Find the Right Metrics for Your Sales Team

Frank V. Cespedes; Robert  Marsh

Article | Harvard Business Review (website) | August 22, 2017

Find the Right Metrics for Your Sales Team

Abstract

This article reports the results of a survey of key performance indicators (KPIs) used by more than 800 sales groups across industries. The most common KPIs are closed deals and salesperson performance against quota, which, on average, firms measure monthly. But a closed deal is an outcome and lagging indicator. This article discusses how some firms deconstruct their sales conversion funnels to identify relevant leading indicators and coach/develop selling behaviors. Thus managing sales performance and not only reviewing quotas and after-the-fact outcomes.

Keywords: Sales; Performance Evaluation; Measurement and Metrics; Salesforce Management;

Format: Electronic

Citation:

Cespedes, Frank V., and Robert Marsh. "Find the Right Metrics for Your Sales Team." Harvard Business Review (website) (August 22, 2017).

Sales methodologies play an important role. A common approach in a sales force allows for consistency, dissemination of best practices, acceleration of learning, and it helps the firm to scale because management then has common metrics to monitor and evaluate. However, it’s rare that the same methodology is relevant across the buying situations encountered by salespeople in a market. This article discusses and provides examples of variables relevant to analyzing sales tasks and evaluating the relevance of a selling methodology: differences within an industry, within a category, and when target buyers change.

Common advice in sales is to provide insights to customers during sales calls. But this advice generally stays at the level of “tell people something they don’t already know” and results in sales conversations littered with many irrelevant factoids. This article provides examples of how salespeople develop and deliver resonant insights in customer conversations and why the framing of insights depends upon to whom they are talking and when in the sales cycle.

Most research and training in sales focus on acquiring new customers. But winning back previous customers is increasingly important: mergers, choice in supply chains, and uncertainty about trade wars mean that B2B customers are constantly re-evaluating relationships with suppliers and making changes. Meanwhile, large buyers account, on average, for over 25% of revenues at publicly traded firms, up from 10% in the 1980s. This article discusses how and why the process for reacquiring lost customers requires a different approach than acquiring new ones and illustrates the process and its implications via a case example.

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Find the Right Metrics for Your Sales Team

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