We recently sat down with Jason Jordan, author of Cracking the Sales Management Code and partner at Vantage Point Performance, to get his perspective on how sales leaders today can take a data-driven approach to managing their teams and improving performance.
Q: Today, everyone wants to talk about big data and being data-driven. Marketing is focused on A/B testing and conversion rates; support is looking at NPS and churn. But sales still seems to be stuck in this place of thinking of sales as an art form. Why do you think that is?
A: I think that the sales force actually has too much data, which is another way of saying that the sales force isn’t really good at knowing what data is important. And I think that we’ve fallen into the trap of thinking that the more data we provide to the sales force, the better service we’re doing as sales leadership. The further assumption made is that if we give the sales team more data, then they’ll use it to make better decisions.
The problem is that we’ve given the sales force a lot of data, but we’ve given them no decision-making rules. So it’s almost to the point that sales gets paralyzed by all this data. We get all these reports up on a screen and we can print them and sum them around, and we stare at the data but we don’t really know what to do with it. The real challenge isn’t creating more data but finding the data points that are really important. This is the challenge sales has right now and that’s part of the reason we did the research that went into our book Cracking the Sales Management Code.
Q: In your experience and research, what are some of the data points that are the most important to collect? And what metrics come out of these?
A: Well, the most important metrics are clearly revenue and quota attainment, and those are the ones that everyone gathers and reports. But the problem with that data is, as important as it is, we can’t manage it. As much as we talk about it, you can’t manage quota and you can’t manage revenue.
The most important data is the data that informs you of what’s actually going on in the sales force and helps you manage reps toward higher performance. So from my perspective, the most important data is the data that gives you insights into how you can sell and manage better. And it’s not outcome data! Revenue tells you how great you were at selling last month. And that’s informative, but what you sold last month is not going to help you sell more this month, unless you can use it to identify trouble and look at what people are actually doing and how you can manage and sell differently. The most useful data is around sales activity.
Q: So how do you define sales activities?
A: Sales activity is the actions of the sales force, sales management and, to some extent, sales support. It looks not just at the volume of calls sales people are making, for example, but who they are calling, how productive the calls are, whether they lead to more calls, etc.
There’s clearly a lot of sales management activity that we talk about but don’t measure all that well, which is coaching. Very few organizations measure the volume or quality of coaching that’s taking place, and it’s not that hard to do. You can also measure the volume of training that’s being provided to managers and their reps, CRM usage, investment per FTE – the list goes on.
There’s a lot you can measure, but the biggest challenge is to really identify what the important activities are for each role. I think that if you went role by role in your sales force, you could probably identify 2-3 activities that would really make a difference in whether each person succeeds or fails. And those are the metrics you should be collecting and reporting – and they won’t be revenue growth. They will be things like doing better account planning or making fewer calls on higher impact opportunities. Think of the activities that ultimately lead to greater revenue performance, and those are what you want to track and attend to.
Q: In addition to revenue, what metrics do you find sales leaders focusing on that typically wind up being vanity metrics that don’t really lead to improved performance?
A: The forecast. Every senior executive is watching their forecast number like a hawk. And it’s really nothing more than some fabricated guess of future performance. I was talking to a group of senior sales executives the other day and I was trying to make the point that at the top of the organization you care a lot about the forecast because you use it to allocate resources, give guidance to investors or C-level execs, etc. But the deeper in the organization you go, the less people care about the forecast. By the time you get to a frontline sales person, they really would rather not have to forecast at all. I’ve never heard a sales person say, “If I didn’t forecast I would never make my quota.”
No forecast has ever changed the actual forecast. We’ve done some research and depending on the size of the organization, every manager spends 5-20 hours a month forecasting or doing reporting that ultimately leads to forecasting. That’s hundreds of thousands of hours a month sales leadership is spending doing nothing but handing guesses upward into the organization. If they could take that time and spend it managing better downward, it would be much more productive.
