You might be a master at avoiding the more obvious mistakes sales managers make, like not committing to great sales coaching or having a flimsy sales process. But there are a number of more subtle sales management mistakes that are all too common – and most of them have to do with measuring sales performance.
Do you punish reps who work less than 50 hours per week? Are you keeping your closers accountable for cold call numbers? Does your newest rep share goals with your most experienced reps? Here are the top 4 ways to measure your closers’ sales performance that are just wrong:
Mistake #1: Hammering reps on top-level activities
One of your reps closed a huge deal yesterday that had the whole team high-fiving each other. So why are you asking him how many cold calls he made? Top-of-the-funnel metrics like number of cold calls, hours worked, and so on can be irrelevant when reps are hitting their numbers. Track results, not activities.
Unless someone is underperforming, prove that a metric actually matters before slamming them about it. Top reps get frustrated when they’re crushing their goal and their activities are still being nitpicked – and that certainly won’t help you with employee retention.
Lay out behavioral expectations from the start: you expect your reps to show up, hit their numbers, and have a good attitude. Beyond that, unless an activity directly correlates with bookings, what’s the point? If you call up one of your top reps at 4pm on a weekday and she’s getting her hair done, as long as she crushes her bookings number every month, let her be.
Mistake #2: Focusing on too many sales metrics at once
If you task your closers with goals for number of calls, meetings, demos, follow-ups, revenue, average sales price… it starts getting murky. How are they going to pick through all those metrics?
One crucial element of effective sales management is focusing only on the 5 most important sales metrics for your closing team that really drive business:
Open opportunities in total and per rep (by # count, not by $ volume)
Closed opportunities in total and per rep (by # count, not by $ volume)
(Check out our VP of Sales Zorian Rotenberg’s great post on the 5 key sales metrics for analyzing performance and results for more details.)
You should still measure those general activity metrics, but only for reference’s sake. Don’t set goals for your closers around these top-level activities.
Mistake #3: Comparing reps or teams that aren’t alike
Comparing the Average Sale Price (ASP) of two reps that sell two different products is like comparing apples to oranges – it just doesn’t make sense. Your reps have no control over the pricing model. This also goes for comparing different teams or segments in your company, and it goes for comparing reps of different experience levels. For example, a sales rep that has been at InsightSquared for 2 years probably has a much stronger conversion rate than a rep who is 3 months into the job, so they shouldn’t have the same cold call number goal.
Make sure your comparisons are fair and are based on things reps can take ownership of, like number of calls or calls-to-meetings. Otherwise, you risk losing credibility.
Mistake #4: Turning every problem into a new KPI
Last month, your sales reps gave far too many discounts – and now it’s all you can talk about. But just because something went wrong last month doesn’t mean it should become a top KPI. When you become infamous for having a “flavor of the week,” your reps will lose focus, their performance may not be measurable across long periods of time, and you might frustrate your other managers. Introducing KPIs is a big deal and requires conversations among the management team first.
What other sales performance measurement mistakes have you experienced?