In this SlideShare, Richardson discusses how your organization can implement an ongoing measurement approach that encompasses real-time collection of data rather than solely relying on the traditional approach of surveying “before and after.” The slides show you that a continuous feed of analytics creates data-driven insights for sales professionals, sales managers, and learning leaders about what’s working and where a course correction may be necessary.
Research suggests that those organizations who embrace an approach that incorporates data and analytics into their strategy to improve sales performance very simply outperform those who don’t.
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I was with a large manufacturing company last year who were working with us to improve the selling skills approx. 1,000 of their field sales teams for the first time. When we broached the subject of data and measurement, they rather sheepishly explained that they had lots of data, but their confidence in the quality of this data was quite low. Their instinct was not to trust the data and therefore not attempt to use it in a meaningful measurement strategy. This is not uncommon. The perception that this is hard and data might be unreliable – constitutes an insurmountable barrier for many right from the outset.
Don’t let perfection be the “enemy of the good”. Even if the data in imperfect, at the outset, the value in the process will be about the questions that are triggered for you and your team – not just about the final output. It’s through this iterative process of questioning and investigation that you’ll reveal the data driven insights you seek.
And remember that the qualitative part of the story (the data) is only one half. In working with our customers we always recommend, no matter how good their data is, that they supplement it with stories from the field. In fact, strong stories from the field on their progress can help compensate for lack of perfection in qualitative data. If you work to gather stories from the field and check to see that they align to what the data is telling you – they can often be the most compelling piece of your measurement story when telling it to others.
((HBR article – The New Science of Sales Performance 2014))
In a typical measurement journey, our story has 4 chapters. (Where are these results from? All of our clients?)
- We begin with Learner Satisfaction – The primary job of this stage of your sales transformation is to drive engagement and participation from your sales audience. You can’t be successful with any change initiative, unless the participants are 100% participating . Selecting the right content, applying a design approach that drives relevancy to the sellers environment and facilitation / delivery of content that challenges and inspires the seller must leave your audience with an intention to change. Here we measure content relevancy, seller satisfaction, and commitment to change.
- Chapter 2 of the journey is knowledge retention. To what degree can sellers recall the relevant, best practices when faced with customer scenarios after the formal learning phase has been completed? Sellers can practice new skills unless then can remember what they are trying to do – he we measure knowledge recall, with an expectation that this will improve (not deteriorate) over time. Here, learner engagement with QuickCheck in the 12 weeks after training drove knowledge retention up 17 points or 25%
- Chapter 3 is The extent to which behaviors of sellers change over time – here we measure changes in discreet skill proficiency against both pre-training baselines and established benchmarks. Here, even 6 months after training, learners report to have incorporated significantly more of the desired sales behaviors into their daily activity.
- Only when sellers are committed to change, can recall what they need to know / do and are practicing these new skills will we arrive at our final chapter – changes in operational / business outcomes. Here we can quantify impact and return. Here, 16% more of the learner population reported being at quota for 3 quarters after training – a 76% improvement
((John and Alan – you might want to be prepared to answer what good looks like in each level. I.e. someone might ask – is 83% knowledge retention good or not? We don’t really give a best practice benchmark here.))
**Only 3 quarters worth of data available for 2017 as survey was completed during Q4
Lets take a closer look at these sales metrics
GRAPHS ON PROGRESS OF ACTIVTATED USERS (POLYONE)
GRAPH ON QUICKCHECK ACTIVITY LEVEL
NPS – RED HAT COACHING GRAPH
CONFIDENCE – SCREEN GRAB FROM ACCELERATE (CHRIS)
NPS – RED HAT COACHING GRAPH
CONFIDENCE – SCREEN GRAB FROM ACCELERATE (CHRIS)
<<SLIDE INSTRUCTIONS>>
<<SPEAKER NOTES>>
WIN RATE NOTES:
- Looking at how the actions of a sales team impact the win % of pipeline opportunities is primary indicator of market competitiveness
- It’s a relatively broad way of assessing changes in performance but we like it as it’s likely one of the most accessible measures for companies. Most companies, even those without sophisticated use of CRM’s have a baseline rate of opportunity creation, close rates, and the disposition of those opportunities when closed.
- Given the simplicity of this one, making comparisons between different parts of an organization (team, division etc.) is often possible and provides a barometer of the effectiveness of different approaches, leadership or strategies.
Leaders, however, should not view win rates in isolation because the measurement is often a starting point telling leaders where else to look for clues on business performance.
SALES CYCLE NOTES:
More nuanced but just as important to us is the evaluation of Sales Cycle Duration.
- The greatest barrier to effective selling today is combating the status quo and competing for buyer interest in a sea of competing priorities and distractions. One measure of how effectively your sales teams are generating engagement from prospective buyers, to the degree that they are actively moving through their own buyer journey, is Sales Cycle Duration. According to Accenture: “Only 12% of CSOs believe that their customers and prospects view their companies as trusted partners with the majority considering them as only as vendors or suppliers.”
