Telling Signal from Noise when Measuring Sales Performance
By Colleen Francis
When we use data to measure what we do, we’re doing more than just making a decision on what we want to look at and improve. We’re gaining an understanding of what statistician Nate Silver describes as “the difference between what we know and what we think we know.”
Reaching both those goals is crucial for sales leaders.
As I cover in my book, Non-Stop Sales Boom, having a rigorous, objective sales forecast and performance measurement system is an absolute must if you want your organization to thrive. And yet there’s more to this than meets the eye.
While you’re right to strive to gain an edge on the competition through better forecasting and performance measuring, you won’t find what you’re looking for unless you analyze your team’s performance objectively, without bias and with a focus on where you want things to go in your organization.
Look before you leap.
In the marketplace today, there are two big mistakes I see in how people use the ever-growing amount of data to make decisions.
First: decisions are too often made based on gut feel first and then reinforced by data rather than the other way around.
Experts who study human behavior warn us about how this can happen. They call it cognitive bias: a naturally occurring blind spot in thinking that can lead us to make bad decisions even when it’s supported by what seems like compelling data or statistical evidence.
Avoid that mistake. Look at data first and then make your decisions based on what you see. Give data the opportunity to change your mind.
Check your facts.
The second big mistake: working with unreliable or incomplete data.
I regularly advise clients that all sales performers today live and die by the strength of their team’s use of customer relationship management (CRM) tools. It’s still the best way to boost turnover, to drive profits and improve sales performance. But only if you use it thoroughly.
As with all data, your CRM can only help you if three important questions get asked on an ongoing basis:
- Is this good data?
- Is there enough data?
- Is it measuring something that’s meaningful and consistent with your business goals?
My good friend Tim Welch, Managing Director at Grand & Toy, has implemented within his organization an excellent method of ensuring that their CRM (in their case, Salesforce) remains a rock solid foundation for making good decisions that are resulting is record sales and profits.
Adoption rate is key
Tim ensures that all of his team inputs into their CRM how they spend their time with clients. This includes: who you are supposed to be calling, who you have called, who has the big deals that are closing this month, who is ready to buy, who needs follow up. He and his team recognize that data is reliable only if everyone contributes measuring the same things working within the same length of time.
Turn what’s personal into insight
Use CRMs selfishly. “I always make it personal for the sales reps,” Tim explains. He adds that by using it to keep track of what you are supposed to be doing, you create two benefits. Not only does it keep managers and staff well informed, it also gives the inside sales team important insight that fuels better decisions for the business overall.
With Tim’s team, the benefits of building reliable data through their CRM are gained slowly and steadily. “It doesn’t happen overnight,” he says. “Once they see the value of doing this, trust is established. This in turn gives them confidence when they meet with their sales managers, because they have already provided a clear picture of their performance.”
Stick with it
Boosting the CRM adoption rate within your team is only your first challenge. Ensuring that everyone sticks with it is just as hard and just as rewarding. As Tim points out, compliance is important in the short term, but over the longer term, people commit to their CRM because they trust it and have seen the value in applying the data that it generates.
Ultimately it’s a tool that helps make money for everyone but only if it’s used thoroughly by everyone at every stage.
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Make sure you check out Colleen's latest book, Nonstop Sales Boom for powerful strategies to drive consistent sales growth quarter after quarter, year after year.
Colleen Francis, Sales Expert, is Founder and President of Engage Selling Solutions (www.EngageSelling.com). Armed with skills developed from years of experience, Colleen helps clients realize immediate results, achieve lasting success and permanently raise their bottom line.
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