SALESFind the Right Metrics for Your Sales Teamby Fran.docx

SALES
Find the Right Metrics for
Your Sales Team
by Frank V. Cespedes and Bob Marsh
AUGUST 22, 2017
“What gets measured gets managed” is a longstanding business
aphorism. But today’s
sales technologies enable companies to measure almost
anything, which leads many
managers to try to measure everything. As a consequence,
managers don’t have a
Get the latest from HBR emailed to your inbox.
gn up now
clear sense of what is really driving sales in their business,
while salespeople, who are
inundated with dozens of metrics, get lost in the day-to-day
noise. The result is poor
management of what matters.
The challenge, of course, is to decide on the right metrics.

Consider the results of a
survey of key performance indicators (KPIs) being used by
more than 800 sales teams
across industries. Wins are the most common metric used across
sales roles and
industries. On average, firms measure closed deals and rep
production against quota
monthly, which isn’t surprising. Selling is a performance art,
and “making the
number” should be the goal of any sales organization, but a
closed deal is an outcome
and a lagging indicator; it can’t be used by the salesperson or
sales manager to
improve future outcomes.
This is why leading indicators such as demos, web registrations,
calls, or C-suite-level
meetings are often more instructive. Instead of reviewing
historical results, which are
beyond a rep’s control, they offer real-time feedback on
whether salespeople are
spending their time and efforts in the best way. Leading
indicators are within a rep’s
control. If salespeople are behind on a key indicator, for
example, they and their

managers can change behavior to increase the probability of
success.
Deconstruct Your Sales Funnel
In order to improve sales outcomes and clarify the relevant
sales KPIs in your
business, you need to deconstruct your sales funnel.
Here’s a typical flow of activities:
Prospecting: cold calls, email, phone, LinkedIn, etc.
Qualifying: initial conversations aimed at separating the merely
interested from the NO THANKS, I WANT TO CONTINUE
up now
actual prospects and determining who is a qualified opportunity
Advancing opportunities: discussions with qualified
opportunities to communicate
the value of your product to the right contacts
Closing: final steps in negotiating and winning the business
Post-sale: service, order fulfillment, possible customization,
and onboarding activities

to ensure the client is successful
Every company is different, but every business has a sales
conversion funnel. Some
funnels are relatively short and simple, while others are long
and complex. Knowing
what type of funnel applies in your business is essential to
clarifying key metrics and
performance management practices, including sales incentives.
Consider one SaaS company that sells a menu display and
advertising platform to
restaurants, which is a big but fragmented market. The
challenge for reps is that,
because restaurants all have different budgeting processes, they
must be there at the
right time to close that sale. Once a sale is closed, the firm
incurs low marginal costs in
setting up and maintaining a customer on its platform. In this
situation, it makes
sense to “feed the funnel” and provide reps with incentives,
through proper metrics,
to make frequent and repeated calls.
By contrast, consider another SaaS firm that sells a subscription
software product that

provides big productivity and environmental benefits if the
customer is willing to
alter some traditional workflow processes and use the software
at sufficient scale.
This is a more protracted buying and selling process, where
ongoing customer
education and onboarding is crucial. Awareness and initial
enthusiasm from a
prospect on the capacity to adopt new software can be deceptive
and expensive for NO THANKS, I WANT TO CONTINUE
this firm. Here, simply “feeding the funnel” is a mistake: Lead
generation is less
important than pursuing the right leads. Moreover, this SaaS
firm’s profit margins are
mainly in contract renewals and ancillary services it can provide
if it gets the right
scale and usage in the initial sale. Here, management must
ensure that sales reps vet
the top part of the funnel carefully so that they don’t spend
months chasing the

wrong prospects, while providing reps with the means and an
incentive to manage
that long selling cycle and renewal process.
The experience of Paycor, a payroll processing company, is a
useful example. Like
many firms, its frontline sales managers were typically former
top-producing
salespeople, many of whom were managing other salespeople
for the first time. In
making that transition, they tended to focus on what they knew
best: helping to close
a deal. But after closely examining the selling cycle, it became
apparent that the best
time to work with their reps to influence the sale was earlier in
the funnel. Sales
managers used the leading indicators to drive a 55% increase in
relevant new-
business meetings and a corresponding 50% reduction in
onboarding time.
Make Performance Reviews Count
Finding the right metrics isn’t the end of the story. Selling is
about behaviors, not just
analyses, and making sure that salespeople align their behaviors
with those metrics is

