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As the world economy heads unceasingly down how will CEO’s and VPs of sales know if their sales force is struggling because of the economy, their product or because, well, their sales team is “rubbish” (or excellent)?
Time and time again I see the same “dance” where companies hire sales people or VPs of sales, believing they have hired a “rock star” and then a year later fire them. This is a tremendous waste of time, effort and money. And how do CEOs decide to get rid of sales people or sales VPs? They look at the revenue goal they set these people and if they missed the number significantly, they “shoot” them. That’s about as far as the performance analysis goes in most situations.
Why is such a big decision made on so little data? Well, mostly because so little data on sales exists or at least so little data is in the hands of most CEOs in the vast majority of companies.
Most companies have a lot more visibility into what their accounting department does than their sales force. Sales people are still allowed to run around in the field with little measurement. The argument that “sales is an art” is thrown up as defense by sales people who don’t want to be measured. “How can you measure what we do?”
But in my opinion measurement has to happen. Sales does have some elements you may call art but also more elements that will benefit from science. And by applying scientific approaches we can measure many parts of the sales process and (yes even) people.
So how do you know if your sales force is “rubbish” (or great)? Compare it against some standards. Measure different elements of your sales process and people and compare them to other companies’ results. In other words: benchmark.
On November 17, I will be interviewing the authors of a new book all about sales benchmarking. The authors have gathered together a database of information on sales metrics from hundreds of companies, giving us for the first time I know of, some hope of benchmarking our own sales forces. Figuring out how they are doing versus our competitive set and diagnosing the specific bottlenecks and problems in our process and people. I’ll be posting details about how to access the interview shortly.
I hope this is the beginning of making sales force performance measurable in a much more scientific and detailed way. We need to reduce the pattern of hire and fire of sales people and sales VPs based on a very limited understanding of what they do.