Q: What technologies and trends do you see emerging that enable sales managers to more effectively measure and improve sales processes and performance?
A: I think we’re on a journey. The first CRM systems were very rudimentary and meant to collect data and report it upward for forecasting purposes. Then the challenge became that the data was dirty and corrupted, so for 5 or 10 years we spent tons of money trying to get the databases clean. Then came reporting, so we see a lot of tools that have really taken reporting to the next level and can provide not just sophisticated use of data but useful analytics.
People are starting to catch on that you can have a lot of data, but to the sales force you must present it in a simple and compelling way. On one side there’s technology that’s making data easier to collect, like voice recognition for example, but the biggest benefit I’m seeing is data being presented in a more concise and directive way as to what management should be doing. There’s plenty of data, but it’s getting it out of the system in a usable and insightful way that’s really the challenge. I think there has been huge progress made in the last 10 years on that front.
Q: Some companies are still struggling to collect that data in their CRMs, and you also mentioned the data cleanliness challenge. What is your advice for companies currently looking to improve their quantity and quality of sales data so they can start getting these actionable insights?
A: If you focus on a handful of data points that are very important, you will find a way to get them and make sure that data is very clean. But if you go into it thinking, “We need as much data as possible so we can manage better,” then you set yourself up for failure both on the data collection and the data reporting side.
Q: If you could give only one piece of knowledge to sales leaders and teams struggling to hit their quotas, what would it be?
A: Focus. But it’s not as easy as it sounds. Sales reps get up in the morning, they get to the end of the driveway and they can turn left, right or go straight. Or if they’re scared enough they can put it in reverse and go back inside. Which direction they turn, which customers they call on, which deals they pursue with the most energy matters – just getting salespeople to focus on the right opportunities has a revolutionary effect on their productivity.
The same goes for sales managers. Sales managers have a choice of whether to spend their days doing reporting or improving sales reps’ performance. If they choose to spend more of it improving sales reps, which sales reps? Do they spend equal time with all of them or are there some that require more attention? And if you’re senior leadership, focus on the important stuff that’s going to move the needle; don’t just stare at the needle.
Literally, from the bottom of the organization to the top, the one thing really missing is focusing on the important things. There’s no shortage of things you can to do improve the sales force, but the question is, which of those important things can you really pay attention to? Because you can’t do it all. Things are distracting, priorities get confused and you end up wasting time. In sales more than any other part of the organization, you don’t have time to waste because you have monthly or quarterly quotas. The sense of urgency is real, so focus is the most important thing by far.
Q: Where focus is placed and the ability to zero in on priorities has a lot to do with the sales processes that have been put in place by management. Do you have any insight into how companies can build more effective sales processes and make sure that pipeline is set up for reps to succeed?
A: Sales process is a term that’s used a lot. When most people use the term “sales process,” they mean an opportunity management process. That’s when you identify a lead and take it through the stages of the sales process and close it. There’s also an account management process, where you strategically plan for your large accounts. Then there’s a call management process, which focuses on activities that help you make better sales calls, like planning and debriefing. Finally, there’s a territory management process which is understanding how to allocate time across hundreds of prospects and customers. So when we think of sales process, we think of 4 processes: call, opportunity, account and territory. But most people think about the sales opportunity process as their “sales process.”
The guidance for designing a good opportunity management process, or sales process, is to mirror the customer’s buying process. I think we spend a lot of time thinking through what we want our salespeople to do and documenting that, but in reality we should spend more time thinking about what the buyers do and documenting that. If we understand what the buyers do, then designing the sales process is easy.
While the customers are assembling their buying criteria, we should be influencing their buying criteria. When they’re assembling a short list of alternatives, we should be influencing those alternatives and positioning ourselves as the winner. If you think through what the buyer’s doing, really selling is just about mirroring that and holding their hand along their buying journey. But we focus so much on the selling journey that we get detached. Designing a sales process is as easy as designing a buying process
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