an ongoing process. Performance reviews can help, if they’re
done right.
Unfortunately, reviews are typically underutilized levers for
influencing behavior in
most organizations. Busy sales managers tend to treat them as
cursory, after-the-fact
discussions about quota attainment and compensation, not
coaching about going-
forward behaviors. The result is that, too often, “feedback”
from managers is really a
sermon whose message is “get better and sell more.” Like most
sermons, this may
NO THANKS, I
work when you’re preaching to the already converted, but it’s
too abstract if you’re
not. Clarifying leading indicators can make a difference,
because the salesperson then
knows the behaviors they need to change in order to improve
performance.
Many sales managers begin conversations with reps by asking

well-intentioned but
generalized questions like, “What’s closing this month and how
can we make those
deals happen faster?” In response, reps focus on the next 30
days and the required
onboarding of new customers, and then neglect important
activities that happen in
between. This is one reason why sales output is so variable —
strong sales months
followed by catch-up prospecting during the lean times — in so
many organizations.
After deconstructing the funnel, however, managers can use
different talking points
that allocate attention and resources toward those activities. For
example: “Sofia, you
are making lots of calls and scheduling many meetings, but
you’re calling on too
many small firms and your qualification criteria have you
chasing many prospects
that are highly unlikely to close. Let’s fix your account
prioritization.”
Or: “Arjun, you are behind peers in setting meetings with VP-
level prospects, and we
know those contacts increase our win rate substantially. Let’s

talk about the
organization of your prospects and what we can do to get the
right access.”
Among other things, conversations like these — especially
when reflected in
accessible reports and personalized scorecards — empower reps
to know where they
stand and where to focus. They allow sales managers to provide
feedback about
behaviors, not just intentions. Beyond individual coaching,
moreover, relevant
leading indicators can also spur more systemic means for
generating proactive selling
behaviors: incentives to schedule new-business meetings with
the right contacts or to
pitch bolt-on products that amortize onboarding time and
increase renewal rates.
These steps are within a company’s internal circle of influence,
not in the less

controllable external market environment. But exercising that
influence requires
managers who know what metrics count and who can then
translate data into
relevant selling behaviors. Those managers are not just
discussing quotas and after-
the-fact outcomes; they are truly managing sales performance.
Frank Cespedes is a Senior Lecturer at Harvard Business School
and author
of Aligning Strategy and Sales (Harvard Business Review
Press).
Bob Marsh is the Founder and CEO of LevelEleven. He has over
20 years of
sales experience and works with companies to help build data-
driven sales
organizations.
This article is about SALES
Comments
Leave a Comment
P O S T

0 COMMENTS
POSTING GUIDELINES
We hope the conversations that take place on HBR.org will be
energetic, constructive, and thought-provoking. To comment,
readers must sign in or register. And to ensure the quality of the
discussion, our moderating team will review all comments and
may
edit them for clarity, length, and relevance. Comments that are
overly promotional, mean-spirited, or off-topic may be deleted
per
the moderators' judgment. All postings become the property of
Harvard Business Publishing.
SALES & MARKETING
What Salespeople Need to
Know About the New B2B
Landscape

by Frank V. Cespedes and Tiffani Bova
AUGUST 05, 2015
Selling has always been more about the buyer than the seller. So
any effective sales
model must adapt to changing buying protocols, not ignore or
resist them. This is a
big transition for firms whose marketing, sales-training and
enablement tools, and
wider organizational processes reflect outdated assumptions
about purchasing in
their markets.
For a century, buying has been framed in terms of moving a
prospect from Awareness
to Interest to Desire to Action (AIDA). The AIDA model and its
variants are the basis
for sales funnels at many B2B firms. The typical funnel starts
with a marketing-
generated lead for a “suspect” that, after qualification, becomes
a “prospect,” and
then a customer through steps that are measured and managed.
In each step, sales
people are expected to perform a series of tasks, usually

sequentially, in order to
close. It’s an inside-out process and CRM systems are there to
provide data about
progression (or not) through that company’s funnel steps — the
famous “pipeline”
metrics that dominate so much talk about sales.
But Gartner research (see here and here) indicates a very
different contemporary
buying reality. Rather than moving sequentially through a
funnel, buyers actually
work through four parallel streams to make a purchase decision.
Let’s examine these activities, one by one:
• Explore: Here, buyers identify a need or opportunity and begin
looking for ways to
address it, usually via interactions with vendors and self-
directed information
search on the internet.
• Evaluate: Buyers take a closer look at options uncovered while
exploring, again
leaning heavily on self-directed search and peer interactions as
well as vendor sales
representatives.

