In Part A of this series, we talked about the unfortunate miscommunication that most sales organizations have with their front-line sales leaders in clearly outlining the core business outcomes. Assuming that step has been tackled, can your front-line sales leaders tell you how specifically they’re measuring important milestones that will achieve your business outcomes?
“What gets measured, gets managed” – Peter Drucker
Here is an interesting exercise I’d like you to run with your front-line sales leaders:
1. Bring all the front-line sales leaders into a boardroom (don’t do this virtually, so there is nowhere to hide).
2. Using a sheet of paper, have each front-line sales leader draw in big, bold writing, the exact Business Outcomes for this fiscal year.
3. Post all of these sheets of paper on the wall, and triple check that there is 100% alignment of the goals, numbers, language, everything.
4. Next, on a new sheet of paper, have each front-line sales leader write down exactly what they are measuring from their sales professionals that help them understand the LEADING, CURRENT and LAGGING indicators to reaching the Business Outcomes.
5. Have each front-line sales leader come to the front of the room and present this information back to their peers. But now, ask them one simple question:
“How specifically (describe how), will the sales objectives you’re capturing help you understand today and tomorrow if/when your team hits their business outcomes?”
You really want to test a front-line sales leader’s ability to see leading indicators, and think through how they will devise coaching plays if someone is off course.
You also want to ensure that your front-line sales leaders aren’t measuring sales data for data's sake, and that data has very little correlation to the ultimate goal.
I’ll give you a real client example that I see all the time:
Business Outcome = $100,000,000. This will be $20,000,000 more than the previous year. The expectation is that customer review is flat, and the $20,000,000 is 100% the responsibility of new logo acquisition.
To achieve $20,000,000, the sales team will need to hit an overall sales quota attainment of 95%, full expecting that the new hires won’t hit quota, “B Players” will hit 75% of plan, but a handful of rock star “A players” will do +150% of plan.
To also achieve this $20,000,000 goal, we’ve assumed that deal size will move from $50,000 ACV to $100,000 ACV.
Sales Objectives = We interview the front-line sales leaders all the time, and this is their complete answer…
“3x Pipeline Coverage at all times. We expect 1x new proposal to a customer per week, and 5x customer meetings a week”.
Hopefully, you see the misalignment right away:
- How are you measuring deal ACV? What are the contributing factors to 2x deal sizes? Are their more products all of a sudden?
- What is the correlation between 3x Pipeline Coverage and sales quota attainment? What if a sales professional has one deal worth 50% of their quota? How does the balance of deal volume and size play into this equation?
- How are you measuring “customer meetings”? Do you distinguish between discovery, building consensus, proposal and/or servicing calls? Have you found sellers will game the 1x meeting a week to appeal to their leaders?
- What could be done internally if we focused on diverting deals by sellers with the highest conversion? There are people on the team that have a very high probability of getting us to our goals… how can we better leverage this?
- If we’re expecting all our business from new logos, how are we measuring campaigns focused on this? What are we doing to prevent finding out too late that the sales team hasn’t just been churning their current named accounts?
Think of your Business Outcomes as law. Have the front-line sales leaders review each word, sentence, variable of the goal and question how we can align our measurables to give us early warning signs that we’re on pace.
Best-in-class organizations don’t answer this question from the confined framework of “I’ll answer what we have capably to measure today with our broken CRM tool.” No, this is an exercise to expand your mindset on what you would measure if you could, to ensure you can be kept in alignment to your goals.