Are you making sales — or measuring sales activity?
The amount of time that management spends measuring sales activity and salespeople (or, even dumber, the ROI of some investment they made in CRM) is generally wasted effort.
The same amount of time could be invested in making millions of dollars worth of sales if the salesperson was just pointed in the right direction and trained what “to produce” rather than what “to do.”
How do you measure sales success? What’s on your sales dashboard? What’s on your manager’s sales dashboard?
Most dashboards (big picture numbers) are full of useless information that only leads to depression and posting your résumé online under an assumed name. Result: You can get another sales job using some other useless dashboard. It’s not only frustrating; it’s also career stifling.
Maybe I’m old-fashioned, but I measure sales in 3.5 ways:
1. How many sales did you make?
2. What was the dollar amount?
3. What was the profit?
3.5 What was the source of the sale?
All other measurements pale by comparison.
There are many sales managers who measure “activity.” Complete waste of time. If you’re comparing a salesperson who makes 100 cold calls a day but zero sales to a salesperson who makes one appointed sales call from a referral and makes one sale, what’s the measurement?
Will the manager yell at the guy who made the sale? Will the manager congratulate the salesperson that made 100 cold calls but no sale? The 100 cold calls completed the activity requirement but had a zero return, yet his dashboard will show he made 100 cold calls.
The manager will say, “Great job, Bob! Keep up the good work. It’s all in the numbers, and eventually your numbers will catch up to your activity.”
This is not just absurd, it’s also pathetic.
And worse, the sales manager will criticize the guy who made the sale because he wasn’t “active enough.”
I may be old fashioned, but I’m pragmatic, especially about the sales process. Measure sales, not activity. Measure dollars, not activity. Measure profit, not activity. Document sources, not activity.
I don’t care about activity, even though activity may eventually lead to results. The real question is: what kind of results? If you have to measure a salesperson’s daily activity, you have hired the wrong salesperson, or (worse) the wrong manager.
I don’t want activity. I want proactivity.
I don’t want activity. I want productivity.
I don’t want activity. I want profit.
When you understand the difference between activity, proactivity, productivity and profit, then and only then will you understand the difference between a useless cold call and the power of an unsolicited referral. The cold call is an activity. An unsolicited referral is productivity and profit.
A salesperson or a sales manager looking at activity without understanding what the activity actually is, or produces, is basically staring at a black hole — and worse, blaming some one or some thing, rather than taking responsibility to study “What am I doing with my time?” or, even better, “How am I investing my time?”
Here are some measurements to uncover reality:
- Is this the highest, best use of my time?
- Will this produce the best results for my invested time?
- Is there a better way for me to achieve a higher result?
- Am I frustrated with this activity?
- Is this activity producing sales?
- Is this activity producing profit?
- Is this activity getting to my attitude?
- Am I being rejected so often that I’m becoming reluctant to pick up the phone?
- When I go home at night, what’s my feeling about my job, my boss and my future?
The combination of these questions could be the best use-of-time tool ever created. If you know me, you know that, other than cold calling, I consider an all-day course on time management to be the biggest waste of time on the planet.
“Highest and best use of time” ties together perfectly with “productivity” and has nothing to do with “activity.”
Now that I’ve buried activity, time management and cold calls, it’s time to move on to pipeline.
When The Tubes recorded the album “The Completion Backward Principle” in the early ’80s, their hit song, “Talk to You Later,” was a satirical comment on how backwards politics was. So, they started at the core and worked forward to society.
I created a similar backward principle in the early ’60s. I was running my dad’s kitchen cabinet factory, and the output production goal was 200 cabinet doors per day. Somehow I knew if we didn’t cut and prepare 200 doors a day, we could never produce them. So I started with “cutting” rather than measuring activity. Surprise, surprise: Once I “measured” 200 doors cut, I ended the day with 200 doors produced. No rocket science there.
It’s the same in sales. If your goal is two sales a week and it takes four appointments to get one sale, then you need eight appointments. If it takes four calls to make one appointment, then the goal is NOT two sales; the mission is 32 calls. Duh.
Got activity? Or got sales?