Sales Benchmarking: What to Measure in a Tough Economy?

To turn the tide on sputtering revenue numbers, sales organizations ratchet up pressure on sellers to hit targets.

Many will seek a fool-proof formulaic antidote. The more scientific it feels, the more control it gives over success–or so they presume.

Some swear by sales benchmarking.  Landslide Technologies’ SFA (sales force automation) application ensures you can “govern the sales process in an effort to drive large deals through the sales pipeline in a consistent manner."  Just use the SFA application to track your big deals and they’ll pump out new accounts like a canning machine on an assembly line.

Do benchmarks work?  Or are they a desperate attempt to CYA at each level of the food chain in the event of a day of reckoning?

One recent article from a worldwide sales training company described benchmarking as “a sales rep’s GPS, helping to map out routes that were either successful or time-consuming in the past in order to devise a more efficient course”.

Here’s their GPS system:

To simplify this already-simple model: all things being equal, if you make more calls per day (CPD) or increase your close rate (CR) or increase the average size deal (ADS) or if you have more salespeople (SP), you will increase your AS (Annual Sales).

The author of the article lauds this wildly lagging indicator of performance stating, “their (sellers) improved time management efficiency as the result of this benchmarking model will free themselves up from dependence on marketing departments for leads, support and differentiators.”

I couldn’t make this stuff up.

Feeling liberated yet? What a relief! Without burdensome leads, support and differentiators from marketing, sellers can work the levers on the benchmarking formula and land on their AS (don’t pardon the pun).

Some of the largest sales organizations tell their team to abide by their model – or else.

Now, let’s stipulate that tracking and measuring sales activity is critical to success. Still–too many sales organization have a knee-jerk response to sluggish short-term performance, namely engaging in short-term solutions.

There lies the slippery slope of micromanagement.  Knee-jerk short-term solutions to short term indicators.  It’s a recipe for low trust and high turnover.

Eventually, quality selling activity gives way to “prettying up” the spreadsheet. “My, that’s a good looking chart,” says the visiting exec from HQ.  Meanwhile, the team is thinking, “those numbers are bogus; plugged into Excel the night before to impress the brass.”

GIGO.  Garbage in, garbage out.

When I managed a regional sales organization, corporate decided to split the sales force into hunters and farmers–to improve the “cost of sales” ratio of gross comp to revenue.

We lost a $10.5 million deal. Why? We severed the relationship between their rep and the procurement director.   They, in turn, severed us.

We broke their trust, plain and simple.

What benchmark tracks lost accounts and missed opportunities due to relationship issues? None I know of–yet their impact is an order of magnitude bigger than what benchmarks mark.

Harvey McKay (author of Swim with the Sharks without Being Eaten Alive) offers a better predictor of selling success than all the formulae, algorithms and sales funnels combined. It’s a list of questions he calls the McKay 66.  He suggests that relationship-oriented information is king (mostly centered around the client relationship – not their stated needs).

For example:

* #39. On what subjects (outside of business) does the customer have strong feelings?
* #55. What is he/she most proud of having achieved?
* #58. What moral or ethical considerations are involved when you work with this customer?

Doesn’t it make intuitive sense that knowledge of answers to these kinds of intimate questions reveal more about our progress with a prospect or account than the number of dials, appointments or calls?

Selling always was and always will be, first and foremost, a referendum, not on process and statistics, but on the loyalty developed between sellers who can build relationships with buyers.

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