- Shorter sales cycles indicate higher levels of engagement, a function of sellers delivering more compelling value propositions, effectively floating ideas that reframe thinking and aligning solutions more close meet needs that buyers feel warrant attention
- Shortening sales cycles indicate increasing sales productivity – the No 1. cited business goal for CSO’s today (need data to substantiate but I read this somewhere). May also be accompanied by reduction in overall pipeline values – a problematic dichotomy.
- Finally across a portfolio of sales opportunities, a change in sales cycle duration indicates potential change in opportunity mix between new business and client work. Loyal customers, buying from trusted partners, make quicker buying decisions.
Let’s take a look at how one of these Operational metrics came to life in a recent client engagement. Waters is a publicly traded corporation headquartered in Milford, Massachusetts, that operates in the highly specialized and technical analytical instrumentation market.
Facing v tough, emerging competition that was increasingly commoditizing their market, Waters engaged Richardson to help improve how their sales team could articulate value and combat marginalization. We collaborated on measures to evaluate the efficacy of the program and ultimately selected Win Rate. For Waters, this was chosen as a measure of sales productivity as, in their market, typically there are a finite number of opportunities to compete for. Normally sellers would respond with discounting in the face of competition that was having a commoditization effect. Our training focused on building skills that increased access to business buyers, especially when competing with Agilent Technologies. The results showed that 60% of the population trained, improved their win rate. The increased sales productivity helped drive 10 consecutive quarters of growth at Waters.
PRICING:
Pricing Power as measured by the effective sales price earned at contract execution, is the primary driver of profitability.
However, controlling pricing can be difficult, as market conditions often dictate movements. Effective sellers, however, can control pricing and therefore profitability with strong negotiation skills that maintain the value of the deal through to the signed contract and understanding the skills necessary to resolve price objections as they arise. Justifying prices also requires a sales team to create meaningful value throughout the sales cycle and eventually elevate themselves to the role of a trusted advisor. Given that most sellers are compensated based on revenue generation, adjustments to price can also influence motivation.
CONTRACT VALUE:
And to illustrate the point of the connectedness of these metrics, the final financial metric we most frequently leverage, is Contract Value. A function of sales price and likely product mix.
Sellers today must work harder than ever before. In response to this pressure, sellers are seeking larger contract values so that the deals they close offer more value. Measuring contract value reveals the ability of a sales team to create strategic relationships that position the value of multiple products and services. It’s a useful; financial measure that increases contribution per deal but also is likely a proxy for how well the customer facing aspect of a go-to-market strategy is being received.
PROFITABILITY:
The measurement of profitability takes the element of pricing and adds other factors such as product mix and COGS and even sales costs into the evaluation. It’s a granddaddy of metrics and highly sought after but given potential complexity, it’s not where we’d recommend you start.
– Whereas price is a more direct evaluation of sales team effectiveness and the market, changes in profitability are a subject to factors outside of the control of the sales organization. It remains of interest however, because it is often a measure used to assess a sales teams ability to position the right solution mix. Many of our clients, in their quest to improve profitability, seek to make improvements in the proficiency of selling skills that equip sellers to sell a solution with a very prescriptive product mix – as product mix is likely the biggest driver of profitability. Measuring profitability tells us how effectiveness teams are making this transition & ultimately he degree to which you’re successfully executing your own OTM strategy (ADD COMMENT ON DATA CONFIDENCE TO SUPPORT 2ND BULLET)
For Cargill, the worlds largest privately held corporation with revenues in excess of $125bn, has partnered with Richardson over the last 7+ years to help drive improved business performance. We look at a number of measures here, but the primary goal / metric reviewed is Average Sales Price. Cargill operates in the food & agriculture commodities business and chose Sales Price as a measure of profitability. As we have discussed, sales price is the principle driver of profitability and Cargill sales professional were under tremendous pressure to respond to downward price pressure to maintain volume. The training focused on teaching sellers to more effective manage price objections by positioning the value of the work being done in the supply chain to harvest, preserve, package, & avoid spoilage to deliver products to the client, essentially changing the value proposition. Their ability to measure and maintain price resulted in an increase in YOY revenue per rep of $100k.
The following three metrics, organized under the “Talent” category, can not only be used to assess changes in economic value but also the health of your sales team. A team that is performing against expectations, has a high level of engagement from sellers and has high learning agility, is likely more able to flex and compete in a shifting market than its’ competition.
QUOTA ATTAINMENT:
Deleted bullets:
Function of how all initiatives are operating
Different win rates among various teams or verticals can be compared in order to determine the effectiveness of different strategies.
The % of your sales team that performs at or above quota – is one we like a lot. The market is shifting constantly, so is your product value proposition, your customers and competition. Every year (maybe more frequently for some), sales leaders take all of this into account and set goals for sales teams. They calibrate expectations based on their assessment of these changes – either raising productivity goals to reflect positive shifts in the environment or downgrading targets to handicap sellers because of headwinds.