• Engage: Buyers initiate further contact with providers (or
accept proposals from
providers) to get help in moving toward a purchase decision.
• Experience: Buyers use a solution, increasingly in pilots or
proof of concepts, and
develop perceptions about its value based on that usage.
With these changes in mind, understanding where customers
are, and how to interact
with them appropriately in a given stream, are now central to
effective selling.
Here are a few tips and insights to help you navigate these
shifts.
The sales force is more important than ever. Regardless of
which path customers
take, or in which order they take them, they want to deal with
people who can help
them move toward a purchase decision, be the internal
champion at the vendor, and
bring it together for that customer. In fact, B2B buyers report
that, compared to other
sources of information, these interactions are the most
influential in their decision

making process:
Find this and other HBR graphics in our V I S U A L L I B R A
R Y
The source considered the least influential is social media.
Don’t believe the hype.
Sales people have not been replaced by digital, and providing
relevant solutions
remains key in most B2B buying scenarios.
One reason why the sales force remains so important to the B2B
customer is that most
products and services sold to business organizations are
components in a wider usage
system at that buyer, and customer value ultimately resides in
that usage, not just the
individual product.
To add to that, business buyers must justify a decision to others
in the organization,
especially as capital expenditures flow less liberally in many
industries since the

financial crisis of 2008. And you are naïve or spending too
much time on your
smartphone if you believe that a combination of economics,
solution identification,
product application, risk management, and political journey
through the buyer’s
organization is now handled predominately online in most
buying scenarios and
without knowledgeable and savvy sales help.
The research also found that, across all buying streams, buyers
emphasized that
interactions with sellers — technical demonstrations, sales
presentations tailored to
my company’s need – should be about the buyer’s needs.
Among the least valued
interactions are sales calls in response to registering for
webinars or events. That is,
core solution-selling and account-management skills still
matter.
Lastly, although buyers certainly use online search, they use it
as a complement to,
not a substitute for, interactions with sales reps, channel
partners, and others at their
suppliers. If anything, access to information online has

increased awareness that
relevant alternatives and best practices about product
applications and service
requirements often reside outside one’s firm. In turn, this drives
the B2B buyer’s
propensity to seek information from vendors who work with
companies across
regions or vertical segments, and who can use that knowledge to
help frame and
deliver solutions for that buyer’s needs.
Buying is a continuous and dynamic process. Specious talk
about disintermediation
of salespeople obscures the real issues facing firms. Sales
people are not disappearing,
but buying processes and therefore sales tasks are changing.
For example, note that in the second figure above customer
references are a close
second in terms of influence, and the nature of references has
changed. In the past, a
buyer might ask for references and that seller would cite a few
satisfied customers.
But through the web, customers connect with each other and get

unedited versions of
others’ experience through review sites such as bazaarvoice and
PowerReviews, and
they gain access to thousands of people at other companies who
can share
experiences and options through community sites such as SAP
Developer Network
and Marketo Marketing Nation.
Also playing important roles are events, white papers, and the
seller’s website —
activities that are typically part of marketing’s domain, not
sales. This puts pressure
on a notoriously fraught relationship: improving coordination
between sales and
marketing, two functions that are increasingly interdependent
but different in their
perspectives and procedures. The marketing–sales relationship
now tops the agenda
of concerns in a survey of B2B executives.
More generally, it’s important to recognize that web sites,
blogs, and other digital
media have made vendor organizations more visible and
transparent to potential

