If someone asks you whether you have a good sales team or not, what objective criteria or sales metrics could you use to say that you do?
Most people look exclusively at results, rather than inputs, and answer based on whether their sales team hits their number. But here’s the rub: hitting your number does not necessarily mean you have a good sales team. Alternatively, if your sales team misses their number (even if they do this consistently), that does not automatically mean they are bad.
This might surprise a lot of folks. While judging your team based on objective and measurable results (hitting the number) may be a legitimate approach (and correct in many cases), it is not always the right way to gauge if your ales team is good or bad. You may very well have a good sales team that doesn’t consistently hit their number (if the quota is not realistic in the first place) – inversely, you might have a bad sales team even if they do regularly hit their number; their goals might be too easy to achieve, and set at a level where even inexperienced sales teams can hit their number. Here are a few ways to think about when evaluating your sales team:
Firstly, I would look carefully at “inputs” – not just outcomes, or business results. These inputs are what I call “Sales Growth Drivers.”
1) Strategic Drivers
- Sales strategy
- Sales force structure and size
- Sales role design and span of control
- Sales territory management
- Sales pipeline creation
2) Sales force Development Drivers
- Sales leadership
- Continued learning
- Coaching, training and development
- Company and sales culture
- Quality of sales management team
- Alignment with marketing
3) Performance Management Drivers
- Goal setting
- Sales forecasting
- Performance management
- Compensation and incentives
- Motivation programs
- Culture and a meaningful work environment
4) Technology Enablement Drivers
- Information management
- Industry and customer research
- CRM and data
- Sales tools
Secondly, I would look at whether your sales team hits its Sales Objectives, which ultimately link to Business Results. “The measure of a good team is best made at the Sales Objective level, not necessarily at the Business Results level,” explains Jason Jordan, the author of the best-selling sales management book “Cracking the Sales Management Code.” Jason Jordan is a thought leader in metrics-driven sales management, and also a friend of mine with whom I co-authored a book on this very topic.
To this point, while the sales team needs to bring in revenue, the measures of product focus, customer focus, salesperson capability, market coverage and so on are better indicators of sales team effectiveness.
Sales managers deal with 3 levels of metrics:
Business Results – the outcomes you want, but that you realistically can’t manage (like revenue).
Sales Objectives (i.e. Sales KPIs) – metrics you can influence, but are still not directly manageable (like win rate).
Sales Activities – the metrics you can manage every single day (like number of sales calls).
These 3 metrics work in tandem with one another: the Results your CEO wants from the sales team determine the Sales KPIs you should influence, which in turn determine the Activity Metrics you need to manage daily. If you manage these Activity Metrics well, you’ll be able to influence those Sales KPIs, and you’ll ultimately achieve the Results your CEO demands.
Results and Sales KPIs are lagging indicators – they are the results of the activity metrics your sales team did in the past.
It isn’t the Results level that determines whether you have a good sales team. First of all, results are neither manageable nor directly influenceable. Secondly, your results goal set by your CEO and Board could be either too high for your sales team to reach or way too easy to hit. While the latter is less likely, it’s still possible – and if the goals are easy, then even a bad sales team can hit them.
Additionally, it isn’t at the Sales Activities level that you can determine whether you have a good sales team, either. More activities will only lead to better results if they are the right activities, meaning they are targeted, positioned, and executed well. A good sales team is good at strategizing their activities in order to consistently hit or exceed those Sales KPIs.
It’s on you, the sales manager or Sales VP, to provide your sales team with clearly defined Sales KPI goals and supplement these goals with high quality sales coaching and training, concrete sales processes, and the tools and technology they need to succeed.