When combining the changes in earlier metrics, such as the proficiency of a sales team in certain aspects of skill proficiency, with data on the % of sellers performing at / above goal, we can isolate sales team performance & the effectiveness of a sales transformation initiative – in an environment that has been normalized for other factors.
ATTRITION:
Attrition is a measure of sales team health. Sellers who are performing in line with goals set and who are receiving market based levels of compensation & recognition, have high degrees of satisfaction in their roles, thus resulting in lower levels of attrition.
High turnover is a killer for sales team productivity – diverting precious resources away from strategies that elevate performance, as managers invest time in sourcing, selecting, onboarding and ramping new replacement talent into their teams. According to The Center for American Progress, “The median cost of turnover is 21% of an employee’s annual salary.” 1/5 of workers leave their job voluntarily every year. Understanding the underlying causes often requires a more detailed review. Incremental improvements to retention %’s can yield dramatic improvements to sales team productivity – especially as tenure (for many sales orgs) most highly correlates to higher revenue per rep productivity.
TIME TO PRODUCTIVITY:
When new reps require more time to contribute to the bottom line, the productivity and profitability of the entire sales team diminishes.
Relevant when expanding team size or assessing the effectiveness of an emerging product launch, reducing the elapsed time required to get sellers to the target level of revenue production tells us a great deal about the effectiveness of onboarding strategies, management coaching and the relevance of training being delivered. Improvements here have a compound effect yielding greater returns in the out months / years.
First Data Corporation is a global leader in commerce-enabling technology headquartered in Atlanta, Georgia, that helps conduct secure commerce more than 3,000 transactions per second, every day equaling $2.4 trillion per year.
During a period of rapid expansion, with already more than 1,000 sales professional on staff, First Data wanted to improve the way they trained their customer facing teams so that they could reduce their ramp time during onboarding. Historically FD had relied on leveraging their inhouse SME’s to teach new hires the situational knowledge to necessary to effectively position value and sell with clients. This approach was simply not scalable. Couple this with an increasing number of deals per pre-consultant and together, this was creating a constraint to their future growth ambitions. As such, speed to revenue was their priority measure.
Richardson worked to develop a program to help them get their new hires up to speed more quickly by teaching them the consultative selling skills to be customer facing more quickly – as well as incorporating into our design the institutional knowledge and common selling situations to give them the opportunity to practice and rely less on SMEs in front of the customer. After completing what was one of our largest simultaneous program deliveries (44 concurrent sessions) FD experienced a 30% reduction in ramp time.
Lina recreating
Before training with Richardson, those sellers who met or exceeded their quota averaged a 60% skill rating.
After training, 37% more of the population had skill ratings above 60%.
Estimate that 77% of population achieving quota after training. 27 points more than the 50% of the team with a skill rating at or above 60%.
Significant increase in population modelling desired skills and months achieving quota
Customer can expect selling skill improvement to drive a significant increase in the population of sellers meeting or exceeding their quotas
Richardson’s clients have seen resulting sales uplift ranging from 4% to 12%
Results at the low end of this range will result in a payback of <1 year while generating compelling NPV and ROI
Additional opportunity remains to drive value from less attrition, reduced on-boarding expense, and growing sales from current performers
In a typical measurement journey, our story has 4 chapters. (Where are these results from? All of our clients?)
- We begin with Learner Satisfaction – The primary job of this stage of your sales transformation is to drive engagement and participation from your sales audience. You can’t be successful with any change initiative, unless the participants are 100% participating . Selecting the right content, applying a design approach that drives relevancy to the sellers environment and facilitation / delivery of content that challenges and inspires the seller must leave your audience with an intention to change. Here we measure content relevancy, seller satisfaction, and commitment to change.
- Chapter 2 of the journey is knowledge retention. To what degree can sellers recall the relevant, best practices when faced with customer scenarios after the formal learning phase has been completed? Sellers can practice new skills unless then can remember what they are trying to do – he we measure knowledge recall, with an expectation that this will improve (not deteriorate) over time. Here, learner engagement with QuickCheck in the 12 weeks after training drove knowledge retention up 17 points or 25%
- Chapter 3 is The extent to which behaviors of sellers change over time – here we measure changes in discreet skill proficiency against both pre-training baselines and established benchmarks. Here, even 6 months after training, learners report to have incorporated significantly more of the desired sales behaviors into their daily activity.
- Only when sellers are committed to change, can recall what they need to know / do and are practicing these new skills will we arrive at our final chapter – changes in operational / business outcomes. Here we can quantify impact and return. Here, 16% more of the learner population reported being at quota for 3 quarters after training – a 76% improvement
((John and Alan – you might want to be prepared to answer what good looks like in each level. I.e. someone might ask – is 83% knowledge retention good or not? We don’t really give a best practice benchmark here.))
**Only 3 quarters worth of data available for 2017 as survey was completed during Q4
Lets take a closer look at these sales metrics