buyers, which has disrupted the inside-out funnel approach.
Prospects now touch
your brand and company at many different points (online,
offline, marketing
collateral, and so on), when they want, and each touch has an
impact on selling tasks.
Buyers value interaction with others at your firm besides the
sales person (e.g.,
product specialists, technical experts, professional services
personnel, delivery
personnel, pre- and post-sales applications resources). In their
buying streams, they
expect the rep to orchestrate those interactions purposefully,
and efficient
coordination of these interaction points must be reflected in an
effective 21 -century
go-to-market strategy.
st
Finally, if you consider the streams that now characterize B2B
buying and what
buyers value in their suppliers’ behaviors, a big disconnect
becomes apparent. Despite

huge advances in technology over the past two decades, most
sales models and
performance practices are the ad-hoc accumulation of years of
reactive decisions,
often by different managers pursuing different goals. This is
why many B2B sales
models firms are incapable of dealing with the reality that
buying is now continuous
and dynamic — an on-going movie, not a selfie or snapshot in a
funnel.
Choices are often false. Despite what you often hear, no single
tactic — e.g., a given
selling methodology, “challenging” the customer, or more “big
data” analytics — will
address the new reality. Aligning buying and selling is a
process, not a one-shot deal.
Going forward, many B2B sellers will need to reconfigure their
selling processes more
effectively and efficiently for each buying stream. They should
not waste lots of time
and energy debating whether to be online or in-person,
interacting via the web or
through sales reps, digital or human. They need to do both, and
create the right mix

for their go-to-market programs.
It’s also important that every group within an organization that
deals with customers
has a shared vision of how customers buy and, more
importantly, a clear sense of
their company’s strategy. The cross-functional communication
and coordination that
is required to navigate this change is the job of leadership. Is
your organization, not
just your sales force, ready to deal with this purchasing reality?
Finally, to paraphrase Churchill, it is not “the end of solution
sales” and it’s not the
beginning of the end. But it should be the end of glib
generalizations about sales and
selling, which remain complex, changing, and people-dependent
activities in most
B2B markets. As a leader, understanding how buying really
works is the place to start
in order to spur effective selling, profitable growth, and better
resource allocations in
your firm.
Frank Cespedes is a Senior Lecturer at Harvard Business School

and author
of Aligning Strategy and Sales (Harvard Business Review
Press).
Tiffani Bova is a Research Vice President and distinguished
analyst at Gartner,
where she focuses on sales and go-to-market strategies.
Related Topics: C U S T O M E R S
This article is about SALES & MARKETING
Comments
Leave a Comment
P O S T
22 COMMENTS
Harry Page a year ago
Nice article, Keep it up Frank!!
POSTING GUIDELINES
We hope the conversations that take place on HBR.org will be
energetic, constructive, and thought-provoking. To comment,
readers must sign in or register. And to ensure the quality of the

discussion, our moderating team will review all comments and
may
edit them for clarity, length, and relevance. Comments that are
overly promotional, mean-spirited, or off-topic may be deleted
per
the moderators' judgment. All postings become the property of
Harvard Business Publishing.
Assignment 1
Read the article What salespeople need to know about the new
b2b landscape.pdf and right a summary with the most important
points of view you notice.
Assignment 2
Read the article Find the right metrics for your sales team.pdf
and summarize it in 2 paragraph. Give your opinion.
Assignment 3
You will see the video "Emerging Powers: India" part 1 and 2
and then answer the following questions:
· What did you find informative about this film?
· What is the basic argument that the film presents about India
and about globalization?
· How does the film interpret such things as India’s widespread
poverty and its periodic flare-ups of ethnic and religious strife?
· Why are India and China so important?
Part 1 https://www.youtube.com/watch?v=JhfRXYLCV_g&t=5s
Part 2 https://www.youtube.com/watch?v=Wo66BQfKxqM

Assignment 4
Answer the following questions
1.- What is the difference between Realism and Neorealism?
2.- What is the difference between Liberalism and
Neoliberalism?
3.- What is the difference between Idealism and
Constructivism?
4.- What theory do you consider is being applied in Ecuador ?

SALESFind the Right Metrics for Your Sales Teamby Fran.docx

Recommended

Recommended

More Related Content

Similar to SALESFind the Right Metrics for Your Sales Teamby Fran.docx

Similar to SALESFind the Right Metrics for Your Sales Teamby Fran.docx (20)

More from anhlodge

More from anhlodge (20)

Recently uploaded

Recently uploaded (20)

SALESFind the Right Metrics for Your Sales Teamby Fran.docx