A recurring and ongoing discussion is sales revolves around the role of numbers in sales. You have the soft, relationship, Quality crown chanting their sacred mantra: “Sales Is Not Numbers Game!” “Quality over Quantity” or is it “Quality über alles”. So it came as some surprise when I was talking to a Ms. Not Numbers Game, and she started talking about the role and importance of metrics is sales success. OK, what are metrics? Further, she started talking about an HBR piece called “The Twelve Sales Metrics that Matter Most”.
Read the piece but the 12 boil down to:
1. Percent of Organization Achieving Quota
2. Quota Attainment Average
3. Average Annual Quota for Field Salesperson
4. Average Annual Quota for Inside Salesperson
5. Average Annual On Target Earnings
6. Average New Deal Size
7. Sales Cycle Length
8. Vertical Sales Adoption
9. SMB Specialization
10. Field Sales Revenue Trends
11. Inside Sales Roles
12. Sales Preparedness
Looks like most revolve around numbers.
The other thing that most of the above have in common are the fact that they are mid-cycle or lagging indicators. This does not make them inferior or useless, it is just that they are no things that will help change the outcome of the current cycle, if changes are not made they may not change the matric after the next sale.
I guess I struck a nerve when I said that I think the most important metric are those based on activity. Before I can explain, Ms. Not Numbers Game, came undone. “That’s just so old school, do a hundred calls, talk to 10, and get one sales, it doesn’t work like that today Tibor”. That wasn’t my point, but if you look at most of the metrics on the list above, ONE of the KEY elements to improving them, is changing both the quality and quantity of activity.
While I am not a fan of 100-10-1 number, I do believe that one should know the numbers it takes to get to quota (which BTW is a number). If you have $100,000 monthly quota, and the average deal is $25,000, you’re going to need 4 sales a month. Now you could put a plan into effect that will allow you to increase the average deal size to $30K – $35K, and that would involve a change in activity and execution. How many proposals will you need to present to get those 4 deals? How many prospects will have to go through the discovery process to generate sufficient proposals? How many prospect will you need to engage in order to have enough go through to discovery? How many people will you need to prospect in order to engage with enough? All these are leading indicators, all based on activities, all open to improved quality to positively change the quantity required.
From an organization perspective, the HBR list is fine, but from a front line perspective, the metrics that count are all activity related, as all activity is related to working with buyers. Without that none of the other dials will move much, but focus on activity related metrics, and you can move the dial to reduce quantity and improve quality.