice of KPIs (key performance indicators) as such, the frequency and methods of monitoring are also important:
- If you simply "read the meters" at the end of each month or quarter, for example, this is tantamount to taking note of the situation after the fact, depriving you of the possibility of changing the observed results if they turn out to be negative.
- Similarly, if you analyse the results of a given period without putting them into perspective over time, you risk having a false, or at least partial, view of the actual performance of your salespeople.
A sales pipeline with very few new opportunities can put into perspective a monthly objective that a salesperson has achieved "with flying colours", for example, or, conversely, a pipeline "full of promises" can offset a monthly result that has fallen short.
Use sales follow-up as a real performance improvement lever
So, what are the best practices for monitoring the performance of salespeople?
Here are six that seem to me to be decisive:
1. Define "quanti" and "quali" indicators for each stage of the sales cycle:
Sales is a process. When setting up your dashboards, take the time to identify all the relevant indicators to be monitored for each stage of the sales cycle (lead generation, opportunity qualification, sales proposal, negotiation and closing), both in terms of quality and quantity.
For example, here are the KPIs you can monitor:
- On the lead generation stage: Volume (number of new leads generated) + Quality of leads (correspondence with the criteria of the defined target)
- On the opportunity qualification stage: Volume (number of opportunities detected) + Potential gross value of the opportunity + Forecast transformation rate. This will allow you to obtain a "Weighted Net Value" for each opportunity (Gross Value x Forecast Transformation Rate).
Qualitatively, you can draw up an opportunity scoring grid specifying the information the salesperson must have at this stage to consider an opportunity sufficiently "qualified" (e.g. the customer's internal organisation, decision-makers, issues and points of tension, etc.).
2. Analyse the results in the light of the business model
Depending on your context, and more importantly, your business model, the results observed call for a different interpretation.
If you do most of your distance selling on a very standardised service, you are likely to have a low conversion rate, but a very high volume of quotations made online or following a simple telephone conversation.
The content of customer information gathering and quotation reminders will then be key elements to improve performance.
If you sell a complex and very specific service to a large clientele, there will be far fewer opportunities, but the work of qualification and co-construction with the client will be decisive in obtaining much higher conversion rates and an average basket.
In the first case, you may consider 25% to be a very good conversion rate, while in the second case you may consider it to be a poor one.
Pour aller plus loin, découvrez le webinar, animé par Laurence Bonhomme, sur les leviers de motivation des collaborateurs.
3. Take a dynamic view of results
Remember, too, that the results observed must be analysed and put into perspective over time, as mentioned above in the example of a salesperson with a poor monthly turnover but a very promising pipeline.
The notion of temporality also comes into play when analysing the stages of the sales cycle: these must be completed within a certain timeframe, otherwise the probability of an opportunity being realised will gradually decrease.
It is therefore important that your salespeople enter into your CRM the date they identify an opportunity and identify the transition from one stage of the sales process to the next, updating the estimated amount of the opportunity (which is refined over time) and the probability of the sale being successful.
The reliability of this probability rate must be based on objective criteria shared by the sales staff.
Theoretically, the closer an opportunity gets to closing, the higher the expected conversion rate should be. If this is not the case, there is a problem in the sales process and this should alert you.
4. Assess - and improve if necessary - the reliability of the data used
It is also useful to check over time how realistic the assumptions made by sales people are when assessing the projected value of an opportunity or their chances of winning it.
If the difference between the forecast and the actual situation is too great, this may distort your management and your decisions, sometimes with a serious impact (these forecasts are used in particular to plan stock orders or the production of goods).
5. Identify and explain differences in results between salespeople
In the same way, the differences in results between sales representatives (on turnover, average basket or transformation rate, for example) must be noted and studied: are they numerous or rare, significant or insignificant...?
When they exist, they must be analysed and explained: is the difference in turnover between two salespeople explained by a difference in seniority/experience? By the nature of their targets? Characteristics linked to the geographical area in which they operate? If not, you will need to ask yourself what difficulty or shortcoming this reveals for the salesperson concerned in order to find a way to resolve it.
6. Mixing individual and group trade journals
Finally, the situation that I most commonly observe in the field is as follows: the salespeople carry out regular individual reporting based on quantitative indicators (turnover, margin, number of appointments, conversion rate, etc.), and their manager leads a weekly collective sales review during which the results of the various salespeople are examined.
It is often much more productive to organise individual sales reviews to detect any difficulties a salesperson may be experiencing or to provide effective support in dealing with opportunities, and to reserve group time for recalling successes, sharing good practices or analysing the difficulties encountered on a deal when they can serve as an example to help resolve subsequent ones.
Monitoring your sales staff according to these 6 main principles will enable you to develop a global and precise vision of your company's sales situation in real time, and to make the most of it in terms of: decision-making, implementation of adjustment actions, and ultimately, improved performance.
How to manage your sales team in a difficult situation?
In this webinar, hosted by Dominique Seguin, Managing Director of KESTIO, discover the 4 keys to regain control of the situation
